Most trade and service businesses don't have a pricing problem — they have a leakage problem. The quote was right, the customer was happy, the invoice was paid... and the margin still came in thinner than expected. That's not bad luck. It's one of five predictable leaks, and because each one is small on any single job, none of them ever feels urgent enough to fix.
Here's the uncomfortable arithmetic first: a 10% margin leak on a business turning over £500,000 is £50,000 a year. Not lost in one place — dripped through five. Let's name them.
Leak 1: The Hours Nobody Logs
The single biggest leak in most trades businesses is labour that happens but never gets recorded against a job:
- The 40 minutes of van time and merchant queue
- The Saturday "quick look" at a job that's nearly done
- The phone calls, the re-order, the wait for the delivery slot
If it isn't logged, two things go wrong. First, the job looks more profitable than it was. Second — and worse — your next quote uses the same optimistic labour estimate, so the leak repeats on every future job of that type. Unlogged hours don't just cost once; they corrupt every subsequent price you set.
The fix: log labour in hours, same day, even roughly. A start/stop timer or a one-line entry beats a perfect timesheet you'll never keep. (This is why job costing treats time logs as a first-class input, not an optional extra.)
Leak 2: Supplier Runs and Fuel
Three trips to the merchant at £18 of fuel and 50 minutes each. None of it was quoted. All of it was real. Across a month of jobs, "supplier runs" quietly become one of your biggest unbudgeted cost categories — and because it's scattered across fuel receipts and memory, it's invisible in most bookkeeping.
The fix: give it its own cost category and log it. The moment you see "Supplier runs: £310 this month" in one line, you'll start consolidating trips — and quoting delivery into jobs where the runs are predictable.
Leak 3: Scope Creep, Five Minutes at a Time
"While you're here, could you just…" is the most expensive sentence in the trades. Five favours at 20 minutes each is most of a day's margin, spread across a job in pieces too small to notice — and rarely charged because invoicing a £40 favour feels awkward.
The fix: this is a quoting fix, not a personality fix. Two lines in your quote terms do the work: "Additional work requested after acceptance will be quoted separately" — and then actually quote it, even when it's small. Customers respect a clear boundary far more than a quiet resentment.
Leak 4: Optimistic Estimates
Quoting 30 hours because that's how long the job should take, not how long the last three did take. Every trade does it, because memory is generous: you remember the job going well, not the extra day when the plaster didn't cooperate.
The fix: let actuals correct the estimates. If your labour hours are logged (Leak 1), the fix is mechanical: before quoting a familiar job type, look at what the last three actually cost in hours. Quote the real number, plus a small contingency. Your quotes get slightly higher and your win rate barely moves — but every job you win is finally profitable.
Leak 5: Subcontractor Drift
The subbie quoted at £600 who invoices £750. The day rate that crept from £220 to £240. The "small extra" the sub did that you're now paying for. Subcontractor costs drift because the agreement lives in a text message, not in the quote.
The fix: put the subbie cost in the quote as a line with your estimated cost, and confirm the rate in writing before they start. When actual costs are logged against the job, drift becomes visible the day the invoice lands — not at year-end when it's been absorbed into a general "subcontractors" account.
Why These Leaks Survive
Notice what all five have in common: each one is individually too small to feel, and collectively they're the difference between a good year and a hard one. They survive because they're invisible — scattered across fuel receipts, memory, text messages and a bookkeeping system that records costs by type, never by job.
That's the actual insight: you can't fix leaks you can't see per job. A profit-and-loss account by category can't tell you the Hargreaves kitchen ran 14 hours over. Only job-level tracking can — which is why the fix for all five leaks is the same system: costs logged against jobs, compared against quotes, reviewed weekly.
The Friday Audit (Start This Week)
You don't need software to start finding your leaks — you need one hour and a spreadsheet:
- Pick your last five completed jobs
- Reconstruct the real cost of each: materials, logged hours (best guess honestly), fuel, subs
- Compare against what you quoted
- Sort the five leaks by size for your business
Our free job costing template gives you the structure in 20 minutes. Most owners find their biggest leak in the first Friday session — and it's rarely the one they expected.
When you want the leaks visible live — on every job, logged by your whole team without spreadsheet discipline — that's what SME System does. Start a free trial, convert your next job, and watch where the money actually goes.