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.
Tags: remodelers, remodeling
Way too low of profit margin.
I agree with Allen that profit margin is to low.
Operating expense average seems way too high as well.
Cost of Sales are too high when compared to Total Revenue.
I also agree the profit margin is too low.
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.
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.