Most contractors watch revenue. The
Murugeshwari S.
Most contractors watch revenue. The smart ones watch cost percentage and profit margin on every job.
Here is a simple example:
Contract amount: $100,000
Total job cost (labor, materials, subs, equipment, site costs): $85,000
Profit: $15,000
That means:
Cost percentage = $85,000 ÷ $100,000 = 85%
Profit margin = $15,000 ÷ $100,000 = 15%
On paper, 15% looks okay.
But in construction, small mistakes can easily eat that margin:
Extra labor hours not booked to the job
Material wastage and rework
Subcontractor change orders not billed correctly
Site overheads missing in the budget
If margin drops from 15% to 5%,
profit becomes only $5,000 on a $100,000 job.
Same revenue.
Very different result.
That’s why clean job costing and regular review of cost percentage and profit margin are more important than just looking at total sales.
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Posted Jul 21, 2026
Most contractors watch revenue. The smart ones watch cost percentage and profit margin on every job. Here is a simple example: Contract amount: $100,000 Tota...
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