Most owners of a decorating business know roughly how busy they are. Far fewer know whether they are actually making money on each job, where profit is leaking, or which part of the business is growing. Key performance indicators, or KPIs, answer those questions in a few numbers you can check every month.
This guide covers the 7 KPIs that matter most for a decorating business, how to calculate each one, and what to do when a number moves the wrong way.
Why KPIs matter more than turnover
Turnover tells you how much came in. It does not tell you whether prices cover costs, whether staff time is being used well, or whether cash will be there next month. A decorating business can grow turnover and still make less profit if costs grow faster. KPIs show you the drivers behind the result, early enough to act.
The 7 KPIs for a decorating business
1. Average job value
How to calculate it: Total revenue ÷ jobs
Shows whether you are moving towards whole-house and specialist work.
2. Labour hours sold
How to calculate it: Billable hours in the month
Your capacity, after quoting visits and weather.
3. Effective day rate
How to calculate it: Labour revenue ÷ days worked
Catches jobs where prep took longer than quoted.
4. Materials billed
How to calculate it: Materials charged to customers
Compare with paint bought to spot free materials.
5. Labour margin
How to calculate it: (Labour revenue − labour cost) ÷ labour revenue
Whether your rate covers your time and any staff.
6. Quote win rate
How to calculate it: Quotes accepted ÷ quotes sent
Too high may mean you are too cheap; too low may mean slow or vague quotes.
7. Follow-ups due
How to calculate it: Customers with a follow-up date in the next 30 days
Repeat rooms, exteriors and referrals.
Interpreting these measures in practice
Compare each quote with actual labour, preparation, protection materials, paint, travel and drying-related return visits. Track the area or rooms completed against the estimate, and record variations before extra work is done. Weather and access delays can move a job’s costs and payment dates between months, so compare project margin with stage-payment timing. Rework and snagging should be recorded against the original job; otherwise the true cost of a weak estimate may be hidden in overheads.
Start with the profit basics
Alongside the industry KPIs above, every owner should check four headline figures each month:
- Total income for the month and year to date
- Total costs, split into direct costs and overheads
- Net profit and operating margin
- Lowest cash balance in the next 12 weeks, from a cash flow forecast
If net profit is falling while turnover rises, look at the cost KPIs first. If cash is tight while profit looks fine, look at unpaid invoices and debtor days.
An example month (illustrative figures)
Say a decorating business takes £5,500 in a month and spends £2,300 on the direct costs of delivering the work. Gross profit is £3,200, a gross margin of 58%. If last month the margin was several points higher on similar turnover, something has changed in prices, costs or the mix of work, and the KPIs above show where to look. These figures are illustrations only: use your own.
What to do when the numbers slip
- Pricing preparation properly and showing it on the quote
- Specialist work such as spraying and wallpaper
- Letting agent turnarounds for steady winter work
- Deposits on larger jobs to cover materials
Pick one action at a time, so you can see what made the difference. If you are asking what the business could pay you, read how much a painter and decorator earns in the UK.
How to review your KPIs every month
1. Update your records for the month: jobs, sales, costs and invoices. 2. Compare each KPI with last month and the same month last year, so seasonal swings do not mislead you. 3. Pick the one number that moved most in the wrong direction and find out why. 4. Decide one action for next month, such as a price change, a rota change or chasing a debtor. 5. Check the result at the next review.
Fifteen minutes a month on this routine is enough to catch most problems while they are still small.
Common mistakes with KPIs
Tracking too many numbers. Pick the handful that drive your profit and review them consistently.
Looking at one month in isolation. Trends matter more than single results.
Not acting on what you find. A KPI that never changes a decision is just a number.
Keeping figures in your head. Write them down, or let a spreadsheet calculate them, so nothing is guessed.
Run the numbers on your own business
The **Painter & Decorator Business Management System** tracks every job, cost, invoice and VAT return, and works out your profit, margin and key figures automatically on a one-page dashboard. It costs £15 once, with no subscription. For the full start-up walkthrough, read our guide on how to start a decorating business.
Frequently asked questions
What is the most important KPI for a decorating business? Gross margin, because it shows whether your prices cover the direct cost of each job. If it is wrong, growth only makes things worse.
Which KPIs should a new decorating business track first? Start with average job value, labour hours sold and effective day rate. They are quick to work out and show straight away whether your pricing and capacity are right.
Can KPIs help me set prices? Yes. If your margin or rate per job is below target, your prices are too low for your costs, however busy you are.
How often should I check my KPIs? Monthly for most figures, and weekly for cash and unpaid invoices.
Do I need software to track KPIs? No. A spreadsheet that calculates the figures from your records works well for most small businesses and avoids monthly fees.
What should I do if a KPI gets worse? Find the cause, decide one action, and check the effect next month. Price, volume and cost are almost always the levers.