How Much do Remodelers Make?

Filed in Business Management, Remodelers by on March 7, 2017 7 Comments

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.

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Comments (7)

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  1. Allen says:

    Way too low of profit margin.

  2. Bob Bailey says:

    I agree with Allen that profit margin is to low.

  3. Gary says:

    Operating expense average seems way too high as well.

  4. Cost of Sales are too high when compared to Total Revenue.

  5. I also agree the profit margin is too low.

    • NAHB Now says:

      Thanks for all these comments. Operating expenses in the study include the 5.5% of revenue spent on owner’s compensation. Adding this to the 5.3% net profit margin yields a 10.8% combined measure of profitability.

  6. Jim says:

    Those numbers have proven to be accurate in our business.
    Our best year so far was a 6% net profit.
    Thant did include owner compensation.

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