What's Standard Gross Profit for Your Industry?

Question

I once listened to Tom Reber preach about 50% gross profit and how if you aren't aiming for that, you are going to hurt yourself short/ longer term. He was basically saying, for every dollar you make, you need to make two. This has been super impactful for me and my business but I'm noticing on my really big projects, it's so hard to keep that. I have one $120k exterior BBQ that has definitely had some inefficiencies but we are probably looking at 35% end of day. But that's 35% of a large $$ so that is kind of ok.

For those of you who do a good job tracking this (btw Jobber's gross profit calculator is objectively amazing for this btw)- what is your gross profit and what do you usually shoot for?

expertbookkeepr · Answer

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.

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What's Standard Gross Profit for Your Industry?

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