Plain-English definitions of the numbers and terms that decide whether your business makes money.
Your monthly business overhead divided by the number of billable hours you actually work — the dollar amount every billable hour must cover before you make any profit.
The percentage of revenue you keep after subtracting labor, materials, overhead, and other business costs — before personal taxes.
The percentage you add on top of your cost to set your selling price — different from margin.
Revenue minus the direct cost of doing the job (labor + materials), expressed as a percentage. Does NOT subtract overhead.
What actually lands in your personal bank account after business expenses, overhead, and self-employment taxes.
A signed addendum to an active job that adds work, removes work, or adjusts pricing — created mid-project when scope changes.
An upfront payment a customer makes when accepting a quote, securing the job and covering initial materials.
A digital signature on a quote, contract, or change order — legally binding in the US (ESIGN Act) and most countries.
Software that helps contractors quote, schedule, invoice, and get paid — the digital replacement for a notebook, a spreadsheet, and four separate apps.
Automatic monthly or weekly charges to a customer saved card for ongoing service contracts (lawn care, pool service, gutter cleaning, etc.).