“Busy” isn’t the same as “profitable” 

 
Most owners know their turnover and their bank balance – and very little in between. Nigel Dawson, COO and co-founder of easyStorage, on the numbers that sit in the gap. 

Ask most owners in this industry how the business is doing and you will get one of two answers. Either they will tell you what turnover they did last year, or they will tell you what the bank balance looks like this morning. Both are real numbers. Neither tells you very much.  

The gap between them is where the business actually lives. It holds a question surprisingly few firms can answer with confidence: what does one job, or one container, actually earn us? 

The job that looked good 

Take a straightforward house move quoted at £600 plus VAT. The figures are illustrative, but the shape will be familiar. Two crew and a vehicle for the day, and you know roughly what that costs. Fuel and mileage you probably know too. So far, so comfortable.   

Then start adding the parts that never appear on the invoice. The survey visit that took two hours including travel. The quote that took forty minutes to prepare, and the two follow-up calls to win it. The materials. The card processing fee. The reschedule when the completion date moved, and the slot you could not resell at three days’ notice. The hour of office time spent booking, confirming, invoicing and then chasing payment. The empty return leg.   

None of that is unusual. All of it is real cost. Add it up honestly and a job that looked like it carried a comfortable margin can finish close to break-even. If anything goes wrong on the day, it finishes below it. 

The container that sat empty 

Storage has the same problem – but “in slower motion”. A unit let at your standard monthly rate looks like an annual figure you can bank. But the number that decides whether it earns anything is not the rate. It is how long the customer stays.  

Spread the cost of winning that customer, the marketing, the enquiry handling, the discounted first month, the delivery and collection if you move units across a five-week tenancy – and it is a poor piece of business. Spread the same cost across 14 months and it is a good one. Same rate, same container, completely different outcome.  

Meanwhile the unit that stood empty for two months of the year still cost you rent on the pitch, rates, insurance, security and lighting. That is why occupancy on its own is a comforting number rather than a useful one. A site can look full all year while quietly replacing long-stay customers with short ones. 

The uncomfortable part 

Here is the bit nobody enjoys. When firms do this exercise properly, the work that comes out worst is often the work they were proudest of winning.  

The big commercial contract, won on price against three competitors, with payment terms that mean you fund it for 90 days. The prestige job that needed weekend working. The account that produces satisfying volume and also requires a dedicated point of contact, endless reporting and a discount that was only ever meant to be temporary.  

It feels like success because it is visible. It shows up in the turnover figure, which is the number we tend to quote at conferences. It just does not show up in the profit. 

How to find out 

You do not need a finance director or a new software package to do this. You need an afternoon and 10 recent invoices.  

Pick 10 jobs – and pick a mix rather than the ones you remember fondly. For each, write down everything that happened from the first enquiry to the payment clearing, and put a cost against every hour of it. Include your own time at a proper rate, because if you left tomorrow somebody would have to be paid to do it.  

Then work out three things.  

Those three numbers will change how you quote. 
 

What to do with the answer

This is not an argument for turning work away. Some low-margin work covers overhead, fills quiet weeks or leads somewhere better, and you may well decide to keep it. The difference is doing so with your eyes open rather than by accident.  

Once you know which is which, the decisions get easier. You know which enquiries to chase hardest and which to quote politely and let go. You know your minimum realistic price rather than the price you hope to get away with. You know which customers are worth real effort to retain, because you know what it costs to replace them. And you know the difference between a busy month and a good one.  

“Busy” is a feeling. “Profitable” is a calculation.  

Most of us have become very good at the first and never quite got round to the second. 

Nigel Dawson is COO and co-founder of easyStorage. 

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