BETTERLANE FIELD NOTES · PROJECT PROFITABILITY
A good-looking quote can still hide a weak margin.
Review the definition, the final scope, and the actual costs before deciding whether pricing or delivery needs to change.
Published October 8, 2026 · BetterLane · Examples below are illustrative.
01 · USE THE RIGHT DENOMINATOR
Markup and margin are different.
If a job is priced at $10,000 and its included direct costs are $7,500, its job contribution is $2,500. The markup on those costs is 33.3% ($2,500 ÷ $7,500). The contribution margin on revenue is 25% ($2,500 ÷ $10,000).
A 25% markup on $7,500 produces a $9,375 price and a 20% margin. If the target margin is 25%, the price calculation is $7,500 ÷ (1 − 0.25) = $10,000. These examples assume the same cost basis and exclude any overhead, tax, or other costs not included in that basis.
Write the definition beside the number
Revenue less included direct job costs is a contribution calculation. It should not be presented as net profit. Agree on which labor, installation, freight, subcontractor, and other costs belong in the review.
02 · COMPARE LIKE WITH LIKE
Keep scope changes visible.
Use the original quote as the baseline, then list approved additions, credits, and substitutions. Compare the final revenue and the costs needed to deliver that final scope. Mixing original-scope costs with revised revenue can hide why the result changed.
For each meaningful variance, ask whether it came from pricing, purchased cost, labor time, an unpriced change, or incomplete records. One total does not tell you which decision to change next.
03 · DON’T FILL GAPS WITH ZERO
Missing costs make the conclusion provisional.
Suppose the $10,000 job above initially shows $7,500 of costs. An additional $800 of recorded installation labor changes the contribution from $2,500 to $1,700 and the margin from 25% to 17%. That is an eight-percentage-point change.
If the installation time has never been recorded, the final margin is unknown. Label an estimate as an estimate and keep the unanswered cost question visible. Better records may be the most useful first improvement.
04 · START WITH TWO FINISHED JOBS
Turn the review into a decision.
- Select one normal job and one difficult job. Use completed work with records you can access.
- Collect the quote, changes, invoices, and cost records. Use the same categories on both jobs.
- Reconcile the evidence. Separate recorded amounts, estimates, and missing information.
- Choose one change. For example, a price rule, an approval step for extra work, or recording installation time.
- Review the next comparable jobs. Check the same measure and note other changes that might explain the result.
Two jobs can reveal a useful question. They do not establish your company-wide margin or prove that a proposed fix will work on every job.
See the Project Profit Review and its deliverables