Minimum Bottom Line Profit Should Average 9.4%!
For Trades & Subcontractors, at Least 11%
After Income Taxes Are Paid!
I’m surprised at how many visitors to this section of the website are oriented to what is a fair profit for a contractor. I’m not referring to the industrial or the commercial contractor; I’m referring to your standard residential contractor. To resolve this, I’m going to approach this from two perspectives. The first is the homeowner’s perception and then the reality. Both sides of this equation should learn from this, IT COSTS A LOT MORE THAN YOU THINK TO BUILD A HOUSE!
Contractor’s Profitability – Homeowner’s Perspective
To the homeowner, this is simple. What is the cost of the material, the cost to install and yes, you are entitled to a fair profit. For the average homeowner, he believes that you should have a profit of 9 – 15%. I can accept this as a fair profit. The question is ‘What are we multiplying as the base to determine this profit’?