The customer price is not the job cost
If a customer is quoted £396, that is revenue if the job is accepted and completed. It does not tell the owner what will be left after paying for the crew, vehicle and other direct items needed to run that job.
The planned job cost is the expected direct cost of the current plan. Contribution is the customer price minus that planned direct cost. Contribution margin is the contribution shown as a percentage of the customer price. These figures are useful only when the system keeps them separate and labels them plainly.
Build the job before selling it
A customer enquiry can describe the move, but the customer should not decide how many people the business needs, which van should be used or how long the work will take. Those are business decisions.
The owner reviews the addresses, access, inventory, extras, date and evidence. They then select the intended people, vehicle, start time and planned working duration. Until that plan exists, there should be no confident job-cost figure on screen.
Make every cost traceable
Each person and vehicle should have a business cost rate using the unit that fits the operation. That might be per hour, day, load, job or mile. Other direct items can include a fixed disposal fee, partner payment or referral arrangement when it genuinely applies to the job.
The breakdown should show how the total was reached. If three people are planned for five hours, that represents 15 person-hours. If the van is costed per day, it should use the daily vehicle cost instead of pretending every cost is hourly.
- People selected and their configured business cost rates
- Vehicle selected and its relevant cost unit
- Owner-controlled planned duration or other quantity
- Mileage, fixed fees and payable extras where applicable
- A visible total that updates with the plan
A simple fictional example
For a fictional removal job, the selected crew might create £164 of planned people cost and the selected Luton van might add £48. The planned direct job cost would be £212.
If the owner sets the customer price at £396, the planned contribution is £184. The contribution margin is about 46 per cent because £184 is approximately 46 per cent of £396. This is a planning example, not a claim about a real business or a recommended removals price.
Contribution is not the same as final profit
Contribution shows what remains after the direct costs included in the job plan. The business may still need to cover overheads such as insurance, software, premises, maintenance and administration, as well as tax. Calling contribution profit would overstate what the figure means.
Its practical value is comparison. The owner can see whether the proposed price covers the planned direct work and leaves a sensible contribution before deciding whether to send the quote.
The number must move with the plan
Adding a worker, changing the duration, choosing another vehicle or adding a payable service should change the planned job cost immediately. Removing an item should remove its cost. A static total detached from the selected resources creates false confidence.
Before acceptance, the resources remain planned. When the customer accepts, the agreed commercial details are retained and the selected resources become committed. That turns a useful estimate into an operational booking without hiding how the decision was made.