You have no idea what good looks like
You know your numbers. You don't know whether they're any good, because you've never seen anybody else's.
Without a benchmark, a bad year and a normal year look identical, because the only thing you're comparing against is yourself. Trade and revenue band both move the target, so a figure that's healthy for one sub at one size is a warning sign for another. Published averages exist for gross margin, net profit, and overhead, and reading your own numbers against them is a short job once you know where to look. What you're after is the largest difference between you and the average, because that's where the money went.
Three moves, in order
Step 03: Overhead calculation
What indirect cost really comes to at your size, and the rate your estimating template should be carrying.
Other problems step 03 solves
Other things that go wrong
What owners ask
What is a good profit margin for a subcontractor?
You know your numbers. You don't know whether they're any good, because you've never seen anybody else's. Without a benchmark, a bad year and a normal year look identical, because the only thing you're comparing against is yourself. Trade and revenue band both move the target, so a figure that's healthy for one sub at one size is a warning sign for another. Published averages exist for gross margin, net profit, and overhead, and reading your own numbers against them is a short job once you know where to look. What you're after is the largest difference between you and the average, because that's where the money went.
Which part of the system fixes this?
The step is number 03, overhead calculation. What indirect cost really comes to at your size, and the rate your estimating template should be carrying. It's drawn from chapter 3 of CONTROL: The Construction Financial Operating System.
Is this normal for my trade?
Across the 48 trades in the benchmark reference, net profit at $1M–$5M averages 7% before taxes. If you're well under that and this page describes your month, the two are usually the same story. The published average tells you where the pack sits, and your own job costing tells you where you sit, which is the number that pays payroll.
Where do I start?
Find your trade and your revenue band, then read all three numbers.
Can I fix this without touching anything else?
You can try, and it doesn't hold. Step 03 depends on step 01, job cost structure and step 02, equipment cost basis. Install it ahead of those and it produces numbers nobody trusts, which is worse than the problem you started with.
Josh Luebker ran commercial construction projects before he ran the numbers behind them, on data centres, military bases, hospitals, and high-rises. He wrote CONTROL: The Construction Financial Operating System, which is an eight-step framework for commercial subcontractors, and it publishes on October 1, 2026. He is a master electrician who moved into the office and kept the field vocabulary.
Sulphur Prairie Operations LLC maintains the benchmark reference behind these figures. Every edition is reconciled against the newest CFMA survey release before it publishes here. Where a figure changes between editions, the older edition keeps its year in the title so a citation to it stays correct.