May 1, 2026
What is the Profit Detective Diagnostic? The Profit Detective Diagnostic is a structured 2–3 week engagement that examines a restoration company’s financials, job costing, KPIs, operational systems, and leadership team to identify hidden margin leaks, build a prioritized action list, and quantify the gap between current and achievable profitability.
A financial audit looks at the numbers. A diagnostic looks at why the numbers are what they are. The fundamental insight after 36 years and 150+ companies: every restoration company that’s underperforming is underperforming for a small number of identifiable reasons that almost always live in the same handful of places.
Domain 1: Financial reality. 24–36 months of monthly P&L, balance sheet, AR aging, job cost reports for the last 30–50 jobs, year-end financials. Looking for gross margin trend by service line, overhead growth relative to revenue, owner compensation vs. contribution, working capital efficiency, hidden labor costs, and subcontractor leakage.
Domain 2: Job-level economics. This is where most of the real money is hiding. Pull 30–50 jobs and run a structured review: estimated vs. actual gross margin, scope vs. actual scope, supplements not filed, equipment days not charged, materials without a PO, TPA adjustments and what they cost. In most engagements I find 8–15 points of recoverable gross margin in this domain alone.
Domain 3: Operating system and KPIs. Is there a weekly KPI cadence? Are KPIs the right ones? Is there a clear org chart and does it match how decisions actually get made? Are job costing reviews happening systematically? This is where structural issues live.
Domain 4: People and leadership. One-on-one conversations with the owner, operations manager, lead estimator, office manager, project managers, and frontline crew chiefs. Looking for clarity of strategy, how decisions actually get made, who owns what, and what everybody is pretending not to know. The people side surfaces conversations that have been postponed — promoted, coached, or exited.
Domain 5: Owner role and bandwidth. Walk me through a typical week hour by hour. Then sort every activity into four buckets: owner work (only you can do it), executive work (a COO should do it), manager work (a manager should do it), and doing the work (the team should do it). The pattern is almost universal: owners are spending 70%+ of their time in the bottom two buckets.
A written diagnostic document with three sections: Findings (what’s actually happening, quantified where possible), The Gap (specific dollar estimates of the difference between current and achievable performance — typically $100K to $700K of annual upside depending on company size), and The Action List (10–15 prioritized actions with the top three recommended for immediate execution).
Most engagements run 2–3 weeks from start to debrief. That includes the financial deep-dive, job cost analysis, on-site or virtual interviews, document review, and the written deliverable.
Yes. The diagnostic requires access to the P&L, balance sheet, AR aging, and a sample of recent job cost reports. A mutual NDA is signed at the start of every engagement and all documents are returned or destroyed at the owner’s preference.
Absolutely. About 40% of diagnostic clients implement on their own after the diagnostic, and that’s a perfectly good outcome. The diagnostic stands on its own.
Mike McCabe is The Profit Detective — Master Cleaner, Master Restorer, 36-year restoration industry veteran, and Fractional Operations Manager at Floodlight Consulting Group.
Most engagements pay for themselves within the first week.