Your Gut Isn’t a Financial Strategy: Why You Need to Break Down Profit by Service Line
If you’ve been running a restoration company for a while, you probably have a gut feeling about where the money’s coming from. Maybe you think rebuild pays the bills, or mitigation is your bread and butter. That instinct is valuable—but it’s not always accurate.
Too often, we see restoration companies relying on hunches instead of hard numbers. And when we dig into the financials? The data tells a very different story.
Trust, but Verify: Your Numbers Might Surprise You
It’s easy to assume that if you’re staying busy and invoicing regularly, things are going well. But staying busy doesn’t always mean staying profitable.
To really understand your business performance, here’s a simple but eye-opening exercise:
🔸 Pull the last 3 months of jobs
🔸 Sort them by service line—mitigation, rebuild, contents, mold
🔸 Compare revenue, labor, and materials for each category
🔸 Calculate gross profit and margin by service line
You’ll likely find that each category has a very different financial profile. One might be reliably profitable, another might be dragging you down—and you’d never know unless you break it out.
Why Service Line Reporting Matters
When you only look at the top-level numbers, a few strong jobs can mask serious underperformance elsewhere.
Mitigation might turn jobs fast but eat up labor hours.
Rebuild may bring in bigger invoices, but cash flow can get tight and subcontractor costs are higher.
Mold might be highly profitable per job but sporadic.
Contents may not be worth the effort unless it’s well-managed.
If you’re combining all of that into one big financial picture, it’s almost impossible to know which part of the business is really working—and which parts need to change.
What You Can Do With Service Line Visibility
When you split out revenue and costs by service line, you unlock the ability to:
✅ Adjust pricing where margins are too tight
✅ Spot profitable services that aren’t getting enough focus
✅ See which services scale well (and which don’t)
✅ Improve resource allocation across your team
✅ Set clearer sales targets by type of work
You’ll stop flying blind and start making decisions based on facts—not just how things feel.
The First Step Is Simpler Than You Think
You don’t need a huge accounting overhaul to get this insight. Even if you’re not tracking job-level profitability, just tagging revenue and COGS by service type can get you 80% of the way there. You can do this in QuickBooks Online using classes or locations, or even export the data into a spreadsheet for a basic breakdown.
The key is consistency. Once you start reviewing your numbers this way, it becomes a powerful habit.
Don’t Let a Profitable Year Hide Unprofitable Work
If you’re only looking at total revenue and net income, you’re missing the real story. You might be doing 20% of your jobs at a loss—and using your other work to cover for it. That’s not sustainable growth.
Instead, take the time to understand where your profit is actually coming from. Good reporting gives you the clarity to scale the right parts of your business and fix the rest.
Want help breaking your numbers down the right way?
Let’s talk. We’ll show you how to track your service lines clearly and make sense of the results.
📅 Schedule a call here