. Work out your actual hourly rate per person per hour. To do this look at your total turnover for the week and divide that by total number of hours man worked in the week. This will tell an important story.

Now compar

After owning a service business for 22 years and teaching business owners to massively increase profit margins for the last 8 years, you could say I've learnt a few things very few people know, especially in a service business.

Let's look at the facts.

To increase profit margin (not turnover or sales) there are really only 4 main areas you can.

1. First of all are you measuring how many hours you are billing customers for, compared to how many hours worked? I've found dozens of businesses who don't invoice more than 80% of the work performed for customers, in other words their profit will be down 20% of what it should be.

You can find this out simply by measuring how many man hours all your team work in a week then see where each persons time was spend, on what job, with what customers. Then see if all were invoiced for all of the time spent with them.

2. Work out your actual hourly rate per person per hour. To do this look at your total turnover for the week and divide that by total number of hours man worked in the week. This will tell an important story.

Now compar

ss.

Let's look at the facts.

To increase profit margin (not turnover or sales) there are really only 4 main areas you can.

1. First of all are you measuring how many hours you are billing customers for, compared to how many hours worked? I've found dozens of businesses who don't invoice more than 80% of the work performed for customers, in other words their profit will be down 20% of what it should be.

You can find this out simply by measuring how many man hours all your team work in a week then see where each persons time was spend, on what job, with what customers. Then see if all were invoiced for all of the time spent with them.

2. Work out your actual hourly rate per person per hour. To do this look at your total turnover for the week and divide that by total number of hours man worked in the week. This will tell an important story.

Now compar

pared to how many hours worked? I've found dozens of businesses who don't invoice more than 80% of the work performed for customers, in other words their profit will be down 20% of what it should be.

You can find this out simply by measuring how many man hours all your team work in a week then see where each persons time was spend, on what job, with what customers. Then see if all were invoiced for all of the time spent with them.

2. Work out your actual hourly rate per person per hour. To do this look at your total turnover for the week and divide that by total number of hours man worked in the week. This will tell an important story.

Now compar

out simply by measuring how many man hours all your team work in a week then see where each persons time was spend, on what job, with what customers. Then see if all were invoiced for all of the time spent with them.

2. Work out your actual hourly rate per person per hour. To do this look at your total turnover for the week and divide that by total number of hours man worked in the week. This will tell an important story.

Now compar

. Work out your actual hourly rate per person per hour. To do this look at your total turnover for the week and divide that by total number of hours man worked in the week. This will tell an important story.

Now compare the hourly rate with what your pay in wages per hour. Include taxes, superannuation and workers compensation insurance. Typically a rule of sum is that wages amounts to 28%-35% of the turnover of most businesses, so that means you hourly rate per person (from the turnover divided by total hours worked) needs to roughly 3 times more than the average paid to your employees.

In other words, if you make $60 per person per hour over the whole week in turnover, your wages should be less than $20 per hour paid, or preferably $17 per hour.

When you have measured the total turnover in a week and hourly rate earned per person for the week, start to look at where the profit really comes from by breaking this into different services offered and what turnover and hourly rate you make in each of those areas.

This is how to find hidden profit in a service business faster than an