Why Understanding Markup, Margin and Overhead is Critical for Restoration Success

On this episode of Ask The Expert, we’re diving into the nitty gritty of markup vs margin and overhead and profit. Our special guest, Ben Justesen an Enterprise Solutions Consultant at DocuSketch, is no stranger to the importance of financial literacy and the crucial role it plays in business success for restoration professionals. Ben and Kayla break down the critical difference between markup and margin, an often-misunderstood concept that can make or break profitability in restoration, and they also share practical strategies for improving financial literacy and company culture.

Ben has been in the industry for over 20 years where he started at Just Right Cleaning & Construction (JRCC), where he worked in various roles of his family’s business. He is a seasoned restoration industry executive with experience spanning field operations, business ownership and national leadership roles. He is recognized in our industry as one of the premier experts in Xactimate and restoration pricing strategy.

Key conversation highlights include:

The difference between markup and margin and why it's an important but often misunderstood concept in the restoration industry.
- Markup is a percentage of cost, while margin is a percentage of revenue.
Misunderstanding markup vs. margin can significantly impact a restoration contractor's profitability.
The industry's use of "overhead and profit" is confusing and can lead to potential legal issues.
Financial literacy is not prioritized enough in the restoration industry.
Industry leaders and educators need to focus more on teaching financial management.
Accounting software tutorials and estimating training can help restoration contractors better understand and manage their financial health.
Estimating software can be unreliable if not used properly.
- Conducting a thorough review of your estimate components can help identify missed items and increase your profitability.
Developing an annual budget with contingency plans, and sharing financial information with the team, can improve a company's financial health and culture.

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Kayla McGowan is the SPAR Partner Manager for PuroClean, where she manages and strengthens the company’s vendor partnership ecosystem. In her role, she serves as a key liaison between PuroClean, approved vendor partners, internal stakeholders, and Franchise Owners, helping connect the network with trusted tools, services, and products that support operational success.

With more than 10 years of experience in marketing and communications within the restoration and cleaning industry, Kayla has built her career around connecting people, ideas, and resources that move the industry forward. She is the former Editor-in-Chief of Restoration & Remediation (R&R) Magazine and continues to contribute to R&R as a writer, bringing her industry knowledge and perspective to its audience.

Kayla holds a B.S. in Criminal Science and an M.S. in Public Safety and Emergency Management from Grand Canyon University. She also serves as Co-Chair of the Restoration Industry Association’s Marketing Committee.

Her industry credentials include Microbial Warrior®️, Certified Forensic Operator®️, and High Risk/High Level Decontamination Specialist™️. Passionate about elevating the restoration industry and the professionals within it, Kayla enjoys building meaningful relationships, sharing knowledge, and creating opportunities for collaboration. Outside of work, she is a food lover who enjoys spending time with her family and being outdoors.