Personal Introduction
From 2008 to 2014, I worked closely with Prakash Parab at Dulsco: first as a customer, later as a colleague in the role of Commercial Director, and subsequently as a senior-level freelance consultant. Our shared background is in waste management. The article series presented here, however, deals with the staffing business.
Summary of the Original
In Chapter 9, Prakash Parab explains why increasing revenues and larger workforces alone do not guarantee financial success. What matters are the daily decisions that either secure a margin or gradually erode it.
He identifies actual staff utilization, consistent pricing, major operating costs, employee retention, and the ratio between growth and administrative overhead as key influencing factors. Unproductive staff must be factored into the utilization analysis.
Margin losses are caused, among other things, by overly low offer prices, uncontrolled overtime and idle time, as well as avoidable rework. Customers whose support requires a disproportionate amount of management time can also impair profitability.
Parab recommends tracking the gross margin contribution per person employed per month in a differentiated manner. For new contracts, binding minimum margins and documented approvals in the event of falling below these margins should apply. This makes profitability a concrete basis for decision-making even before the contract is signed.
Jan Wilhelm's Own Practical Assessment
For service companies, this implies: In addition to revenue, check the actual effort per order.
A hypothetical example: A service contract grows, while additional trips, last-minute staff changes, and invoice corrections also increase. Without separate tracking, these additional costs remain hidden in general cost centers.
A monthly order analysis should therefore bring together agreed services, additional effort, and the remaining contribution to profit. Deviations require an accountable person and a concrete measure.
ELB Services helps combine commercial analysis and operational processes so that such developments become visible early on.
Original by Prakash Parab:
Article 9: Profitability: Where Margins Are Made and Lost
Website and series overview:
www.prakashparab.com
Original read on October 22, 2026. Independent editorial summary and recommendation by Jan Wilhelm; no authorized translation or joint publication.