Bookkeeper here who works with a lot of home service contractors – this comes up constantly. The 50% target is solid in theory, but what I see most often is that owners are calculating gross profit inconsistently. Labor burden, materials markups, sub costs – all of it gets handled differently job to job, so the number they think is 35% might actually be 28% when you account for everything properly.
The big job problem is real too. Larger projects tend to compress margins just from the sheer complexity and the inefficiencies that come with them. A 35% GP on $120k is still a great outcome if your overhead is dialed in and your net is healthy.
The more important question is usually what’s left after overhead. Gross profit is the starting line, not the finish line.
