On a small job the cost of getting there is a large share of the total, and most contractors do not cost it at all. They cost the parts and the time on site, and the truck roll disappears into overhead where it stops being attributable to anything.
Written by JD Davenport, who still sells for a living. Updated 4 November 2026.
Service work breaks the usual method, and it breaks it in a specific way that is worth naming before you try to fix it.
Parts. Time on site. And then the part nobody writes down: drive time both ways, the fuel, the scheduling call, the dispatch, the invoice somebody raises afterward, and the payment somebody chases.
On a large job those last items are a rounding error against the contract. On a small repair they can be most of the cost. Treat them as overhead and every service call looks profitable while the business quietly is not.
Cost the visit, not the repair.
Work out a loaded cost per truck hour. Everything that truck costs you in a year, including the person in it and the share of the office that supports it, divided by the hours it is actually billable rather than the hours it exists.
That denominator is the part people get wrong. A truck is not billable forty hours a week. Use what it really is, from your own schedule, or the figure flatters you.
Then cost each call as drive time plus on-site time at that rate, plus parts at your actual cost. That is the number to compare against what you charged.
Three things, and all three change decisions.
Your minimum charge is probably too low. Once the truck roll is costed, a lot of small jobs are below water on arrival. A minimum that covers the visit is not a fee. It is the floor at which a call is worth taking.
Travel is a pricing input, not an inconvenience. If your calls are scattered, drive time is a real share of every one, and either the price or the territory has to move. It is not a scheduling complaint.
Some service is worth doing at a loss and you should know which. A repair that protects a maintenance relationship or produces a replacement next year is an acquisition cost. That is a legitimate decision and a completely different thing from not knowing it loses money.
Do not blend service into your project margins. The shapes are different and blending hides both.
Project work is a few large jobs where material dominates. Service is many small jobs where time and travel dominate. One average across both describes neither, and the service side is usually the one carrying a loss nobody can see.
Report them side by side. Same method, separate columns.
Every call has a job number before the truck leaves. Parts get coded at the counter rather than reconstructed from a receipt three weeks later. Drive time is recorded, even roughly, because roughly recorded beats not recorded.
None of those depend on anybody remembering. They depend on the job number being a required field rather than something somebody fills in afterward from an address.
The costing method, the tests and the workbook are The Job Cost Standard. Making the job number impossible to omit before a truck moves is The Production Standard. More answers on the questions page.