- Best for
- Owners whose sales keep going up while the money left at the end of the month stays flat or shrinks.
- Time to run
- One afternoon to pull the numbers. One week to decide what to change.
- You finish with
- The real margin on each type of customer, and a clear plan for the ones that cost you money.
01 The problem
More customers should mean more profit. But some customers eat your time. They want rush jobs, extra changes, small orders and lots of phone calls. They pay the same price as everyone else and cost you far more to serve.
If you don’t know which ones they are, you keep chasing more of them. Revenue goes up, your team gets busier, and profit doesn’t move. Sometimes it drops.
02 The numbers
Group your customers in a way that makes sense for your business, like by service, job size or customer type. Then work out these three numbers for each group.
| Measure | How to get it | Why it matters |
|---|---|---|
| Revenue per group | Pull the last six to twelve months of invoices and add them up by customer group. | It shows where your money comes from, which is often not where you think. |
| Cost to serve per group | Add up direct costs like materials, plus staff hours spent on quoting, support, changes and chasing payment. | This is the hidden part. Two customers paying the same can cost very different amounts to look after. |
| Margin per group | Subtract cost to serve from revenue for each group, then divide by that group’s revenue. | This is the number that tells you who to grow, who to reprice and who to let go. |
Rule of thumbIf a customer group takes more of your team’s time than its share of your revenue, it’s probably costing you money. Check it first.
03 The steps
- 1Split customers into groupsWho: you. Time: one hour. Done when every customer from the last year sits in one group on the worksheet.
- 2Add up revenue and direct costsWho: you or your bookkeeper. Time: two hours. Done when each group has its total revenue and direct costs filled in.
- 3Estimate the time each group takesWho: you and the people who serve customers. Time: one hour. Done when each group has a rough share of team hours, turned into a dollar cost.
- 4Decide what changes for the worst groupWho: you. Time: one week. Done when you’ve picked one fix for your lowest-margin group, like a price rise, a minimum order or a new fee, and told the team.
Write down your ten biggest customers by revenue. Next to each, write how much of your team’s time they take: a little, normal or a lot. Any name with big revenue and a lot of time deserves a closer look.
04 The template
Some customers lose you money. Here’s how to find them and what to do about it.
BIZPLAYBOOKS
Kevin helps owners use AI to get time and money back, then turns what works into free playbooks.
