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Construction Programs & Results Inc

We Like to See The Good Guys Win!

Gross Profit for Remodeling

by Michael Stone

If I'm a remodeler making a 44% gross profit, I'm doing great, right?

It depends.

Your gross profit means nothing if your sales will not support your overhead expense. If you are doing 1.2 million in annual sales, have three employees and make 44% G.P., yes you are probably doing great.

If you are doing $305,000 annual sales with five employees, you are in a world of hurt.

It is far better to watch the graphs in the Markup and Profit book rather than the bottom line on your P & L. Those two graphs will tell you almost to the dollar where you should be in sales to support your overhead.

Don't get caught up in the numbers game without understanding what your numbers mean. Make sure the numbers you generate are right for you and your business. What works for your buddy might not work for you.

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