Simple Job Costing for Solo Contractors: Find Out Which Jobs Actually Made Money

Most one-person shops know whether the bank account went up this month. Far fewer know which jobs paid for that and which ones quietly lost money. A busy month can still be a bad month if half the work was underpriced.

Job costing sounds like something for companies with an office manager. For a solo shop it's just one habit: write down what you thought a job would cost, then write down what it actually cost, and look at the gap.

What job costing means for a one-person shop

For every job, you track two columns:

• Estimated: the hours, materials, and other costs you priced into the quote
• Actual: what you really spent once the job was done

The difference between them is called the variance. If the actuals keep coming in higher than the estimates in the same spot, that's where your pricing is off.

The five numbers to track on every job

1. Labor hours. All of them, including the supply run, the return trip, and the half hour you spent hunting for a stud. Not just the hours with a tool in your hand.
2. Materials. Keep the receipts together by job. A photo in a folder named after the customer works fine.
3. Other job costs. Rentals, disposal, parking, a helper for a day, permit fees if you paid them.
4. What you billed. The original quote plus any change orders.
5. What you've been paid so far. So you can see money still owed at a glance.

That's enough. You don't need software or a bookkeeping degree to get value out of this.

A worked example (example numbers only)

Say you quoted a small basement job like this, using a $95/hour labor rate:

• Labor: 10 hours estimated, $950
• Materials: $400 estimated, billed at $480 with markup
• Quote total: $1,430

When it was done, the actuals looked like this:

• Labor: 14 hours (two extra supply runs and an unplanned return visit)
• Materials: $455 (prices went up since you priced it)

You still billed $1,430. At your $95 rate, those 14 hours were worth $1,330, so after $455 in materials the job should have brought in $1,785. You were paid $1,430. The four extra hours and the material price change cost you about $355, roughly a quarter of the job.

One job like that is a shrug. The same pattern on every job is the reason some contractors stay busy and broke.

These numbers are made up to show the math. Your rate should come from your own costs, which is what the true hourly rate guide walks through.

Where the money usually leaks

When you compare a few weeks of jobs side by side, the gaps tend to show up in the same places:

• Drive and supply time. It happens on almost every job and almost nobody quotes it.
• Material prices you priced from memory. A quote built on last year's prices loses money before you start.
• Extras that never got a change order. The "while you're here" work. See how to use change orders so extras don't become free work.
• Return trips. Wrong part, customer not home, one more fixture to hang. Each one costs drive time and an hour you can't sell to someone else.
• Slow payment. A job isn't profitable until it's paid. If you're chasing balances, asking for a deposit up front helps.

Make it a five-minute habit

Job costing only works if you actually do it, so keep it small:

1. Before the job starts, copy the quote numbers into the "estimated" column.
2. Each day on the job, jot your hours in a notes app or on the back of the work order. Round to the quarter hour.
3. Drop every receipt photo into that job's folder the same day.
4. When the job's done, spend five minutes filling in the "actual" column.
5. Once a month, look at all your jobs together and ask one question: where did I keep going over?

Then change one thing in your next quote. Add a supply-run line. Bump your materials buffer. Set a minimum for small jobs. Small adjustments add up quickly when you apply them to every job.

What to do with what you find

• If labor keeps running over on a certain type of job, quote more hours for that type of job, not just a higher rate across the board.
• If materials keep running over, re-price your common items every few months or quote materials separately.
• If a type of job loses money every time, raise the price or politely stop taking it.
• If certain customers always lead to extras, set the change-order expectation at the start of the job.

Tools that make this easier

A notebook and a calculator will do the job. If you'd rather not build the spreadsheet yourself, the Solo Contractor Back-Office Bundle ($49) includes a job cost tracker that shows estimated vs. actual, margin, and money still owed for each job. It also includes the pricing kit, so your estimates and your actuals use the same numbers. If pricing is the bigger problem, start with the Know Your Number Pricing & Estimate Kit ($29).

Want something free first? The Before You Pick Up the Tools checklist is a one-page list to run through before every job, so fewer surprises end up in your actuals.