Is a 10% net margin good?

It's a reasonable target for many contractors; strong operators reach the mid-teens.

Why is my margin lower than expected?

Usually underestimated labor hours, unbilled change orders, or markup that didn't fully cover overhead.

How do I raise margin?

Tighten estimates, bill every change, cut waste, and reprice work that consistently underperforms.

Business

What is a good profit margin for contractors?

Quick answer

Residential contractors commonly target gross margins of 25–40% per job and net margins of 8–15% after overhead. The right target depends on your trade, risk and volume — the key is knowing your number and pricing to hit it consistently.

Definition

Profit margin is profit as a percentage of price. Gross margin is per-job profit before overhead; net margin is what's left after all business costs.

Step by step

1Separate per-job cost from company overhead.
2Set a gross margin target that covers overhead and profit.
3Price each job with price = cost ÷ (1 − margin).
4Track net margin monthly to see what you actually keep.

Key takeaways

Gross margin per job funds your overhead and profit.
Net margin is the real measure of the business.
Price to your target margin, then verify it after the job.

Frequently asked questions

Handy calculators

Profit Margin Calculator

See your true margin — or set price to hit a target margin.

Open

Markup Calculator

Turn job cost into a selling price at your target markup.

Open

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