463: Roofers Who Don’t Know Their Numbers Won’t Survive This Market

Prioritize accurate job costing: Operating on 'gut feel' or solely on revenue can mask unprofitability. Implement robust job costing to understand exactly where profits and losses occur on every project.

Calculate true labor burden: Beyond gross wages, account for all 'cloud of dust' costs associated with employees, including payroll taxes, workers' comp, health insurance, vehicle expenses, and non-billable time, to get a precise hourly labor cost.

Distinguish direct vs. indirect costs: Understand how reclassifying 'indirect direct' costs from overhead to job costs provides a more realistic gross profit per job, helping identify genuinely profitable work.

Conduct post-mortems consistently: Regularly compare estimated costs to actual expenditures (especially for labor and materials) to identify variances, adjust future bidding strategies, and improve operational efficiency.

Optimize labor utilization: Track billable hours versus total hours paid to understand employee utilization rates. Implement strategies to minimize non-productive time (e.g., material runs, downtime) to boost overall productivity and profitability.

Focus on profitable work: Use job costing data to identify which types of jobs and crews are most profitable. Prioritize or re-evaluate work that consistently underperforms to maximize return on effort and resources.

Utilize simple KPIs and reports: Avoid overwhelming reports. Focus on key performance indicators like labor utilization and revenue per employee to gain actionable insights quickly and manage the business effectively.