Announcement

Collapse
No announcement yet.

How Much do Remodelers Make?

Collapse
X
  • Filter
  • Time
  • Show
Clear All
new posts

  • How Much do Remodelers Make?

    Findings from the recently released Remodelers’ Cost of Doing Business Study: 2017 Edition show that the net profit margin for the typical residential remodeler increased to 5.3% in 2015, up from 3.0% in 2011.

    Combining all sources, remodelers reported an average $1.8 million in revenue for 2015, of which $1.3 million (71.1%) went to pay for cost of sales items such as labor, material and subs. Subtracting these costs from revenue left a gross profit of roughly $500,000 – or 28.9% of revenue.

    Remodelers also spent an average of $420,000 in operating expenses (e.g. general and administrative expenses, marketing and finance expenses), thus ending fiscal 2015 with $95,000 in net profit: a 5.3% net profit margin.

    NAHB economist Rose Quint provides more analysis in this Eye on Housing blog post.

  • #2
    Originally posted by aptbldr View Post
    Findings from the recently released Remodelers’ Cost of Doing Business Study: 2017 Edition show that the net profit margin for the typical residential remodeler increased to 5.3% in 2015, up from 3.0% in 2011.

    Combining all sources, remodelers reported an average $1.8 million in revenue for 2015, of which $1.3 million (71.1%) went to pay for cost of sales items such as labor, material and subs. Subtracting these costs from revenue left a gross profit of roughly $500,000 – or 28.9% of revenue.

    Remodelers also spent an average of $420,000 in operating expenses (e.g. general and administrative expenses, marketing and finance expenses), thus ending fiscal 2015 with $95,000 in net profit: a 5.3% net profit margin.

    NAHB economist Rose Quint provides more analysis in this Eye on Housing blog post.
    My company consistently nets a minimum 10% profit. I don't take any jobs where the correct markup to achieve that net profit is not applied. This profit is after ALL business expenses plus owners salary has been paid.

    Comment


    • #3
      The NAHB has been doing these "studies" since the 70's (maybe earlier) for home builders. I have been paying attention to them since 1980, in total they are a good read on what builders make. They get financials from about 300-400 builders each year and tally the results, I've participated and sent in my financials. They break builders down into various categories, small, medium, large, custom, spec, with/without land, etc. I think they just started doing this same type of study for remodelers. What I've learned is a gross or net profit margin per job is a lot different than what it is on an annualized basis on total sales.

      Comment


      • #4
        Originally posted by Allan Edwards View Post
        The NAHB has been doing these "studies" since the 70's (maybe earlier) for home builders. I have been paying attention to them since 1980, in total they are a good read on what builders make. They get financials from about 300-400 builders each year and tally the results, I've participated and sent in my financials. They break builders down into various categories, small, medium, large, custom, spec, with/without land, etc. I think they just started doing this same type of study for remodelers. What I've learned is a gross or net profit margin per job is a lot different than what it is on an annualized basis on total sales.
        Well, thats not true for us. Ive found that this is the beauty of using a simple markup system. I set our markup, stick to our budget and at the end of the year I have a nice 10% net profit sitting in the bank, every year.

        Comment

        Working...
        X