Starfish Coaching · Plumbing business owners
Plumbing business profit · service calls and installs · parts markup · callbacks
Plumbers are rarely short of work. What is hard to see is how much of each job is left once the van, the travel, the parts, the callbacks, the office and your own pay have been taken out. There is no honest single number for the average plumbing profit margin or the average profit per plumbing job, and this page explains why. It also shows a method for finding your own, with a calculator you can use right now.
Search for the average profit margin for a plumbing company and you will find confident-looking numbers with no way to tell whose books they came from. A figure like that is not worth putting on a page, because it would be borrowed from other businesses and applied to yours. A plumber who mostly does emergency call-outs, a plumber who mostly fits out new builds and a plumber who runs six vans do not share one margin, and a national average hides every one of those differences.
What is useful is the method. Once you know how a plumbing job turns into profit, you can work out your own number, for each kind of work, and see which part of it needs attention.
Six things decide how much of a plumbing invoice you keep. Most owners know the first two and underestimate the rest.
A service call is short, urgent and comes with a lot of driving. An install is longer, planned and quoted in advance. They differ in how much of the day is travel, how much the customer will pay for speed, and how much can go wrong after you leave. Pooling them into one margin hides which one is paying for the other, so work them out separately.
The van, fuel, insurance, tools, tracking and the stock carried on it are paid whether or not the van moves. Add up the yearly cost and divide it across the jobs it did. That share belongs in every job's cost, and it is the first thing missing from a price built on hourly labour alone.
The technician is paid from the moment they start driving. If you bill two hours on site but pay three, one hour of wage has no revenue against it. Price the call-out, or price the job so it carries the travel.
Markup is a percentage of cost and margin is a percentage of price, and they are never the same number. Parts bought for $90 and sold for $150 carry a 66.7% markup and a 40% margin. Quote a 40% markup and you keep 28.6%. The overhead and profit page shows the full table.
A return visit to put right something you already billed for earns nothing, uses a technician's time and a van, and delays a paying job. Count how many you do in a year and cost each one.
If you are on the tools and no wage for you is booked as a job cost, every job looks richer than it is. Give yourself a fair wage for the hours you work on site. What is left after that, and after overhead, is the profit of the business, which is a different thing from your pay.
These numbers are invented to show the arithmetic. They are not an industry figure, a benchmark or a target. Your costs and prices will be different, which is the whole point of working it out yourself.
| One service call, step by step | Amount |
|---|---|
| Labour billed: 2 hours at $120 | $240 |
| Parts sold (cost $90) | $150 |
| Job total | $390 |
| Technician paid 3 hours at $45 (2 on site, 1 travelling) | $135 |
| Parts at cost | $90 |
| Share of the van | $25 |
| Direct cost | $250 |
| Gross profit: $140, or 35.9% of $390 | $140 |
| Share of callbacks (one job in ten, about $100 each) | $10 |
| After callbacks: $130, or 33.3% | $130 |
| Share of overhead (office, insurance, software, owner's pay) | $85 |
| Left over: $45, or 11.5% of $390 | $45 |
The same job can be made to look very different. Leave the technician's wage out because the owner did the work, and the direct cost drops to $115 and the job looks like a 70.5% gross margin. It is not. Mark up the $90 of parts by 40% instead of 66.7% and the parts earn $36 and not $60. And if three hours were paid but only two billed, the third hour was a gift. Each of these is small, and they all point the same way.
That is also why the average profit per plumbing job is a poor number to chase. Here the job leaves $45. A bathroom install would leave a very different amount, for different reasons. Work each type out on its own.
This is the same calculator as on the overhead and profit page. Replace the starting figures, which are only placeholders, with last year's revenue, direct job costs and overhead. Put your own wage in overhead if it is not already in your direct costs.
Where the money actually goes
Nothing is sent anywhere. The arithmetic runs in your browser.
Markup is calculated on your cost. Margin is calculated on your price. They are never the same number, and the gap gets wider the higher you go.
| If you mark up | Your margin is | You keep on $100k |
|---|
To keep 25% you have to mark up 33.3%, not 25%.
| Sell more at today's margin. Extra revenue needed | n/a |
| Or hold revenue and lift net margin to | n/a |
| Or cut overhead by | n/a |
Three doors into the same room. The third is usually the fastest, and it is the one owners look at last.
Service calls, installs, maintenance contracts, new builds. Whatever your business really does.
Labour at what you pay (include your own hours at a fair wage), parts at cost, the van, travel time and the callbacks.
The office, insurance, software, admin pay and your own pay. A simple split is by revenue.
That is the net margin of that type of work. Divide what is left by the number of jobs and you have your own profit per job.
Not with a national average. If a type of work keeps far less than another, that is where to look first.
There is no single honest figure, and any page that gives you one is guessing. A service call, a water heater swap and a bathroom install carry completely different costs, travel and risk, so an average across all of them describes none of them. As a simple illustration, 200 service calls that each keep $45 and 10 installs that each keep $900 add up to $18,000 over 210 jobs, which averages about $86 a job. That number is true of neither kind of work.
To find your own, add up the profit you kept on one type of job over a year, after direct costs, callbacks, overhead and a fair wage for yourself, and divide by the number of those jobs. Do it for each type of work separately. The overhead and profit calculator does the whole-business version.
It depends on the kind of plumbing you do, how much of it is service work and how much is installs, whether you do the work yourself or run a crew, and what your region costs to operate in. A borrowed national average hides all of that, so this page does not quote one. The more useful test is your own net margin, worked out honestly with your pay included, tracked over time and set against the margin you decided you need.
It can be, and many are, but the work being busy and the business being profitable are different things. A plumber with a full diary can still keep very little if the van, the travel time, the callbacks and the owner's unpaid hours are not in the price. The way to answer it for your own business is to put your revenue, direct job costs and overhead side by side, which is what the calculator on this page does.
Markup is a percentage of what the part cost you. Margin is a percentage of what you charged. A part that costs you $90 and sells for $150 carries a 66.7% markup, but only a 40% margin. If you want to keep 40% of the parts price, you need to mark up 66.7%. A 40% markup on the same $90 part sells it at $126, and you keep 28.6%.
Yes. If you do the work and no wage for you is booked anywhere, the job looks far more profitable than it is. In the example on this page, leaving the plumber's wage out lifts a 35.9% gross margin to 70.5%. That is not profit. It is your pay, counted as if the business had earned it.
A callback is a second visit that you cannot bill. It costs the technician's time, the travel and the van, and it also pushes out a paid job. Spread across all your jobs, even an occasional return visit takes a real bite out of margin. Count them: how many return visits did you make last year, and what did each cost?
Either can work, as long as the price covers the whole cost of the job, including travel, the van, callbacks, overhead and your own pay, plus the profit you want to keep. The method on this page is the same for both: work the job back from cost to price, then check what was actually kept after the year.
No. The arithmetic is the same anywhere, and Eric works with design and construction business owners wherever they are. The coaching for plumbers page explains how.
If the numbers surprise you, talk it through with Eric. The consultation is free and the arithmetic is the same for plumbers anywhere.
Eric Lee · Starfish Coaching · 1937 Triumph St, Vancouver BC V5L 1K6
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