Why do most trade businesses feel busy but not profitable?
40under40 2026 Winner- Most trade businesses feel busy but not profitable because their prices haven’t kept up with their costs.
- At Smartfix’s $30M peak, revenue kept climbing and there was no profit.
- Public holidays, vehicle repayments, lead costs and card fees all need to be in your price.
- Fixed pricing built off your real costs beats a guessed hourly rate.
- Check profit per job every month, after the supplier invoices are in.
The short answer
Most trade businesses feel busy but not profitable because the work is priced too low for what it really costs to deliver. Costs grow every time you hire, buy a vehicle or spend more on leads, and if your prices stay where they were, the extra jobs just pay for the extra overhead. I learned this the hard way at Smartfix’s $30M peak.
Why does my trade business feel busy but not profitable?
If your team’s flat out, the phone keeps ringing and you still can’t pay yourself properly, your business is busy but not profitable. I know that feeling well. I had it worst at Smartfix’s peak, with 130+ staff and about $30 million a year in revenue.
Most of the time it comes back to price. The jobs are priced for a smaller, cheaper business than the one you’re running now. Every hire, vehicle, software subscription and bit of office space adds cost. If your prices didn’t move with it, the extra work only covers the extra overhead.
My brother Finley Dearlove, our Head of Installations, said it plainly when we talked about 8 years of Smartfix: “the revenue was going up, but there was no profit.”
What does busy but not profitable look like from the inside?
At the peak we’d look back at the numbers and say, this is the new break even now. My answer was always to push harder. More money into Google to get enough leads to keep the guys busy, ten or twelve quotes a day, a 16% conversion rate and $1,100 net per job.
It didn’t work. Our cost per lead from Google ended up about double what it should have been, because we were overpaying to get the volume. The guys had 12 quotes each, so they rushed. Conversion dropped, the average job value dropped, and then we needed more people in the office to answer the phones. Every fix made us busier and cost more.
In March and April 2025 we lost a lot of money in two months and had to sell buildings and vehicles and let staff go. I told the whole story on the podcast with Aisha Derrick.
Here are the signs I’d watch for now:
- Revenue’s up on last year and cash still feels tight
- You’re quoting more than ever and winning a smaller share
- You keep hiring and never feel any relief
- The end of month profit figure surprises you
- The tax bill catches you out every year
Why do so many tradies undercharge?
Angelo Rossi worked for me at Smartfix before he started TopTech Electrical in June 2024, doing electrical and air con. When he came on the podcast, he was honest about pricing in his first year: “When I started, I had no idea what to charge on anything. So I was just kind of winging it.”
His first quote was at $100 an hour. Then he went up to $130. “Still not enough, and you’re still raising it,” he said. He kept going up bit by bit until he had good money coming in, enough to pay the bills and buy a van.
$100 to $110 an hour is the number a lot of people start on, because it sounds like plenty. Customers think the same way. Tell them $300 an hour and they assume that’s what you take home. There’s a whole business behind that number, and very little of it ends up in your pocket.
Nobody teaches you this. TAFE teaches you the trade. I only started doing a proper budget sheet in the last two years, and Smartfix was eight or nine years in by then.
Undercharging feels good for a year, maybe two. Then the tax bill arrives. You can survive on $80 or $110 an hour if you’ve got steady work from somewhere, but you can’t grow on it. Hiring a tradie at that rate is even riskier. If he’s no good and you pay him out a week’s notice after two weeks, there’s no surplus to cover it.
What costs are hiding in your price?
When I sat down and properly costed Smartfix, these were the ones that caught us out:
- Public holidays. There are about 10 a year, and that’s 10 days with no money coming in. For us it works out at about $35,000 a month on average over the year that we have to cover. April is the worst, with Anzac Day and two days for Easter.
- Five pay cycle months. Every three months or so you get a month with an extra pay run. April is one of those too.
- Vehicle repayments. Our Xero only showed the interest on our vehicle loans. We now add the full weekly repayment in manually.
- Lead costs. A Google lead costs us around $350, and that’s for a quote. If we win half of them, that’s $700 in ads before anyone has picked up a tool.
- Card fees. Customers can pay by card on the spot from a ServiceM8 invoice, which is great for cash flow. The surcharge is about 2%, and for us that’s about $20,000 a month.
- Consumables. Even when a customer supplies their own air con, the pipework, isolator, brackets and switchboard work still run to about $400.
One more thing: the profit number on the 1st of the month is usually wrong. We wait one or two weeks for the wholesalers’ invoices and statements to land in Xero before we read it.
Should you charge by the hour or a fixed price?
All our pricing at Smartfix is fixed. I quote the job. If you tell a customer the hourly rate behind it, they won’t understand it, and you’ll spend the whole visit defending the number.
Myles Gaebler runs Perth Building Inspection Repairs and he’s 21. When he was on the podcast, he’d been doing 8 to 10 thousand a week in revenue and profiting about 7 to 8 thousand, working by himself with one other guy helping. He was clear on why:
Myles also told me about a roof job he quoted at $10,000 to fix properly, with the tie downs, strapping and sign off. The real estate agent rang to say someone else was doing it for two grand. Materials alone would have been about that. He’s happy to walk away from a job like that if the only way to win it is cutting corners, and he’s 21.
Good customers will pay a fixed price. At Smartfix we still win 50 to 60% of the jobs we quote. People have no issue paying for a good service.
Which jobs should you stop taking on?
Some work keeps the calendar full and leaves nothing behind. Cutting it back is one of the fastest ways out of being busy but not profitable.
For us that’s customers who flat refuse to let us come to site to quote. We used to turn them away completely. Now those bookings get tasked to me and I call them myself, because every house is different and a phone price is a guess.
Angelo found the same with Facebook ads. People message asking how much for a power point, you give them a price, and that’s the last you hear from them. He also finds real estate work very competitive on price, because agents have plenty of trades to pick from and usually go with the cheapest.
Myles has gone further. He told me he’d turned away about $40,000 worth of work in a month, because he wanted to focus on other parts of his life and business. Most owners can’t afford to do that, but it’s worth knowing which jobs you’d drop first.
How do you check whether a job actually made money?
Here’s the process I’d start with if your trade business feels busy but not profitable:
- Add up what the business costs to run each week: wages, full vehicle repayments, insurance, software, rent, leads and card fees.
- Allow for public holidays, quiet months and five pay cycle months across the year.
- Work out how many hours your team can realistically bill each week once travel, quoting and pickups are taken out.
- Build your fixed prices off those real costs, plus materials with a proper markup.
- Every month, once the supplier invoices are in, check profit per job, your win rate and your cost per lead.
You need a good bookkeeper and an accountant for this, but you also need to understand it yourself, or you can’t answer the big question: can I actually afford that next hire? If you want something to work from, business.gov.au has free guides on pricing and cash flow. I’ve also written about the systems a residential trade business actually needs to track this properly.
Where should you start this week?
Pull last month’s jobs and pick your five most common job types. For each one, write down what you charged, what the materials cost and how many hours it really took, including travel and the quote visit. Put that next to your weekly running costs and see which jobs are paying for the business.
If most of them aren’t, fix the price before you hire anyone else. I covered that in what to fix before hiring more people.
If you want to work through your own numbers with other trade owners in Perth, have a listen to the Angelo and Myles episodes first, then have a look at Hypotential membership. Pricing comes up at every networking night I run.
FAQ