Understanding Your Restoration Company’s Profit & Loss Statement
Even if you're busy running jobs and keeping up with insurance paperwork, understanding your P&L is non-negotiable if you want to grow a stable and profitable restoration company. Yet, most owners either don’t look at it often—or don’t trust what they’re seeing.
Let’s fix that.
What Is a P&L and Why Should You Care?
A profit and loss (P&L) statement—sometimes called an income statement—shows your revenue, your costs, and your profit over a specific time period. It tells the story of how money comes in and where it goes. If you’re only checking your bank balance to gauge success, you're flying blind.
When reviewed monthly, a clean, accurate P&L can help you:
Spot issues early (like rising material costs or bloated overhead)
Evaluate job profitability
Decide when it’s time to hire—or when to wait
Identify cash leaks you didn’t know were there
The Four Key Sections to Watch
Revenue
This is the total amount your business earned. For restoration contractors, this may include water mitigation, mold remediation, contents cleaning, or reconstruction.Cost of Goods Sold (COGS)
Includes subcontractors, equipment rentals, and materials. If this category is too high, it may point to poor estimating, job scope creep, or mismanagement in the field.Labor (Included in COGS)
Typically includes W-2 techs and hourly field employees. If your labor is too low, you may be relying too heavily on subs. If it’s too high, you may not be billing enough work.Overhead
Everything it takes to run your business that isn’t tied to a specific job: office staff, rent, software, marketing, insurance, etc. Keep this lean, but don’t starve the business.Net Profit
What’s left after the COGS and expenses are paid. For a healthy restoration company, we like to see 20%+ net profit margins. If you’re under 10%, it’s time to look at pricing, overhead, and efficiency.
How to Use This Every Month
Compare month-to-month and against your annual goals
Set target percentages (like labor under 25%) and monitor them
Watch for sudden jumps in expenses or declining profits
Use it to create a scorecard for your team
Want Help Understanding Your P&L?
We work with restoration business owners across the country to help them make sense of their numbers, set better benchmarks, and grow profitably. If you want to go from guessing to knowing, let’s talk.