If a project costs $85,000 and you add a 20% markup, the selling price becomes $102,000. Many business owners assume they’ve achieved a 20% margin. It’s one of the most common pricing misunderstandings we see. In reality, the margin is only 16.7%. To achieve a true 20% margin, you need a 25% markup. At first glance, the difference seems minor. But applied across dozens of projects or an entire year of trading, the impact can be significant. Small pricing assumptions can quietly reduce profitability, leaving businesses working harder for lower returns. Understanding the difference between markup and margin is critical information that helps business owners make informed pricing decisions and protect profitability. When it comes to pricing, we know that precision matters. #BusinessAdvisory #PricingStrategy #Profitability #Margins #BusinessGrowth #FinancialPerformance #Andersen #KnowYourNumbers

Most small and mid-size businesses in the mechanical and trades services world have a general sense of how the numbers look. Revenue is up or down from last year. Certain costs feel high. Margins on some work are better than others. The owner has a feel for it. A feel is not a budget. And a feel is not a P&L framework. A real budget is a documented annual plan - revenue projections by service line, expense forecasts by category, department or cost center breakdowns, and a P&L structure that allows leadership to measure actual performance against plan throughout the year. It is the difference between reacting to financial reality and managing it. For small businesses in the trades, the absence of a formal budget creates a specific set of problems. It makes it difficult to identify where costs are running ahead of plan before they become a crisis. It makes it nearly impossible to evaluate whether a particular service line, location, or market is actually profitable. And it makes strategic decisions - whether to hire, invest in equipment, expand to a new market - much harder to make with confidence. A budget does not need to be complicated to be effective. It needs to be built, maintained, and reviewed. Dark Horse Works builds custom budget frameworks and works alongside ownership to develop the annual operating budget - and reviews P&L performance to help identify the gaps. Does your business have a real budget in place for this year and after? Reach out and let's talk about what that could look like. https://vist.ly/5cc8i #DarkHorseWorks #SmallBusinessConsulting #MechanicalServices #TradesIndustry #FieldServiceBusiness #OperationsConsulting #BudgetPlanning #PAndL #SmallBusinessFinance #BusinessOperations #TradesBusiness #FinancialPlanning #OperationsManagement

The best estimators don't rely on memory. They rely on systems. A proven estimating process that's adapted to each workshop's requirements while maintaining the same standard of quality on every estimate. Because one missed operation won't change your business. But miss that same operation on hundreds of estimates...That's where profitability disappears. The most profitable estimates aren't the result of luck or experience alone. They're the result of a consistent process that's followed every time. The best estimating systems don't make one great estimate, they make every estimate complete, accurate and profitable. #SmashRepair #WorkshopManagement #EstimateSolutions #VehicleEstimating #CollisionRepair

Three things I check on a P&L before I look at revenue. Margin quality first. Revenue can grow while margin quietly erodes through scope creep and unbudgeted variations, and by the time it appears in the annual number the causes are six months old. Second, cost structure: what is genuinely fixed, what is variable, and what we have assumed will stay stable that probably will not. Third, the subcontractor framework. Price, quality, and service pull against each other, and the tendering structure you build decides which one wins by default. Get that right and cost efficiency follows without anyone needing to chase it. Revenue is the headline. These three decide whether the headline means anything at all. #PandL #CommercialLeadership #BusinessGrowth #Contracting #FinancialGovernance

More work doesn't fix the bottleneck when the bottleneck is you. The best operating system for a contracting business isn't a brand name, it's a weekly rhythm your whole team can run without routing every decision through the owner. That's what scale actually looks like. https://lnkd.in/ePAEuc_G

Being good on site does not automatically make quoting, variations, follow-up, scheduling, cash flow, or client communication easy. That is not a personal failing. The trade is one thing. Running the business is another. More about Ground Floor: https://lnkd.in/eqvxQSGU #BuilderBusiness #ConstructionSystems #ResidentialBuilders #BusinessCoaching

Every property management owner needs to know this one number: what percentage of your revenue comes from your largest owner? If a single owner accounts for 20% to 40% of your revenue, potential buyers see a major “concentration risk.” Diversification is essential to protecting your enterprise value. If you plan on selling someday, start reducing that risk now. #propertymanagement #revenue #reducerisk #business

Your pursuit spend is hemorrhaging money. Not because your team isn't skilled. Because your RFP process was never designed for how you actually work. Most agencies discover this too late—after they've already lost weeks to blank pages and low-quality bids that should have been rejected on day one. The cost of that discovery? Hundreds of thousands in wasted labor. But what if the architecture of your RFP engine was the actual problem all along? And what if fixing it changes not just your win rate, but your entire economics? Read more: https://lnkd.in/gm6bwXTH

Spend approval needs context, not only an amount. The business reason, timing risk, budget owner, and expected result should travel with every request.

In today's newsletter, we talk about one of the most important metrics in your business: DLER, or Direct Labor Efficiency Ratio. No other metric is more predictive of financial success in a PM company.