About Trade Profit Lab

Why We Built Trade Profit Lab

Trade Profit Lab began as an internal tool for our own business. We needed a simpler way to work through job pricing, labor rates, cost recovery, markup, margin, and profit calculations without rebuilding spreadsheets or repeating the same math by hand.

As we worked with contractors, we found that the same calculations helped them determine their rates and understand their numbers more easily. Because the tools proved useful beyond our own internal needs, we decided to make them publicly available.

Built for Contractors and Service Businesses

The tools are intended for businesses that need to understand the economics of individual jobs. That includes HVAC, plumbing, electrical, roofing, landscaping, general contracting, home services, repair businesses, and other job-based service companies. The examples are contractor-focused, but the underlying relationships can apply to many businesses that price and perform individual jobs.

Know the Cost Before You Set the Price

Useful pricing starts with a realistic understanding of cost. Before deciding what a job should sell for, a contractor may need to account for labor cost, labor burden, materials, subcontractors, equipment, other direct job expenses, overhead, and the desired margin.

After the work is complete, actual revenue and costs should be compared with the estimate. That feedback is what turns one calculation into better information for the next job. The How Trade Profit Lab Works page shows which tool fits each step.

How Our Calculations Work

Trade Profit Lab uses standard business and cost-accounting relationships presented in practical form. The formulas are not proprietary; the goal is to make the inputs, calculation, result, and meaning easier to follow.

Job Profit

Job costs may include labor, materials, subcontractors, equipment, and other applicable direct costs. The resulting job-level profit is not necessarily the same as company net profit. Use the Job Profit Calculator to compare revenue with actual job costs.

Profit Margin

Margin expresses profit as a percentage of selling price or revenue. It answers a different question from markup.

Markup

Markup is based on cost, not selling price. Markup and margin are not interchangeable. Use the Markup & Margin Calculator for conversions and pricing, or read the Markup vs Margin guide for worked examples.

Pricing for a Target Margin

This determines the selling price required to produce a selected gross margin, assuming the cost estimate is accurate. The Markup & Margin Calculator can price a job from its target margin.

Labor Burden

Base wage is not necessarily an employee's true cost. Labor burden may include employer payroll taxes, workers' compensation, benefits, retirement contributions, and other employee-specific costs. Paid non-working time can also reduce productive hours and increase the effective cost per productive hour. Use the Labor Burden Calculator to assemble those costs.

Labor Rate

True employee cost is different from the rate charged to a customer. A billable rate may also need to recover overhead, non-billable time, and profit. The Labor Rate Calculator connects those assumptions to an hourly customer rate.

Overhead Recovery

Overhead includes business costs that are not necessarily attributable to one individual job, such as office expense, insurance, software, administration, marketing, and other general business costs. Jobs collectively need to recover these expenses. The Overhead Recovery Calculator shows several practical allocation methods.

Break-Even

Break-even represents the revenue or sales volume required to cover costs before profit begins. Use the Break-Even Calculator to estimate the required monthly revenue and sales volume.

Estimates Are Only the Starting Point

Calculators can help estimate cost, required selling price, margin, labor rate, and overhead recovery. Actual job profitability still depends on the revenue received and the costs actually incurred.

Compare estimated cost with actual cost and target margin with actual margin. The practical Job Costing guide explains that feedback loop, and the Job Profit Calculator helps measure the completed job.

Job Profit Is Not Always Net Business Profit

A calculator may report job-level profit or gross job profit after the specified job costs are deducted. That amount may still need to support company overhead, taxes, financing costs, owner compensation, and other expenses not allocated directly to the job. The result should be interpreted according to the costs included in the calculation rather than assumed to be company net profit.

Transparent Formulas, Not Black Boxes

Trade Profit Lab intentionally shows how calculations are derived. A user should be able to see what values were entered, what formula was used, what result was produced, and what the result means. Calculators and guides expose formulas and worked examples where practical instead of presenting unexplained answers.

Who Operates Trade Profit Lab?

Trade Profit Lab is developed and operated by Brevard Cloud. Brevard Cloud works with businesses on technology and business systems, and Trade Profit Lab grew from practical tools originally used internally and with contractors.

Trade Profit Lab remains the public-facing editorial identity for the calculators and guides. Brevard Cloud is the developer and operator of the website.

Important Limitations

Trade Profit Lab calculators are intended for estimating, pricing, business planning, and cost analysis. They do not replace professional accounting, tax, legal, payroll, insurance, or financial advice. Users are responsible for entering values and assumptions appropriate for their own business.

Payroll taxes, workers' compensation, insurance rates, labor conditions, and other costs vary by company, location, and circumstances. Review important decisions with a qualified professional who understands your situation. The site's formal limitations and terms are available in the Terms of Use.