| Trade | Gross Margin | Net Margin |
|---|---|---|
| General Contracting | 20-30% | 5-10% |
| Electrical | 30-40% | 8-15% |
| Plumbing | 28-38% | 8-14% |
| HVAC | 30-42% | 10-16% |
| Roofing | 25-35% | 6-12% |
| Concrete | 25-35% | 6-12% |
| Landscaping | 35-50% | 10-18% |
A healthy profit margin for contractors is typically 8-15% net profit after all expenses. Gross margins (before overhead) typically range from 25-45% depending on the trade. Specialty trades like electrical and HVAC tend toward higher margins than general contracting.
Gross margin is your profit after subtracting direct job costs (materials + labor). Net margin is your profit after all expenses including overhead, insurance, office costs, and taxes. A contractor might have a 35% gross margin but only a 10% net margin.
Improve margins by: (1) accurately estimating jobs to avoid cost overruns, (2) reducing material waste, (3) improving labor productivity, (4) negotiating better supplier pricing, (5) reducing overhead costs, and (6) targeting higher-value projects.
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