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You're Making Good Money — So Why Is There No Profit Left?

By Luke Tadich · The Tradie Owner

You did $1.8 million last year. The ute's new, the crew's five deep, the phone doesn't stop. And then BAS time rolls around, your accountant sends the numbers through, and there's about $40,000 left after tax and super — for a year of fourteen-hour days and every weekend on the phone. Something doesn't add up, and you start wondering if the business is actually working or if you're just running faster on the same treadmill.

Here's the answer up front: nothing weird is happening. There's no mystery expense, no one skimming the till. Profit leaks out of trade businesses in three very ordinary places, and all three get worse — not better — as you grow, because growth hides them under more revenue. Find the three leaks and the turnover finally starts turning into money in your account.

Leak one: you're still quoting like it's five years ago

Most tradies who started as the tools guy learned to price by feel. You look at a job, you reckon it'll take three days and $2,000 in materials, you add a bit for luck, and you quote it. That works fine when you're the one swinging the hammer and every hour of "slack" in the quote is a bonus for you.

It stops working the second you've got a crew. Now those three days might take four because your apprentice is still learning, there's a wasted trip to the supplier because nobody checked stock, and the "bit for luck" you built in five years ago never got adjusted for today's material prices or today's wages. You're quoting a business that no longer exists.

The fix isn't complicated, it's just uncomfortable the first time you do it: pull your last ten completed jobs and compare what you quoted against what they actually cost — real hours, real materials, real call-backs. Most owners find at least two or three jobs that were quoted at a loss or near enough to it, and they usually didn't know until they looked.

Leak two: you're paying for hours you're not charging out

This is the one that hides best, because it looks like a wages problem when it's actually a pricing and scheduling problem. Say Dave's on $38 an hour plus super, workcover and leave loading — call it $52 an hour landed cost. If Dave's only billable on jobs for six hours of an eight-hour day, and your quotes assume eight billable hours, you're eating that gap every single day he's on the payroll.

• Travel time between jobs that never gets built into the quote.
• Pickup runs to the supplier because materials weren't organised the day before.
• Standing around waiting on another trade, a delivery, or an answer from you.
• Rework on a job that was rushed or briefed badly the first time.

None of that is Dave's fault. It's a scheduling and systems gap, and it's invisible until you actually track billable versus paid hours for a fortnight. Do that once and you'll know your real labour recovery rate — and most owners are shocked at how far it sits below 100%.

Leak three: overheads that grew while nobody was watching the dial

This one creeps up because it happens in small, sensible-looking decisions. You hired an office admin because you were drowning in paperwork — good call. You upgraded software because the old spreadsheet was a mess — good call. You added a second ute, a bigger shed, better insurance because the business is bigger now — all good calls, each one on its own.

The problem is nobody ever went back and asked whether your prices moved to cover any of it. Revenue went up, so it felt like there was room. But overheads as a percentage of revenue is the number that actually matters, and for a lot of trade businesses that number climbs steadily for years without anyone noticing, because every individual decision looked fine in isolation.

Where to look first, this week

You don't need a full financial overhaul to start plugging this. Three things, in order:

1. Work out your true cost per hour for every person on the tools, including super, workcover, leave loading and a realistic non-billable percentage — not the wage on their payslip.
2. Re-quote three recent jobs using that real cost per hour and compare it to what you actually charged. That gap is your leak, in dollars, on real jobs.
3. Pull last year's overheads as a percentage of revenue and compare it to two years ago. If the percentage crept up, your pricing hasn't kept pace with the business you're actually running.

I built and scaled a trade business myself, off the tools, and I found all three of these leaks in my own numbers before I fixed them — nobody sets out to underquote or overstaff, it just happens quietly while you're flat out delivering. The businesses that fix it don't do it by working harder or chasing more revenue. They do it by finally pricing and running the business they actually have, not the one they started with.

If you want a second set of eyes on where yours are, book a free strategy session. Thirty minutes, and you leave with the blueprint whether or not we work together. Come on as a client and your first paid session is guaranteed to uncover at least $100,000 of opportunity in your business, or you get your money back.