Episode
38
Thu, 01 Oct 2026 12:05:00 +0000
A cabinet shop can have plenty of work, a full production schedule, employees staying busy, and millions of dollars in sales and still struggle to produce enough profit.
That's because revenue and profit aren't the same thing.
Understanding where the money goes is one of the most important jobs of a cabinet shop owner. And sometimes the biggest problem isn't a lack of sales. It's not knowing what your jobs are actually costing you.
One of the first numbers cabinet shop owners need to understand is gross profit.
Gross profit gives you a picture of what remains after the direct costs associated with producing your work. Net profit tells another part of the story: what's actually left after the broader costs of running the business.
That distinction matters.
A shop owner can look at sales and feel like the business is doing well while seeing very little money left at the end.
That's when you need to dig deeper.
One of the most valuable tools for identifying profit problems is an end-of-job report.
Instead of simply finishing a job and moving on to the next one, look backward.
What did the job actually cost?
How did the shop perform?
What happened during delivery?
What happened during installation?
Were there callbacks or punch-list trips?
How much additional labor and travel were required?
Breaking jobs into categories makes it easier to see patterns that might otherwise remain hidden.
Pete Fico experienced this firsthand while running his cabinet company.
By analyzing completed jobs more closely, he was able to identify areas where profitability was being lost.
One example was installation.
A forgotten item or something that needed to be remade might require another trip to the customer's home. On paper, that could look like an extra hour of travel.
In reality, it's rarely just an hour.
There's loading, driving, traffic, parking, unloading, returning to the shop, and the inevitable interruptions that happen along the way.
If that additional work wasn't accounted for in the price of the job, the business absorbs the cost.
Repeat that across dozens of jobs and you've got a serious profit leak.
Pete's company began looking at jobs according to geographic “zones” based on their distance from the shop.
That helped reveal another important reality: two seemingly similar cabinet jobs could have very different costs depending on where they were installed.
His company operated in central Pennsylvania but also traveled into markets such as New York City and Long Island.
Long drives were only part of the challenge.
A truck and trailer had to deal with traffic, tunnels, narrow streets, and parking. Even smaller cities could create logistical challenges that added time and cost.
Once those patterns became visible, the company could adjust pricing accordingly.
That's the power of tracking.
Another number discussed in the episode is sales conversion rate.
How many leads or estimates become actual customers?
Pete uses roughly 35% as an important reference point in his approach. If you're closing significantly more work, it can be worth investigating whether your prices are too low. If you're closing significantly less, pricing could be one explanation, but your sales process may also need attention.
The bigger principle is simple:
Don't look at your numbers independently.
Look at how they relate to each other.
Gross profit, job performance, pricing, conversion rates, installation costs, and other metrics collectively tell the story of your business.
There's another trap business owners can fall into.
They track everything.
They build spreadsheets.
They collect numbers.
And then they don't do anything with them.
Data only becomes useful when it changes a decision.
If your reports show that a particular type of installation consistently loses money, something needs to change.
If certain locations cost substantially more to serve, your pricing needs to account for that.
If your gross profit isn't where it needs to be, you need to understand why.
The purpose of tracking isn't to create prettier spreadsheets.
It's to make better decisions.
For many cabinet shop owners, raising prices feels dangerous.
Will customers say no?
Will competitors undercut you?
Will sales disappear?
But as Pete explains, one of the biggest obstacles to raising prices can exist in the owner's own head.
If your current prices aren't producing a healthy business, keeping those prices simply because customers accept them doesn't solve the underlying problem.
Your business has to generate enough money to serve customers, employ a team, invest in equipment, deal with mistakes and unexpected costs, and provide a return to the owner.
Pete grew his cabinet business from just over $3 million to nearly $11 million in sales.
But the bigger lesson isn't simply to grow revenue.
It's to understand the business behind the revenue.
Track completed jobs.
Understand your gross and net profit.
Watch your installation costs.
Measure your conversion rates.
Identify where money leaks out.
And, most importantly, use what you learn to change the way you operate.
Because the goal isn't simply to have a busy cabinet shop.
The goal is to have a profitable one.
The blog stays intentionally close to what Pete and Dominic actually discuss rather than adding unsupported industry benchmarks.
More about Pete Ficco: LinkedIn | Company's website| Company's Linkedin
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