Busy but Broke? These 4 Numbers Explain Why

Let me guess...

You’re flat-out. Vans are on the move, sites are busy, the phone doesn’t stop ringing.

But somehow - at the end of the month - there’s not much left to show for it.

You’re thinking: “We’re working flat-out. So why does it still feel tight?”

Here’s why: you’re running on gut feel, not real numbers or data.

And that’s the difference between a business that’s in control - and one that’s always firefighting.

If your answer to “How’s business?” is something like:

“Busy - just waiting for a few payments to come in…”

That’s not a plan. That’s a warning sign.

The truth is this: if you don’t know four key numbers, you’re guessing your way through business. And guessing doesn’t pay the bills.

Here are the four numbers I recommend you track every month.

1. Gross Margin - The truth about your jobs

Gross margin is the profit left after invoicing for your jobs and paying for materials and labour. It’s the money your jobs actually produce before vans, insurance, office, or tax get paid.

Say you bill £10,000 on a job.

• Materials: £3,000
• Labour: £4,000
• Leftover: £3,000

That’s a 30% gross margin.

Sounds fine - until you run over by a day, pick up an extra supply run, or waste a few materials. Suddenly, you’re at 22%. Do that five or six times and your margin vanishes.

Most business owners price based on “what the market charges” - not what it actually costs.

That’s why you’re flat-out on site but still struggling to see profit.

Margins don’t disappear overnight. They slip through the cracks - wasted hours, remedial work, variations you never bill.

Check your gross margin on every job. It’s the clearest sign of whether your pricing and delivery actually work.

But even if your job margins look healthy, the real test is what’s left once everything else is paid…

2. Net Margin - What the business really earns

This is the percentage of profit you actually keep after all costs: labour, materials, admin, vans, insurance, your own wage, tax.

Here’s how it plays out in real life. Say your business turns over £1 million in a year. At a 30% gross margin, that leaves £300,000 after materials and labour.

Sounds decent, right?

But once overheads - vans, staff, rent, insurance – costing  £240,000 are accounted for, you’re left with just £60,000. That’s a 6% net margin."

For all the stress, risk, and hours - that’s about £1,150 a week before tax. However, one dispute, one late payment, or one bad job can wipe it out.

Most business owners don’t know their net margin until their accountant tells them - months too late.

You should know it monthly. Aim for 10% or more. Anything less, and the risk starts outweighing the reward.

3. WIP - The cashflow trap

Work in Progress (WIP) is the value of jobs you’ve done but haven’t billed or been paid for yet.

You’ve paid wages. You’ve paid suppliers. But the money’s stuck on site.

That’s why your bank balance looks empty even though the P&L says you’re profitable.

It hits hardest as jobs get bigger. The more sites you’ve got open, the more cash is tied up in work you’ve already delivered but haven’t billed. On paper, you look profitable. In the bank, you’re gasping for air.

That’s why WIP is such a common cashflow killer. The work’s been done, the costs are paid, but the money’s still sitting on site instead of in your account.

Here’s how to stop it choking your cashflow:

• Break jobs into stages and invoice as you go, not just at the end.
• Get your applications or valuations in on time - every delay costs you.
• Track what’s been delivered, what’s been billed, and what’s actually been paid every single month.

Control WIP, and you’ll finally see your profit in the bank, not stuck on site.

4. Overhead Percentage - What it costs just to stay open

Overheads are your running costs: vans, admin wages, rent, software, accountancy, your own salary. They’re the price of keeping the doors open before you even step on site.

Overhead % = Overheads ÷ Turnover × 100

If overheads are £240,000 and turnover is £1.2m, that’s 20%. In plain English, it means every single job you take on needs to carry 20% margin just to break even on running costs.

So if your average gross margin is 25%, you’re only left with 5% net. That’s one pricing mistake, one slow month, or one bad debt away from wiping out your profit completely.

And here’s the real trap: overheads rarely hit you in one big jump. They creep.

• One more van on finance.
• A new bit of software.
• Admin hours creeping up.
• Rent that never goes down.

Individually, none of it feels huge. Together, it quietly eats your margin until you’re wondering why you’re flat-out but still strapped for cash.

Here’s how to keep overheads under control:

• Question every new cost before you commit - will it really earn its keep?
• Tie vans, software, and staff hours directly to productivity, not “nice to haves.”
• Check your overhead % every month, not just once a year with the accountant.

Stay on top of overheads, and you’ll protect your profit when turnover dips or jobs don’t go to plan.

The chain that makes or breaks your business

These numbers work like links in a chain:

• Gross margin shows if your jobs are priced and delivered right.
• Net margin shows if the whole business is working.
• WIP shows if your cashflow is healthy.
• Overhead % shows how lean your business really is.

Miss one, and the whole thing buckles.

Think you’ve got a pricing issue? Might be WIP killing your cash.

Chasing more jobs? Might just be overheads too high.

Pushing for turnover? Protecting margin could make you more.

Get these four right, and you take control.

Quick Tip: One-page monthly scorecard

Here is a quick tip for you this week.

At the start of each month, write down:

• Gross margin for last month
• Net margin
• WIP exposure
• Overhead %

Stick it on the office wall. Spend 10 minutes looking at it. Make decisions from it - not your gut.

If you can’t get these numbers in under 5 minutes, that’s the red flag. You’re reacting, not leading.

Remember, you’re not building a business just to be flat-out and broke. You’re building it to give you freedom. Get these four numbers right, and you’ll finally feel in control.