Profitability tool

Which lever earns the most, soonest?

There are only five levers on a trades P&L, and they are not equally worth pulling. You supply what you believe you can move; this prices each lever, ranks them by return on effort, and sequences the year. Price is almost always the biggest number and almost never the right place to start.

The gap

Annual revenue$Net margin today 9%Target net margin 18%

What you believe you can move in twelve months

These are your estimates, not ours. Be honest rather than optimistic — the ranking is only as good as the feasibility you put in.

Price 3 % price increaseRaise effective ticket — list price, diagnostic fees, or simply stopping the discounting that happens in the van.↳ Effort HardNeeds scripting, training and nerve. Slowest to take, largest downside if wrong.

Cost of delivery 2 pts of gross marginMaterial margin, callback and warranty rate, subcontractor spread, job-level labor efficiency.↳ Effort EasyMostly internal. No customer conversation required, and it banks inside a quarter.

Overhead 1.5 pts of revenueStructure, software, unused fleet, admin headcount, insurance and finance costs.↳ Effort EasyFast and controllable, but each point gets harder — and cutting too far breaks capacity.

Volume 8 % revenue growthMore jobs at today's margin — marketing, capacity, close rate, dispatch efficiency.↳ Effort HardCosts money up front and only adds profit at your CURRENT margin — which is the problem you are trying to fix.

Mix 5 pts of revenue shiftedShift revenue toward maintenance agreements and higher-margin work; away from the jobs you take because the phone rang.↳ Effort ModerateSlow to build, but it improves margin AND multiple at the same time — the only lever that does both.

The gap to close

Margin points needed9.0 pts

In dollars, annually$720,000

Your levers, ranked by return on effort

1Cost of delivery$160,0002 pts of gross margin · effort easy
2Overhead$120,0001.5 pts of revenue · effort easy
3Price$192,0003 % price increase · effort hard
4Mix$48,0005 pts of revenue shifted · effort moderate
5Volume$57,6008 % revenue growth · effort hard

Bars show dollars per unit of effort, not raw dollars. Price is almost always the biggest number and almost never the right place to start.

The twelve-month sequence

Q1Cost of delivery$160,000
Q2Overhead$280,000
Q3Price$472,000
Q4Mix$520,000
OngoingVolume$577,600

Does it close?

Not yet. Your estimates total $577,600 against a $720,000 gap — short by $142,400, landing near 16.2%. Either the target needs another year, or one of the levers you have marked conservative has more in it than you think. The usual answer is cost of delivery.

A planning model, not a forecast. Price assumes 80% of the increase survives volume loss; mix assumes shifted revenue earns 12 points more margin than the work it replaces; volume earns only at your current margin. Levers interact in reality — improving mix usually improves cost of delivery too — so totals are directional. Nothing you type here is sent to us, stored, or logged.

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