Your job cost is higher than you think. Here's what's hiding in it.
Ask an owner what a job cost and you'll usually hear two things: materials and labor. Both are real. Neither is the whole number.
Job cost is everything it takes to do the work on one job. Get it wrong and your margin is wrong, your pricing is wrong, and you can grow yourself right into a cash crunch.
What owners count
- Materials
- Hourly wages for the crew
- Subcontractors
- Permits
Good start. Now here's what usually gets missed.
What's hiding in it
Labor costs more than the wage. Payroll taxes, workers comp and benefits ride on top of every hour your crew works. An hour isn't $28 if it really costs you a lot more than $28.
Equipment, rentals and dump fees. The dehumidifier, the excavator rental, the dumpster, the disposal fee. If they're on a job, they belong to that job.
Callbacks and warranty work. Every trip back to fix or finish something costs labor and fuel, and it belongs to the job it came from. Foundation, waterproofing and roofing work often carry long warranties, so log every claim against the original job.
Card and financing fees. When a customer pays by card or uses financing, a slice comes off the top. On a big ticket job that slice is real money.
Sales commissions. If someone gets paid for selling the job, that's part of what it cost to do it.
Why it matters
Price minus job cost is gross profit. Gross profit divided by price is your margin. If job cost is understated, gross profit is overstated, and every number built on it is wrong: your margin, your lifetime value and your return on every marketing channel.
That's how a busy season can still end with less money in the bank than you expected.
Job cost isn't overhead
One line to keep straight. Your office, trucks, insurance, software and your own salary aren't on any one job. That's overhead. Every job has to help pay for it, but it doesn't go into job cost.
Gross profit pays for overhead. What's left after that is real profit.
Start this month
Pick your last ten jobs. For each one, write the price and every cost above. Then work out the margin.
Most owners find a few jobs they thought were winners that barely broke even. Usually there's a pattern: one service, one crew or one kind of customer. Fix that, and you've found money without selling one more job.
Next, check markup against margin, because that's the other place profit disappears. Worksheet 2 in our free playbook tracks job costs by month.
Not sure where your business stands yet? Our free Growth Ladder assessment takes about four minutes.
- Run It Like They Would, The Next Right Move (2026)
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