OwnMargin guide

Why a busy practice can still lose money

A full calendar measures activity, not profit. A practice can be busy while each service contributes too little, non-billable work consumes the week, or cash is committed elsewhere.

Check the effective hourly rate

Divide the service revenue by the full time it takes, including preparation, notes, travel and follow-up. Compare that result with the hourly cost the business needs to recover, not only the time in front of the client.

Find the work that is not visible in bookings

Administration, quoting, cleaning, ordering and coordination can take meaningful capacity. Record it as part of the operating model so your price reflects how the work is actually delivered.

Look for low-contribution services

Revenue is not enough to compare services. Subtract direct materials, commissions and extra labour, then compare the remaining contribution with the time and space consumed. A popular service may need a new price, scope or schedule.

Separate profit from cash pressure

Taxes, loan payments, equipment purchases and owner withdrawals can reduce cash even when the operating result is positive. Review a simple cash plan before concluding that the price is the only problem.

Choose one change and test it

Test a higher price, shorter service, better utilization or lower overhead one at a time. A scenario makes the trade-off visible and helps you explain the decision to your team.