You know your turnover. Do you know which jobs made money?

Here is a pattern I see constantly. A business is busy, turnover is up, the owner is working every hour - and there is no more money in the bank at the end of the year than there was at the start.

Almost always, the cause is the same. They know what the business earned. They don’t know which jobs earned it.

Why quoting from experience stops working

When you started, you quoted from the gut and it was roughly right, because you were doing the work and you knew what it took. Then you took on staff, added machines, moved to bigger premises. The gut is now estimating a business it no longer does the work in.

Meanwhile overhead has grown quietly. Rent, insurance, software, the supervisor who doesn’t touch a machine, the compliance you didn’t need at half the size. That overhead has to be recovered somewhere, and if your quoting doesn’t recover it deliberately, it recovers it randomly.

What job costing actually involves

Not much that’s exotic. For each job you want materials at real cost including waste and offcuts, direct labour at the true employment cost rather than the hourly wage, machine time at a rate that reflects what the machine costs to own and run, and a considered share of overhead. Then compare that to what you charged.

What people find

Two things, usually. The first is that margin varies far more between jobs than anyone expected - not by a couple of points, but by twenty or thirty. The second is that the jobs the owner assumed were the good ones frequently aren’t. Long-running repeat work with a comfortable customer is often the thinnest, because the price was set years ago and quietly eroded by cost increases nobody re-passed on.

What changes

You stop competing for work that loses money. That sounds obvious, and it is the single most common thing a manufacturing business is doing without knowing it.

You also gain the ability to walk away with confidence, and to say to a customer: this is what this job costs me, here is what I need. That conversation is enormously easier when you have the numbers rather than a feeling.

None of this requires new software in most cases. It requires the costing to be set up properly once, and then used.