good profit margin one man construction
What is a Realistic Profit Margin for a One-Man Business?
You finished the year busy, knackered, and somehow not much better off. So what should actually be left over? For a one-man construction or trade business, a realistic net profit margin sits around 10% to 20% once you've paid yourself a proper wage. Notice that last bit. If you haven't first paid yourself a market wage as a cost, your 'profit' is just your own disguised labour, and that's the number-one reason sole traders think they're doing fine when they're not.
Let's get clear on what good looks like and how to actually measure it.
Margin vs markup vs your wage
Three things get muddled constantly. Markup is what you add to a material's cost. Margin is the slice of the final price that's profit. And your wage is a cost of the business, not the profit. Sort these out and the numbers finally make sense.
What's realistic in the trades
- Net margin under 10%: tight, one bad job wipes it out
- Net margin 10-20%: healthy for a one-man band, this is the target
- Net margin above 20%: strong, usually specialist or premium work
- Material markup of 10-20% on top of trade price is standard and fair
Why 'turnover' fools people
Turning over £90k sounds great until you see £75k went on materials, van, tax and overheads. Turnover is vanity, margin is sanity. A smaller, well-priced operation often takes home more than a busy one running on thin air.
The net margin formula
Here's the one number to track. Run it every quarter, not just at year-end when it's too late to change anything.
Worked example for a year:
- Revenue: £90,000
- Materials: £30,000
- Overheads (van, insurance, tools, software): £14,000
- Your wage (paid to yourself): £34,000
- Net profit = £90,000 − £30,000 − £14,000 − £34,000 = £12,000
- Net margin = (£12,000 ÷ £90,000) × 100 = 13.3% - right in the healthy band
Where new tradies get this wrong
These are the classic ways a busy year ends with an empty bank account.
- Not paying themselves a wage first. If your labour isn't costed in, your margin is fiction. Pay yourself as a line cost, then see what's genuinely left.
- Chasing turnover over margin. Taking on cheap jobs to look busy fills the diary and empties the account. A 15% margin on the right work beats 3% on a flood of it.
- Never costing jobs after the fact. They quote, they work, they bank the cheque, and never check if the job made what they thought. Without job-costing, you're guessing.
See your real margin per job
You can't improve a margin you never measure. Quotato has built-in job-costing and tracking that compares what you quoted against what the job actually cost, materials, labour, the lot, so you see the real margin on every job, not a guess at year-end.
That's how you spot the work that pays and the work that quietly bleeds you. Drop the loss-makers, price the winners properly, and your overall margin climbs without you working a single extra hour. The data does the deciding for you.
Aim for that 10-20% band, measure it honestly, and protect it like it's your wage. Because it is.
Track real margins per job and stop guessing at year-end.
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