What your hourly rate actually needs to be
Most people price off what the bloke down the road charges. Here is the arithmetic that tells you what you need, which is usually a different number.
Your busiest month was probably not your best
25 August 2026 · 6 min read · Gnarly by Nature Pty Ltd
Ask most people how the business is going and you get a revenue number. Ask which of their jobs makes the most money and you usually get a pause, then a guess, then a story about one good job three years ago.
That gap is where small trade businesses lose most of their money. Not to theft, not to bad debts, but to quietly repeating work that does not pay because it feels busy and busy feels like winning.
Why the busiest month lies
A month with $80,000 in and 40 per cent margin makes less than a month with $60,000 in and 65 per cent margin. Everybody knows this. Almost nobody can tell you which of their months was which, because the only number that gets looked at is the one at the top.
The busy months are often the worse ones, for reasons that make sense once you see them: you take work you would normally turn down, you pay overtime, you buy materials at retail because there is no time to plan, you make mistakes because you are rushing, and you stop quoting carefully because there is no time.
The three cuts worth making
You do not need accounting software to do this. You need every invoice tagged with what it cost you.
By job type
Group your jobs into the five or six kinds of work you actually do. For a plumber that might be hot water changeovers, blocked drains, bathroom rough ins, maintenance contracts and new build. Total the invoices and the costs in each.
Nearly everybody finds one category they have been doing for years out of habit that is barely above water, and one they have been treating as a sideline that is the best thing they do.
By customer
Same exercise, by who paid. This one is uncomfortable, because there is usually a big customer everybody is proud of who is, on the numbers, mediocre. Big customers negotiate. They also pay slowly, which costs you money that never appears as a cost.
By who did the work
Not to rank people. To find where the training is needed and where the quoting is wrong. If the same person's jobs consistently run over, that is either an estimating problem on your side or a capability gap on theirs, and they need opposite responses.
The thing that makes it impossible
All of this depends on costs being attached to jobs, and in most small trade businesses they are not. Materials get bought on the way to site, the receipt lives in the ute, and by the time the invoice is written nobody remembers what went where.
So the margin looks great, because the costs are missing rather than zero. That is the single most common way a trade business fools itself: not bad maths, just absent maths.
If you fix one thing after reading this, make it putting materials against the job the day you buy them.
Everything else follows from that. Once costs are attached, the three cuts above take ten minutes and they tell you what to sell more of.
What to do with what you find
Put the price up on the bad category first, before dropping it. You will be surprised how often people just pay it, and a category that was marginal at the old price is fine at the new one. If they will not pay it, you have learned something real about that market and you can stop doing it with a clear conscience.
Then look at what your best category has in common with the rest of your work and ask whether more of it exists. Usually it does, and usually nobody has ever gone looking for it because there was never a reason to think it was special.
Give Drizzy a week
Seven days, no card. Delete him if he is useless.
Drizzy in your trade
He works the same whatever you do, but the words change. Pick your trade and see what it looks like.
More
What your first hire actually costs
The wage is somewhere between half and two thirds of it. Here is the rest, and the number of billable hours they have to hit before they pay for themselves.
Getting paid without chasing
Chasing money is a symptom. The fix is almost always earlier in the job than the invoice — in what you wrote down, and when you sent it.