The Hidden Business Killer: Why “It Depends” Is the Only Honest Answer

This week, I want to share something that’s been on my mind.

I get asked the same types of questions all the time:

• How long should an install take?

• What should my labor rate be?

• How much should I charge per fixture?

• What’s the right crew size?

• What should my margins be?

And my honest answer is always the same:

It depends.

It depends on your goals.
It depends on your phase of business.
It depends on how your business is actually operating — not how you think it’s operating.

The Back-of-the-Napkin Dream

When my brother and I started our lighting business, we did what most entrepreneurs do.

We ran the quick math.

• Average job: $4,000

• Three jobs per week

• Roughly $600,000 per year

We figured products weren’t that expensive. We assumed we’d clear $400,000 and split it — $200,000 each.

Sounds great, right?

That’s not what happened.

What actually happened was this:

We sold jobs.
We made money.
We spent money.
Then we sold more jobs.
Made more money.
Spent more money.

No budget.
No bookkeeper.
No real understanding of overhead.

At first, I paid myself just enough to survive. Then about 15–18 months in, I remember thinking:

“Where did the money go?”

There was even a four-month stretch where I didn’t pay myself at all. Payroll came first. I came last.

The Real Problem: Overhead Growth

As we grew, our overhead exploded.

More trucks.
More insurance.
More employees.

But our pricing didn’t change.
Our sales process didn’t change.
Our delivery didn’t change.

That’s when I learned about something that nearly killed my business:

Throughput.

Throughput is how fast — and how profitably — your work turns into cash.

You can:

• Raise prices

• Close deals faster

• Sell bigger jobs

And still be broke.

I see it happen all the time.

Someone doubles their price per light.
Moves to one-call closes.
Sells more than ever.

Then they ask, “Why do I still have no money?”

Because throughput is leaking profit out the back door.

A Simple Example

Let’s break it down.

• Daily overhead: $1,500

• Job sold: $5,000

• Materials: 25%

Now imagine that job takes one extra day.

You just burned $1,500.

That “quick stop back tomorrow.”
That “just a few more hours.”
That “we’ll wrap it up in the morning.”

That’s not free.

That’s the difference between profit and loss.

And most business owners don’t even realize it’s happening.

Why?

Because they’re not job costing.
They’re not measuring install time.
They’re not tracking throughput.

They’re building a charity — not a business.

What You Should Do Next

If you want to protect your profit, start here:

1. Measure how long installs actually take.

2. Job cost every project.

3. Calculate your true daily overhead.

4. Schedule time away from operations to analyze your numbers.

If installs are taking too long, maybe you need to charge more.

If installs aren’t complex but crews are slow, maybe hourly pay is the issue.

Maybe incentives or performance pay would change everything.

But none of that matters until you see the data.

Because it makes zero sense to chase more revenue, sell more jobs, and grow bigger…

If there’s no profit waiting for you on the other side.

Take a hard look at your throughput.

It might be the most expensive problem in your business — and you don’t even know it yet.

Keep moving forward,
Ryan Lee

#throughput in business, job costing, business overhead, installation profitability, small business margins, service business growth, pricing strategy, crew efficiency, contractor profit, cash flow management, scaling a service business#