The $651,000 Gap: What Separates Top Remodelers From The Rest

NAHB’s newest “Remodelers' Cost of Doing Business” study shows why knowing the numbers is essential to becoming a top-performing firm and not one struggling to turn a profit.

Elliot Pike

Oct. 15, 2026

3 min read

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Remodelers Cost of Doing Business book cover

Two remodeling companies. Same size, same market, same trade. One nets $493,000 for the year. The other loses $158,000. Same industry, wildly different outcomes.

That's not a hypothetical. It's the real spread NAHB Economics found between the top and bottom 25% of firms in the 2026 "Remodelers' Cost of DMaking money on remodelingoing Business" study.

If you don't know which side of that gap your business stands on, it's time to find out.

Why This Matters Right Now

Remodeling is heading into a growth period. NAHB economists project that sometime in the next five to 10 years, remodeling will overtake new single-family and multifamily construction to represent more than half of all residential construction spending.

That's a huge opportunity, but only for the companies with a business running well enough to grab it. A rising tide doesn't lift boats that are already taking on water.

That's why knowing your numbers—really knowing them—is essential.

Numbers That Should Get Your Attention

The NAHB economics team surveys remodeling firms of every size to produce the "Remodelers' Cost of Doing Business" study. It's the best comparison tool in our industry. Here's what stood out in the 2026 edition:

Net Profit Swing. The top 25% of firms averaged $493,000 in net profit, an 18.4% net profit margin. The bottom 25% averaged a $158,000 loss, that’s a 10.3% negative net profit margin. The industry-wide average landed at $172,000 in net profit, a 6.3% net profit margin. Decent, but there's plenty of room to climb.

Profit Margin. Top firms operate at almost double the margin of firms at the bottom, 40.1% versus 19.9%. If you're closer to the bottom of that range, start scrutinizing your labor and materials spending.

Administrative Costs. The bottom 25% spend nearly twice as much as the top 25% on administrative costs as a share of revenue. If you haven't modernized your back office, payroll, estimating, and project management software, you're probably paying for it in lost profit.

Business Focus. Specialization wins. The top 25% pulled in more than 97% of revenue from residential remodeling alone. The bottom 25% spread themselves across single-family, commercial, and remodeling work.

Where Do You Stand?

Pull your financials from last year and run a quick check:

Determine your net profit margin by dividing net profit by revenue. Compare it with the brackets for firms of your size as reported in the “Remodelers' Cost of Doing Business.” The study sorts data by firm size, business model, and region.
Discover your administrative costs as a percentage of revenue by adding payroll, software, and office overhead. Compare that with your peer group.
Find your revenue mix—that being the share of revenue from remodeling versus other work.
Compare all your findings with your peer group to determine where you stand.

If your numbers land closer to the bottom quartile than the top, that's not a verdict, it's a to-do list.

Where to Get the Full Picture

The 61-page “Remodelers' Cost of Doing Business” study also covers balance sheets, financial ratios, assets, liabilities, owner's equity, and dozens of other benchmarks. It’s available for purchase at BuilderBooks.com for $79.95 for NAHB members and $149.95 for nonmembers.

The Bottom Line

Change is coming to this industry, and the companies that thrive will be the ones who know their numbers. Get the study and run the comparison to find out on which side of that $651,000 gap you're standing.