> ## Documentation Index
> Fetch the complete documentation index at: https://dronelist.io/docs/llms.txt
> Use this file to discover all available pages before exploring further.
# Profitability
> Analyze per-project profitability and set rate targets for your drone business
# Profitability
Know whether a job is worth taking before you commit. The profitability module calculates your true profit per hour on every [Project](/docs/features/projects) by factoring in revenue, expenses, and time — then tells you whether it meets your target rate.
## The formula
At its core, profitability is:
```
Profit = Revenue - Costs
```
Where costs break down into:
| Cost component | What it includes |
| ------------------- | -------------------------------------------------------------------------------------------------------------- |
| **Drive costs** | Mileage to and from the job site (round trip, using your configured mileage rate) |
| **Equipment costs** | Depreciation and wear based on flight hours and your equipment cost per hour |
| **Overhead** | Allocated percentage of revenue covering insurance, software, licenses, marketing, and other business expenses |
The key metric is **profit per hour** — your total profit divided by total working hours (drive time + flight + processing + admin). This is compared against your **target hourly rate** to give you a clear accept/review/decline recommendation.
***
## Rate settings
Configure your rates in **Services > Pricing**. These settings are organization-level and apply to all profitability calculations.
| Setting | Description | Default |
| --------------------------- | ---------------------------------------------------- | -------------------- |
| **Target hourly profit** | The minimum profit per hour you want to earn | Your configured rate |
| **Mileage rate** | Cost per mile for travel to job sites | IRS standard rate |
| **Overhead percentage** | Percentage of revenue allocated to business overhead | 20% |
| **Equipment cost per hour** | Hourly cost of equipment depreciation and wear | \$15/hr |
### Time estimates
For each service type, you can set default time estimates:
| Time category | What it covers |
| ---------------------- | --------------------------------------------------- |
| **Flight time** | Hours in the air on site |
| **Editing/processing** | Post-flight data processing, photo editing, mapping |
| **Report generation** | Creating deliverables, reports, and documentation |
| **Admin** | Communication, scheduling, and project management |
These defaults are used when calculating profitability but can be overridden per project.
***
## Cost modes
The profitability calculator supports two modes for determining overhead and equipment costs:
### Estimated mode (default)
Uses the fixed percentages from your rate settings. Good when you are starting out or don't have a full year of expense data yet.
### Actuals mode
Pulls real data from your [Expenses](/docs/features/expenses) to calculate:
* **Overhead percentage** — Total overhead expenses divided by annual revenue
* **Equipment cost per hour** — Total equipment expenses divided by estimated annual flight hours (200 hrs)
The system automatically falls back to estimated mode if there isn't enough expense or revenue data for a reliable calculation.
Actuals mode requires both expense data and sufficient revenue data (from [Proposals](/docs/features/proposals) and deals) for the current year. If either is missing, you'll see a message explaining what's needed.
***
## Per-project profitability
Open any [Project](/docs/features/projects) to run a profitability analysis. The calculator factors in:
* **Quote amount** — The agreed price for the project
* **Distance** — Miles to the job site (calculates round-trip drive cost)
* **Drive time** — Time spent traveling
* **Service type** — Determines default time estimates
* **Time overrides** — Adjust flight, processing, report, and admin hours for this specific job
### The result
| Metric | What it tells you |
| ------------------- | ---------------------------------------------- |
| **Revenue** | The quoted price |
| **Total costs** | Drive + equipment + overhead |
| **Profit** | Revenue minus total costs |
| **Profit margin** | Profit as a percentage of revenue |
| **Profit per hour** | Your effective hourly rate on this job |
| **Meets target** | Whether profit per hour meets your target rate |
### Recommendations
Based on your profit per hour vs. target rate, the calculator gives one of three recommendations:
| Recommendation | Condition | Action |
| -------------- | -------------------------------------- | ------------------------------------------------ |
| **Accept** | Profit/hr meets or exceeds your target | Take the job |
| **Review** | Profit/hr is 80-100% of your target | Consider negotiating a higher price |
| **Decline** | Profit/hr is below 80% of your target | The suggested price to meet your target is shown |
***
## Margin health
Profit margins are categorized for quick visual assessment:
| Status | Margin range |
| ------------- | ------------ |
| **Loss** | Below 0% |
| **Low** | 0% - 15% |
| **Healthy** | 15% - 30% |
| **Excellent** | Above 30% |
***
## How expenses flow in
When using actuals mode, the profitability engine aggregates your [Expenses](/docs/features/expenses) by category:
Categories like Software, Insurance, Accounting, Marketing, Licenses, Facilities, Training, Permits, Data & Storage, and general Overhead are totaled for the year.
Equipment purchases, Maintenance, and Supplies are totaled separately.
Total overhead divided by annual revenue gives the actual overhead percentage used in calculations.
Total equipment expenses divided by estimated annual flight hours (200 hrs) gives the per-hour equipment cost.
***
## Dashboard integration
Profitability data surfaces on your [Dashboard](/docs/features/dashboard) in the financials section, giving you a high-level view of how your business is performing without navigating into individual projects.
***
## Tips
If you're new to dronelist, use estimated mode with reasonable defaults. Once you have a full year of [Expenses](/docs/features/expenses) logged, switch to actuals for data-driven calculations.
Your target rate should cover your desired income plus taxes, benefits, and business growth. Research industry benchmarks for your service types.
Default time estimates work for standard jobs, but complex projects may need more processing or admin time. Use per-project overrides to get an accurate picture.
If you consistently see **Review** or **Decline** recommendations, it may be time to raise your service prices in [Services & Pricing](/docs/features/services-and-pricing). The suggested prices in decline recommendations can guide your adjustments.
In actuals mode, revenue is calculated from accepted proposals and deals. Make sure you're creating [Invoices](/docs/features/invoicing) through the platform so revenue data stays complete.