How Do I Measure Up?

The three most common questions I get from remodelers who are trying to gain insights and make sense out of things are:

1. What are you seeing out there?
2. What are others doing?
3. How do I measure up?

While there are many ways to compare companies and performance to others , one simple metric is to compare is annual Net Profit (the term “net profit” can be looked at in different ways. The figures below would be NP before any owner/leadership distributions.)

The Sampling

These represent 50 design build/full-service firms in business for more than ten years. Total 2024 sales ranged from $3 million to $50 million.

I also surveyed home improvement businesses, and the results were very similar, but the sampling was only 23 companies.

What to Make of This 

1. If you are not making over 5% , you are in the bottom 16%.
2. Above 10% is very achievable but you have to have your act together.
3. The companies at the top have been making marketing a priority.
4. The top 40% are committed to training.
5. The top 25% don’t see slippage in gross profit during production.
6. Leadership alignment is high with the most profitable.
7. Higher net is a product of what you do, not what you plan or hope for.

Unlike some industries , the remodeling business is less dependent on the market conditions than you think….It is a “make it happen business!”