Protect Your Profit: How to Track and Increase Margins in Your Home Improvement Business

Many business media outlets today recognize the “biggest and the best” by top-line revenue – whether it’s our friends at Qualified Remodeler who track the home improvement industry’s Top 500, or the Inc. 5000, which tracks growth by top-line revenue. 

But at the end of the day, if the companies on those lists aren’t making any profit, their owners and leadership are no better off than smaller companies with larger profit margins. In fact, they’re typically dealing with bigger headaches and having less to show for it. 

Healthy profit margins aren’t just a financial win, they’re a leadership necessity. They create stability, fuel growth, and give your team the tools and resources to accomplish your company’s goals. 
In this article, we’ll walk through the essential practices for tracking and improving profit margin, from pricing strategy to production tracking to team alignment. Whether you're trying to stop the leaks or scale your success, it all starts with understanding the numbers that drive your business.

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Margin Blind Spots: What You’re Missing Might Be Costing You

Too many contractors focus on gross revenue without knowing their gross profit margin. But without that margin, you cannot grow your business, add team members, or increase salaries–including your own. 

If you’re not tracking profit, you’re likely bleeding cash in places you don’t even see. The key is to look at job-level profitability and not just your monthly totals. 

With each and every job, you need to be tracking:

• Did we price this job correctly?
• Did production stick to the estimated hours?
• Were material costs in line with the bid?

Track your actual job performance against your estimates, and you’ll find opportunities to make up or protect your profit. 

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Pricing Jobs for Profit 

If you’re not building margin into your pricing model from the start, you’re already behind.

Ask yourself: Are you setting your estimates up correctly? Are you factoring in real labor costs, overhead, and slippage? If your home improvement sales team is still guessing or using outdated templates, your business is at risk.

Using a contractor estimating software can automate this process and calculate your gross profit margin in real-time. That means:

• No more scribbled-out math on the back of a business card 
• No more underbidding just to win the job
• Clear visibility into your profit targets before you ever send a proposal

When your sales team has the right pricing tools, they can confidently quote jobs that hit your margin requirements.

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Why Production Metrics Matter 

Even with great pricing, poor execution can tank your margins. The top production metrics to watch include:

• Labor efficiency: Are jobs being completed within estimated hours?
• Material cost variance: Are you spending more than planned?
• Job duration vs. schedule: Are install times slipping?
• Call-backs and rework: Are you eating costs after the sale?

Your crews may be hard-working, but without clear benchmarks and visibility, it’s impossible to know whether they’re profitable.

This is where having a contractor CRM with strong reporting features becomes essential. You can track these KPIs and flag underperforming jobs before the month is over.

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From 15% to 47%: One Contractor’s Profit Turnaround

When Daniel Beattie of Privacy Fence of West Michigan switched from Jobber to Builder Prime, his gross profit margin jumped from 15% up to 47%. That wasn’t by accident. By combining the power of Builder Prime’s detailed reporting, Price Book, and tracking tools, he:

• Stopped underpricing jobs
• Identified where profit was leaking during production
• Empowered his team to quote with confidence

Daniel’s story is a powerful reminder that profit doesn’t happen by accident – it happens when you have the data and tools to protect it.

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Set Clear Goals – and Track Your Progress Against Them

One of the most powerful things you can do is establish a monthly gross profit goal and monitor it weekly.

That’s where the Goals and Pacing Report in Builder Prime comes in. It allows home improvement business owners to:

• Set sales and margin goals by rep, product, or department
• See how close you are to target in real-time
• Adjust course before the end of the month

Margins shouldn’t be a mystery you uncover at tax time. They should be a number that your whole team is both focused on and responsible for.

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Take Control of Your Profitability 

If you want to build a business that lasts, you need more than a steady stream of leads. You need solid reporting that shows you where your money is going and how to keep more of it.

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Builder Prime makes it easy to:

• Set accurate pricing with the Price Book feature
• Monitor production performance in real-time
• Align your team around margin goals using the Goals and Pacing Report

If you’re ready to track smarter, price better, and grow your margins, schedule a free demo of Builder Prime today.

Protect your profit. We’ll show you how.

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