Findings from the recently released Remodelers’ Cost of Doing Business Study: 2017 Edition show that the net profit margin for the typical residential remodeler increased to 5.3% in 2015, up from 3.0% in 2011.
Combining all sources, remodelers reported an average $1.8 million in revenue for 2015, of which $1.3 million (71.1%) went to pay for cost of sales items such as labor, material, and subs. Subtracting these costs from revenue left a gross profit of roughly half a million dollars – or 28.9% of revenue.
Remodelers also spent an average of $420,000 in operating expenses (e.g. general and administrative expenses, marketing and finance expenses), thus ending fiscal year 2015 with $95,000 in net profit – a 5.3% net profit margin.
Remodelers’ gross and net profit margins in 2015 were higher than in 2003 and 2011, the last two times similar surveys were conducted.
In 2015, residential remodelers reported total assets averaging $414,000 on their balance sheets. About $279,000 (67.5%) of that was backed up by liabilities and the remaining $135,000 (32.5%) was held as owner’s equity.
The limited history available for this series shows that remodelers’ average assets in 2015 were higher than in both 2003 and 2011. In the meantime, the share of assets backed up by liabilities went from 62.5% in 2003 to 67.5% in 2015.
Similar results are available for single-family builders in a previous post.