Do you know your gross margin or gross profit? Compare it to our OutRank by Rogers Salary Survey results right hereCanadian Contractor Business
Click on this story to see a chart showing Gross Margins by various sizes of residential renovation jobs and custom builds across the country
If you are a subscriber to Canadian Contractor, print edition, you have a very useful issue in the mail to you right now: Our 6th annual Salary Survey issue sponsored by OutRank by Rogers. (If you’re NOT a subscriber please click on SUBSCRIBE at the bottom of our website. Our magazine is free to working contractors.)
In our salary survey, we asked you and your fellow contractors more than 30 questions about profits, markups, expenses, labour, business conditions, etc.
Here’s a question we asked about gross margins…
The bulk of your gross margins are falling in the 20% to 30% range on jobs under $50,000.
Gross margin is, of course, your percentage of gross profit in a job (amount billed minus direct job costs such as materials and labour, divided by amount billed). We asked you to tell us what gross margin you would estimate to make from four different sizes of job (from “below $10,000” up to “over 100,000”). More than half of your reported gross margins fall in the 20% to 30% range for jobs of various sizes. As for the 2% to 8% of you estimating to make ZERO gross margin on various-sized jobs (in the first column) we just have to assume you have another source of income, somewhere.
When estimating jobs in the following ranges, how much is your gross margin?
Gross Margin 0% 10% 20% 30% 40% 50%+
Jobs below $10,000 2% 14% 30% 26% 18% 10%
$10,001 – $50,000 4% 18% 36% 28% 11% 4%
$50,001 – $100,000 7% 22% 43% 20% 6% 2%
Over $100,001 8% 31% 39% 15% 5% 2%