1. Confusing markup with margin
Adding 20% to cost does not create a 20% margin. On €10,000 cost, a 20% markup yields a €12,000 price and 16.7% margin. Decide which percentage your business actually targets.
2. Underestimating labor hours
A small difference between planned and actual hours can eliminate profit on labor-intensive work. Build estimates from tasks and realistic productivity; compare actual hours with progress while the job is still underway.
3. Forgetting overhead
Rent, administration, insurance and nonbillable management time do not vanish when a project starts. An estimate that covers only materials and wages may show a profit while the business as a whole loses money.
4. Doing extra work without approval
Verbal requests can turn into unpaid labor and materials. Document scope changes, price them, and follow your contract approval process before treating additional work as billable revenue.
5. Ignoring equipment and travel
Vehicles, fuel, maintenance, transport, setup and downtime are real costs. If they are not included in the estimate or an hourly rate, they silently erode the result.
6. Looking only at invoices already paid
A project may appear profitable because supplier bills have not yet arrived. Track purchase commitments and forecast remaining work; compare the expected final cost with expected revenue.
7. Reviewing the numbers too late
A final profitability report explains what happened but cannot fix the finished job. Review budget, actual costs, changes and remaining work throughout delivery, then use the lessons to improve future quotes.
A better weekly habit
Spend 15 minutes updating labor, material commitments, approved variations and cost-to-complete. Focus on the largest variance and choose a concrete action. Consistency beats an elaborate spreadsheet that is rarely updated.
Examples are illustrative, exclude applicable taxes unless stated, and are provided for general educational purposes. Check local regulations and consult a qualified adviser for decisions specific to your business.