Jon’s last video was all about the material price increases, making sure you don’t end up out of pocket by absorbing the price rises in your contracts. This series is all about your profit margins, what you should be allowing for when preparing quotations and how that translates into actual profit on the job. It’s something you really need to know to ensure you run a profitable business that will support your family and lifestyle.
How Much Margin Should Tradies Make?
Are you making good margins in your trades business?
In general, the net margin of a business should be 10% of revenue – that’s the rule of thumb.
But for builders, what you want and should have is a margin of at least 20%-30% and 30-40% for all other trades.
And whether you sit below or above 10% you need to make sure everybody gets a fair wage including you.
So, we’ll explain a little more about margins in this video.
How To Measure Your Margins
Are you measuring your margins properly?
How much margin do you make per month? If you’re a builder, I’d say it should be 20-30% and 30-40% (gross margin) for other trades. If you’re making less than that it means money is probably a bit tight for you. Or you’ve been measuring your margins the wrong way…
We’ll show you how to measure margins correctly in this video.
If you’d like to learn more you can:
- Book a 10-minute chat with Jon – Click Here
- Attend the next Tools Down Workshop and learn how to grow and scale properly. – Click Here
See what else Jon has to say about making your business more profitable, by reading his other articles! Search “Small Fish’ on the website, or click on this link – https://builderstalkgroup.com/small-fish-toolbox-tips-series-know-your-numbers/