You think you're making 25% margin.
Are you?
Most contractors confuse markup with gross margin. A 30% markup gives you a 23% gross margin — not 30%. On a $90,000 renovation, that's $6,300 less profit than you thought. Find out your real numbers below.
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Post-Job Margin Analysis
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Analysis Results
✅ Strong margin — top quartile contractor
What's a Good Margin for Remodeling Contractors?
These benchmarks come from NAHB and NARI studies on residential remodeling contractors. Gross margin must cover your overhead first — only what's left is actual profit.
| Metric | Danger Zone | Average | Top Quartile |
|---|---|---|---|
| Gross Margin | <20% | 20–30% | 30–40% |
| Net Margin (after overhead) | <5% | 5–10% | 10–15% |
| Overhead as % of Revenue | >25% | 15–22% | <15% |
⚠️ The overhead trap most contractors miss
If your gross margin is 28% but your overhead is 22% of revenue, your net margin is only 6%. That means on a $400,000 year in revenue, you're taking home $24,000 before tax. That's below minimum wage for the hours most contractors work.
Why Markup and Margin Are NOT The Same Number
Here's the mistake that silently costs contractors thousands per job:
To hit a true 30% gross margin, you need to divide your cost by 0.70 — not multiply by 1.30.
On a $42,000 job: $42,000 ÷ 0.70 = $60,000 invoice. That's the difference between 30% markup and 30% margin.
→ Use the Markup vs Margin converter to get the right number for your next bid
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