A good business, measured.

Profit equals Revenue minus Cost.

Revenue (annual profit, counted at gross margin)

1. Win more customers. More of the right people find the business, ask for a price and say yes.
   • 1.1 Marketing, reviews and referrals. How customers find the business and why they pick it: advertising, online reviews and word-of-mouth referrals, and what each new lead costs. The number we score: Cost per qualified lead.
   • 1.2 Turning leads and quotes into sales. How many inquiries become quotes, how many quotes become paid work, and how fast the business responds along the way. The number we score: Lead-to-sale rate.
   • 1.3 New services, areas and customer types. Growth from offers the business did not sell before: added services, new ZIP codes, and new kinds of customer such as builders, property managers or commercial accounts. The number we score: Revenue share from new offers.
2. Earn more per sale. Each job, order or visit brings in more profit through better prices, fuller sales and a better mix of work.
   • 2.1 Pricing, estimating and discounts. Whether prices and estimates cover true cost and the target margin, how often prices are reviewed, and how much is given away in discounts. The number we score: Quoted margin vs target.
   • 2.2 Add-ons and upgrades. How often a sale includes more than the minimum: an upgrade, an accessory or a related service offered at the point of sale. The number we score: Share of sales with add-ons.
   • 2.3 Most profitable jobs, products and customers. Which jobs, products and customers earn the target margin and which do not, so the business can do more of the first and reprice, fix or drop the second. The number we score: Revenue share below target margin.
3. Keep customers buying. Existing customers buy again, stay longer and move onto plans or contracts.
   • 3.1 How often customers come back. How many times a year an existing customer buys, and whether the business reminds them when the next service or order is due. The number we score: Purchases per customer per year.
   • 3.2 Lost customers and win-back. How many customers stop buying each year, why they leave, and what the business does to win them back. The number we score: Annual customer retention rate.
   • 3.3 Service plans, memberships and contracts. How much revenue repeats under an agreement, such as a maintenance plan, a membership or a supply contract, and how well those agreements are priced, renewed and delivered. The number we score: Recurring revenue share.
4. Handle more business. The business takes on more work with the people, trucks and machines it already has.
   • 4.1 Bottlenecks and wait times. The step, person or machine that limits how much work gets done, and the sales lost while customers wait. The number we score: Work turned away or lost waiting.
   • 4.2 No-shows and empty slots. Capacity that was ready but went unused: missed appointments, late cancellations and open slots that nobody filled. The number we score: Share of bookable slots filled.
   • 4.3 Slow seasons and slow days. How far sales fall in the slowest months and days compared with the busiest, and what the business does to fill the quiet periods. The number we score: Slowest-month revenue versus busiest.

Cost (annual profit, counted in full)

5. Buy better. The business pays less for the materials, parts and subcontract work that go into each job.
   • 5.1 Supplier and subcontractor prices. What the business pays its main suppliers and subcontractors compared with the best price available for the same thing. The number we score: Price paid vs best quote.
   • 5.2 Specs, brands and substitutes. Whether the materials, brands and specifications in use are the lowest-cost choice that still meets the customer's standard. The number we score: Material cost per job vs target.
   • 5.3 Rush buys and invoice errors. Money lost in how buying is done: emergency purchases at retail prices, rush freight, and supplier invoices that do not match the agreed price or the quantity received. The number we score: Share of spend at agreed prices.
6. Get more from every hour. Paid hours turn into more finished, billable work.
   • 6.1 Time each job takes. How the hours a job takes compare with the hours it should take, and why some crews, shifts or job types run long. The number we score: Actual vs standard job hours.
   • 6.2 Overtime and staffing levels. Whether the number of people and the hours they are paid match the workload week by week, including how much is paid at overtime rates. The number we score: Overtime share of paid hours.
   • 6.3 Travel, setup and idle time. Paid hours that are not billable work: driving, loading, setting up, waiting and time between jobs. The number we score: Billable share of paid hours.
7. Waste less. Less material, labor and revenue is lost to scrap, rework and work that never gets billed.
   • 7.1 Material waste, spoilage and theft. Materials bought but never billed or built into finished work: scrap, over-ordering, damage, spoilage, loss and theft. The number we score: Materials used vs materials billed.
   • 7.2 Redos, return visits and warranty. The cost of work done twice: callbacks, return visits, rework, defects, warranty repairs and the goodwill credits that follow them. The number we score: Share of jobs redone.
   • 7.3 Unbilled work, refunds and bad debt. Work that was done but never fully paid for: extras not invoiced, change orders not signed, refunds, write-offs and invoices never collected. The number we score: Lost billings to revenue.
8. Trim overhead. The cost of running the business itself, apart from the jobs, comes down.
   • 8.1 Rent, utilities, vehicles and equipment. The cost of the buildings, yards, vehicles and equipment the business runs, compared with how much it uses them. The number we score: Facility and fleet cost to revenue.
   • 8.2 Office staff, software and subscriptions. What the business spends to run its office: office and management pay, software, subscriptions and outside services, compared with the work they do. The number we score: Admin cost to revenue.
   • 8.3 Insurance, card fees and interest. The financial costs of being in business: insurance premiums, card processing fees, bank fees and interest on debt. The number we score: Insurance, fees and interest to revenue.

Cash

One-time dollars, totaled separately from annual profit. Money tied up in unpaid invoices and stock, and the timing of supplier payments.

• K1 Deposits, invoicing and collections. How quickly finished work turns into money in the bank: deposits taken up front, how fast invoices go out and how firmly they are collected. The number we score: Days to get paid.
• K2 Inventory, parts and supplies. How much cash sits in stock, in the warehouse, on trucks and on the shop floor, compared with what the business needs to serve customers. The number we score: Days of inventory held.
• K3 Supplier payment terms and timing. When the business pays its suppliers compared with the terms it has or could negotiate, including early-payment discounts taken or missed. The number we score: Days to pay suppliers.

Enablers

What makes every lever easier to pull. Scored, not dollar-valued.

• E1 Software, automation and AI. Whether information flows from booking to payment without re-typing, and whether routine work is automated where it pays. The number we score: Booking-to-payment steps needing re-typing. Points to the dollars in: 1.2, 6.3, 7.3, 8.2 and K1.
• E2 Knowing your numbers. How quickly and reliably the owner sees profit by job, service line and month, and whether those numbers drive decisions. The number we score: Days to a job-level monthly profit report. Points to the dollars in: 2.1, 2.3, 6.1 and 7.1.
• E3 Hiring, training and written procedures. Whether the business can find, train and keep the people it needs, and whether the way work is done is written down instead of living in a few heads. The number we score: Annual staff turnover. Points to the dollars in: 4.1, 6.1 and 7.2.