?? Why Contractors Struggle with Profit Margins—and How to Fix It

Hey, folks. Let’s get real for a minute.

If you’re a contractor making $1 to $10 million a year, you might think your business is thriving. But when you break it down, your profit margins are thinner than a contractor’s patience with a picky client. Why? Because too many of you are working hard without working smart. It’s time to stop letting money slip through the cracks and start fixing the leaks in your bottom line.

Let’s talk about the three biggest profit killers in the contracting world—and, more importantly, how to fix them.

1. Pricing Like You’re in a Race to the Bottom

Too many contractors bid on jobs thinking, "If my price is lower, I’ll win the job." Guess what? Winning jobs with razor-thin margins is a guaranteed way to lose in the long run.

?? Fix It: Learn your numbers! You should know your break-even point on every job and bid at a price that includes a healthy profit margin. If you don’t value your work, no one else will.

2. Job Costing? More Like Job Guessing

Here’s a hard truth: most contractors aren’t tracking actual job costs. You’re ballparking it—and it’s killing your profits. Materials, labor, equipment, subs... it all adds up. And if you’re not on top of it, your projects will bleed money.

?? Fix It: Use job costing software or even a simple spreadsheet. Track every dollar that goes into a project. This is non-negotiable, people!

3. Cash Flow Chaos

Feast or famine. Sound familiar? When cash flow isn’t steady, you can’t pay bills, make payroll, or reinvest in your business. That’s not running a company—it’s playing roulette with your future.

?? Fix It: Budget for the slow seasons. Build a cash reserve that covers three to six months of expenses. And stop robbing Peter to pay Paul—prioritize paying down debt and managing receivables like a hawk.

BONUS TIP: Stop Operating Without a Plan

Flying by the seat of your pants might work in the short term, but it’s no way to grow a business. You need a strategic plan that includes profit goals, measurable milestones, and clear accountability.

Let’s Get to Work

You don’t have to accept low margins as the cost of doing business. You can run a profitable contracting business—you just need the right systems, discipline, and mindset.

If you’re ready to stop working harder for less and start building a business that works for you, let’s connect.

Drop a comment below and let me know: What’s your biggest challenge when it comes to profit margins?

Together, we can turn your business into a money-making machine. Let’s go!

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