My plumbing business does $600k a year but I only take home $60k — where is the money going?

Owners in this position usually go hunting through overhead first because it is the part of the P&L they write cheques for. But overhead in a small plumbing company is mostly fixed and hard to cut without cutting capacity. Gross margin is where a few points hide on every single job.

Check three things on gross margin. Materials markup: parts passed through at cost plus a small handling fee rather than priced properly. Unbilled field time: callbacks, drive time on hourly jobs, and warranty returns that go on the timesheet but not the invoice. And job pricing: hourly or time-and-materials work that runs long, where the customer pays for the hours but not for the fact that the day could have held another job.

Then look at marketing cost per job. Lead-generation platforms and paid search can easily be the largest single overhead line after staff, and the cost per booked job is rarely calculated. A $42,000 marketing line that produces 300 jobs is $140 per job before a pipe is touched.

The illustrative split below is an assumption, not a benchmark. Put your own figures in each line; the point is to see which line is out of shape rather than to match a template.