A full order book doesn't guarantee a profitable year. Plenty of busy remodelers are running jobs at breakeven or worse without realizing it, because the price they quote is built around "what the market will pay" rather than a real cost-plus structure.
Where a typical job's price should actually go
On a well-run remodeling job, the price generally breaks down close to:
- Materials: ~45% — cabinets, countertops, fixtures, finishes
- Labor: ~30% — your crew and subcontractors
- Overhead: ~15% — insurance, vehicles, office, marketing, admin time
- Net profit: ~10% — what's actually left for the business
When a quote gets discounted to win the job — which is usually where the profit margin absorbs the cut — that 10% is often the first, and sometimes only, line item to shrink. A 10-point discount off the total price can wipe out the entire profit margin on the job.
The overhead most contractors underestimate
Overhead isn't just rent and insurance. It includes the owner's own time spent estimating jobs that don't close, the office admin handling scheduling and invoicing, and marketing spend — all of which have to be recovered across the jobs that do close. Contractors who price only against materials and labor, without loading overhead into the number, are effectively donating their own time and marketing spend to every job.
Where discounting actually costs the most
Discounting to win a job with a homeowner who was going to hire someone regardless costs real margin for no real gain — the job was likely to close at full price anyway. The more expensive discount is the invisible one: pricing every job slightly low across the board to "stay competitive," which quietly erodes margin on 100% of jobs instead of the few where a discount might have actually mattered.
Want this run for your kitchen & bath remodeling business?
We run the campaign, build the infrastructure, and guarantee the leads it produces.
Book a Call →