Knowing your profit margins is key to running a successful construction business. A Construction Profit Margin Calculator helps you figure out exactly how much you're making on each project so you can price jobs right and keep your business profitable.
How to Calculate Profit Margin
- Total Revenue – Add up all the money coming in from the project.
- Total Costs – Include materials, labor, equipment, subcontractor fees, and overhead.
- Net Profit – Subtract your total costs from your total revenue.
- Profit Margin – Divide net profit by total revenue, then multiply by 100 to get the percentage.
Formula
Profit Margin (%) = (Net Profit / Total Revenue)×100
Example
If a project brings in $500,000 and costs $400,000:
- Net Profit: $500,000 - $400,000 = $100,000
- Profit Margin: ($100,000 ÷ $500,000) × 100 = 20%
What’s a Good Profit Margin in Construction?
Margins vary by project type and location, but most construction businesses aim for 10-20%. The higher your margin, the better protected you are from unexpected costs.
Why Use a Profit Margin Calculator?
- Know where you stand – See exactly how much you’re making on each project.
- Avoid underbidding – Set prices that actually make sense for your business.
- Plan ahead – Adjust budgets and expenses before it's too late.
A profit margin calculator gives you a clear picture of your financials so you can make smarter business decisions and keep your projects on track.
