Do you know how much your jobs are actually costing you to complete?
That gap — between what you think a job costs and what it actually costs — is where margin disappears.
Originally sent in From the Desk of Justin Hubbard on April 12, 2026.
The short version: The gap between what you think a job costs and what it actually costs is where margin disappears. Price in burdened labor, your own time, fuel, disposal, materials, equipment depreciation and an overhead share, then run that math on your last ten jobs.
You can probably tell me what a job pays. But you'd have a hard time telling me what it actually costs.
Not the obvious stuff — the dump fee, the labor, the fuel. Those are easy. I mean the real cost. The full cost. Every dollar of time, overhead, wear, and risk that gets consumed the moment you say yes to a job.
That gap — between what you think a job costs and what it actually costs — is where margin disappears. Silently, consistently, job after job, until you're wondering why a busy month still left you broke.
Let me show you what I mean.
Here's a residential garage cleanout, quoted at $600. Seems fine, right?
Let's run the real numbers.
- Direct labor: two crew members, 2.5 hours each at $20/hr plus ~20% employer burden = $120
- Your own time: 1 hour driving and coordinating at $75/hr = $75
- Fuel: 35-mile round trip in a loaded truck = $30
- Disposal: one truckload, mid-weight = $80
- Materials: tarps, bags = $10
- Equipment depreciation: 35 miles at $0.40/mile = $14
- Overhead allocation: your share of monthly fixed costs = $75
True job cost: $404. Gross profit: $196. Gross margin: 32.7%.
That job doesn't clear a 35% floor.
And the only reason you'd know that is because you ran the math. Without it, you're guessing — and most operators are guessing on every single job they quote.
A few things in that breakdown that people skip every time
Your own time. If you're owner-operating, your time on a job has a cost whether you pay yourself explicitly or not. If you're not pricing it, you're subsidizing your customers with your own labor.
Equipment depreciation. Your truck has a finite life. A $60,000 work truck running 150,000 miles has a cost of $0.40 per mile in depreciation alone — before maintenance, tires, or repairs. On a 40-mile round trip that's $16 baked into every job whether you account for it or not. Most don't. Then they're surprised when a $4,000 repair shows up and there's nothing set aside.
Overhead allocation. Every job needs to carry a share of your fixed costs. If your monthly overhead is $6,000 and you run 80 jobs, each job needs to contribute $75 just to keep the lights on — before a dollar of profit exists. If it's not in your pricing, you're not profitable. You're just covering direct costs while overhead drains you.
Here's the formula
True Job Cost = Direct Labor (with burden) + Owner Time + Fuel + Disposal + Materials + Equipment Depreciation + Overhead Allocation
Gross Profit = Revenue − True Job Cost
Gross Margin % = Gross Profit ÷ Revenue
Run this on your last ten jobs.
You will find jobs you thought were profitable that weren't. You will find services you've been underpricing for months. You will also find some that are more profitable than you realized, which tells you exactly where to focus.
That exercise alone is worth more than most business advice you'll ever read.
This is Chapter 3 of Beyond Breaking Even, What Does a Job Actually Cost You? The whole book is built around this kind of math. The specific numbers, formulas, and frameworks that tell you what's actually happening in your business.
— Justin
Related: Junk removal pricing and profit calculator · When to stop offering unprofitable services · Junk removal pricing over the phone