Running an appliance service or retail business is about much more than fixing machines or selling products. Every job you take on carries real costs that go far beyond parts and labor. Fuel, insurance, payroll taxes, rent, software, phones, trucks, benefits, training, advertising, office staff, and even your own salary all factor into what it truly costs to operate your business.

This is what we mean by Cost of Doing Business, often referred to as CODB.

Many companies set pricing based on what competitors charge or what feels reasonable to the customer. The problem is that feelings do not pay bills. Without understanding your CODB, it is very easy to stay busy while slowly losing money.

What Is Cost of Doing Business?

Your Cost of Doing Business is the total cost required to keep your business operating, spread across the work you perform. It helps answer critical questions such as:

• What does it really cost to put a truck on the road?
• How much revenue does each technician need to generate?
• Are your labor rates covering overhead or just payroll?
• Can you afford to hire, expand, or invest in new equipment?

CODB is not a one-size-fits-all number, and it is not something you calculate once and forget. Costs change at different speeds for different businesses. Fuel prices may spike suddenly, insurance may renew annually, wages may rise gradually, and software or benefit costs may be added as you grow.

The important thing is not how often you update your CODB, but that you revisit it intentionally and adjust when meaningful changes occur.

Why Relying Only on Year-End Numbers Can Be Risky

Many business owners look at their numbers only at tax time or after the year has already closed. While that information is useful, it is backward-looking. By then, pricing decisions have already been made and margins may already be eroded.

PSA has long emphasized that CODB should be treated as an active management tool, not just an accounting exercise. Businesses that monitor their costs as conditions change are better positioned to protect profitability and make informed decisions before small issues turn into big problems.

Busy Does Not Always Mean Profitable

A packed schedule and growing revenue can feel like success, but they do not guarantee profitability. If pricing is based on assumptions instead of actual costs, every additional job can quietly increase losses.

Understanding CODB gives you clarity. It allows you to price with confidence, explain your value clearly to customers, and make decisions based on data instead of stress or guesswork.

Why PSA Members Have an Advantage

Calculating CODB accurately can be overwhelming, especially without the right structure. That is why PSA provides member-only Cost of Doing Business tools designed specifically for service companies.

• Capture all relevant expense categories
• Understand true operating costs
• Evaluate pricing with real numbers
• Adjust strategy as your business evolves

The Bottom Line

Understanding your Cost of Doing Business is not about charging more arbitrarily. It is about charging what is necessary to run a sustainable business, support your employees, and continue serving customers for years to come.

If you do not know your CODB, you are guessing. And guessing is expensive.

PSA members gain access to the tools, education, and support needed to calculate CODB accurately and apply it in a way that fits their business, on their timeline. Knowing your cost of doing business is not about perfection. It is about control.