Construction gross profit: a field guide for small businesses.
Gross profit is the space between performing the work and operating the company.
01
Separate direct cost from overhead
Labor on the job, materials, subcontractors, and equipment are direct costs. Office payroll, estimating time, insurance, rent, and software are usually overhead.
02
Watch gross margin, not just dollars
A job can produce a large gross-profit dollar amount and still be underperforming if its margin is too thin for the overhead it carries.
03
Use actuals to improve estimates
Compare estimated and actual labor, waste, subcontractor invoices, and equipment. The gap is the next improvement to make.
