Bizgrowth Channel — text status

Sometimes a service business doesn’t need more sales. It needs to make more from the sales it already has. One number to watch is your Labor Efficiency Ratio (LER): gross profit divided by the labor cost to do the work. $100,000 in gross profit ÷ $40,000 in labor = 2.5 LER. If your LER is too low, look at pricing, payroll, and efficiency. Before chasing more sales, make sure your current sales are profitable enough.