Margin variance measures how widely your job margins scatter around their average. Lower is better.
Why an average alone misleads
Two businesses can both average 25% margin. One earns close to 25% on nearly every job. The other alternates between 45% and 5%.
They are not the same business, and only one of them can quote with confidence.
High variance means the average is a statistical artefact rather than a description of anything that actually happens. Pricing the next job at the average is then closer to a guess than to a decision.
What causes it
Inconsistent estimating. The same work quoted differently depending on who quoted it, how busy the week was, or how the customer seemed.
Unbilled change orders. Extras absorbed on some jobs and charged on others, which produces exactly this pattern.
Incomplete job costing. Some jobs carrying their full labour and materials and others not. This one is the most common and the most misleading, because it manufactures variance that does not exist in reality — half the spread is measurement error.
Genuinely different work under one job type, which is a categorisation problem rather than a pricing one.
Where to start
Check the costing before concluding anything about pricing. If labour is attached to some jobs and not others, the variance is telling you about your records rather than your business, and fixing the pricing would be solving the wrong problem.
Once costing is consistent, the outliers are the finding. The worst jobs usually share something — a customer, a job type, a crew, a season — and that shared thing is more actionable than the number.