Guides
The reader's own words,defined once
Offcuts, snag list, retention, variation and day rate all stay. These are the terms used across this site, in plain language.
C
3 terms
- Callout
- A small, usually unplanned job where travel and admin can cost more than the work itself.Read the guide
- Cash flow
- The money actually moving in and out of the bank account. A business can be profitable and still run out of cash.Read the guide
- Cost per job
- Everything a job used: materials, labour, travel, subcontractors and its share of overhead.
D
5 terms
- Datum
- The reference line every other measurement is taken from. On a site it is a level; in a business it is your real cost.
- Day rate
- A price for a day of work, which should cover labour cost, overhead and margin for every hour of that day.
- Debtors ageing
- A list of who owes the business money, grouped by how long each invoice has been outstanding: 30, 60, 90 days and more.
- Direct cost
- Costs that exist only because a job exists: materials, labour on that job, subcontractors, hire.
- Due diligence
- Checking a business's figures, assets, people, contracts and compliance before you buy it.Read the guide
E
1 term
- EBITDA
- Earnings before interest, tax, depreciation and amortisation. A common starting point for valuing a business's operating profit.
H
1 term
- Handover
- The point where a system, model or process is taken over by your own people and runs without outside help.
M
2 terms
- Margin
- Profit as a share of the price. A R10,000 job with R2,000 profit has a 20% margin.Read the guide
- Markup
- Profit as a share of cost. Adding 25% to cost is a 25% markup but only a 20% margin.Read the guide
N
1 term
- Normalised earnings
- Profit adjusted to show what the business earns on its own: owner pay set at a market rate, personal and once-off items removed.
O
4 terms
- Overhead
- What the business pays whether or not a job is running: vehicles, rent, insurance, admin, phones, software.
- Overhead recovery
- The amount each productive hour must carry so that, across the month, overhead is paid for.Read the guide
- Owner add-backs
- Costs the seller ran through the business that a new owner would not carry, added back to profit when valuing it. Each one should be evidenced.
- Owner-dependent
- A business that cannot quote, order, invoice or decide without the owner. It stalls when the owner stops and is harder to sell.Read the guide
P
4 terms
- Practical completion
- The stage where the works are complete enough to be used for their purpose, usually with only minor snags left. It often triggers release of part of the retention.
- Pricing model
- A repeatable way of building a price from cost, so two people pricing the same job get the same answer.
- Productive hour
- A paid hour that ends up on a job. Travel between sites, waiting and rework are paid but often not productive.
- Progress payment
- A payment made at an agreed stage of the work, so cash comes in as the job goes out.
Q
1 term
- Quote-to-invoice
- Everything that happens between sending a price and getting paid for the work. Most profit leaks happen here.
R
1 term
- Retention
- A percentage of each payment held back by the client until the work is complete and defects are fixed.
S
3 terms
- Sellable
- A business that earns without its owner, has records a buyer can rely on, and processes someone else can run.
- Snag list
- The list of small defects and unfinished items recorded near the end of a job, to be fixed before final sign-off.
- SOP
- Standard operating procedure: a short written set of steps for doing a task the same way every time.
V
1 term
- Variation
- A change to the agreed scope, price or time of a job. Agree it in writing before the extra work starts.