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If you can make $100 in an hour versus $100 in a day, what do you think you should do? Your decision will be easy if your total costs to run your shop total $150 per day. This time evaluation applies to the analysis of jobs. Line up all of your most profitable customers, products or jobs by total profit dollars. How many hours did it require to earn those margin dollars. Unless you add in hourly absorption, you cannot rely on just straight gross profit using only material, labor and outside costs. Divide the total profit you calculated by the hours required in the shop to see which jobs are more profitable and which take away valuable time from searching for new opportunities.
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