A commercial cleaning and facility services company · About $9M revenue; 120 field staff; 160 contracts
A Novare engagement. The client's name is withheld.
Which contracts are losing us money?
The answer 14 of 160. Most were priced before a wage increase and never updated.
- $310Ka year back in margin
- 14of 160 contracts fixed
- 11% → 14.4%gross margin
A Novare engagement. The client's name is withheld.
The question
Every contract looked fine on its own. Together, margins kept slipping. The owner’s banker asked a fair question: which customers actually make money? Nobody could answer it.
- Payroll, scheduling and invoicing didn’t share an account ID.
- A wage increase hit all contracts. Prices didn’t move.
- Extra work got done and was often not billed.
What we looked at
We matched hours, pay and invoices for every contract, every month.
- 14 contracts lost money. Most ran far more hours than the bid assumed.
- A few had added scope, like extra floors, that was never billed.
- The best contracts were the ones with clear scope and regular price reviews.
Labels are generic to keep the client anonymous.
What we built
Contract-level margin
Revenue, labor, supplies and margin for every contract, refreshed monthly.
A scorecard
Hours vs. bid and margin, with a clear next step for each contract.
Renewal playbook
Reprice, rescope or let go, with the numbers to back up the conversation.
Bid guardrails
New bids priced from hours, with a margin floor.
| Contract | Hours, bid vs. actual | Margin | Action |
|---|---|---|---|
| Contract 017 | +22% | −9% | Reprice |
| Contract 042 | +4% | −6% | Bill the added floors |
| Contract 088 | +31% | −24% | Let go at renewal |
| Contract 103 | +15% | −5% | Rescope nights |
The answer and the money
At renewal, 9 contracts were repriced, 3 were rescoped and 2 were let go. Gross margin rose from about 11% to 14.4%, which is about $310K a year.
| Before | After | Change | |
|---|---|---|---|
| Contracts losing money | 14 of 160 | Fixed at renewal: 9 repriced, 3 rescoped, 2 let go | 14 fixed |
| Gross margin | About 11% | 14.4% | About +3.4 points |
| Annual value | — | About $310K a year back in margin | ≈$310K a year |
Labels are generic to keep the client anonymous.
Fewer, better contracts. More of every dollar billed stays in the business.
The work behind this story
Systems involved: Payroll, scheduling and invoicing.
A Novare engagement. The client's name is withheld. Results vary by business. One company's results are not a forecast for another.
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