Pull the numbers off the closed job file, not from memory. If a cost would have happened whether or not you took this job, it belongs in overhead, not in the direct lines.
Net profit
-
after overhead
Net margin
-
of job revenue
Break-even overhead rate: -
This job covers overhead up to that share of revenue. Above it the job loses money. This number needs no threshold and no benchmark. It is fully determined by the job's own figures, and it is the most honest read on this page.
| If your overhead rate is | Net margin |
|---|
Your rate is an accounting policy, not a fact about the job. Move it ten points and the band moves. That is why the same job can read healthy in one shop and thin in another.
The 10% and 5% lines are this calculator's working thresholds, not industry standards. The 10% line proxies for enough cushion that one job going wrong does not erase the profit on the jobs around it. The 5% line marks the point where ordinary job-to-job variation is big enough to swallow the whole margin. We looked for a published job-level net margin benchmark for commercial restoration and there is not one. The figures that get quoted, from the RIA Cost of Doing Business Report and from CFMA, are company-level annual net income, not one job after allocated overhead. If your business targets a different net margin, change it, and apply the same number to every job so the comparison holds.
Keep the result with the job file. Record the job name, the net margin, the band, and the one cost line that moved it most. A single job's margin is an anecdote. Twenty of them sorted by band is the list of work you should be pricing differently or turning down.
Estimates only, not accounting or tax advice. Overhead and cost categories vary by company; confirm your real numbers with your bookkeeper or CPA.