Where demolition contractors lose money
6 things cost demolition contractors money without ever becoming a line item, and each one traces to a step you can install. Demolition contractors average 20% gross margin, 16% overhead and 4% net profit at $1M to $5M of revenue. The CFOS target at that size is 25% gross margin, 15% overhead and 10% net, and the 6 points left on the table is where those mechanisms live. Figures for all 7 revenue bands are in the table below.
Demolition ranks 8th of 11 in civil and earthwork on net profit, and it has heavier overhead than the 48-trade average. Here is every figure, across all 7 revenue bands.
Run On CFOS publishes the full benchmark reference: 48 trades across all 7 revenue bands, $1M to $500M and above. The 4 bands above $25M are modeled and labeled that way in every table, and no CFOS target is published for them. Run On CFOS computes net profit as gross margin minus overhead, before taxes.
Demolition by revenue band
| Metric | $1M to $5M | $5M to $10M | $10M to $25M | $25M to $50MModeled | $50M to $100MModeled | $100M to $500MModeled | $500M+Modeled | CFOS target at $1M to $5M |
|---|---|---|---|---|---|---|---|---|
| Overhead | 16% | 15% | 14% | 13% | 12% | 10% | 9% | 15% |
| Gross margin | 20% | 22% | 23% | 25% | 26% | 28% | 29% | 25% |
| Net profit | 4% | 7% | 9% | 12% | 14% | 18% | 20% | 10% |
| Metric | $1M to $5M | $5M to $10M | $10M to $25M |
|---|---|---|---|
| Overhead | 15% | 14% | 13% |
| Gross margin | 25% | 24.5% | 25.5% |
| Net profit | 10% | 10.5% | 12.5% |
Modeled extension of the survey curve, not reconciled against the licensed CFMA Benchmarker. That applies to the 4 bands above $10M to $25M, and no CFOS target is published for them.
Gross margin and overhead come from figures CFMA, Jones Maresca and other sources publish by trade and size. Net profit is computed, not surveyed: net profit = gross margin minus overhead. Nothing comes out for taxes, interest or other income and expense, so it is a before tax figure, on the same basis as CFMA's net income before taxes.
CFMA's 2025 medians are 7.1 percent before interest and taxes and 6.7 percent net income before taxes. Gross margin minus overhead leaves out interest and other income and expense, so a figure here can come in a little above or below a reported net income on the same business.
Above the $10M to $25M band the gross margin and overhead rows are a modeled extension of the same curves. They have not been reconciled against the licensed CFMA Benchmarker, so read those bands as a model and not as a survey result.
Run On CFOS. Run On CFOS Trade Benchmark Reference: Demolition. 2026. Sulphur Prairie Operations, LLC. https://runoncfos.com/trades/demolition. CC BY 4.0.
Figures on this page were last revised 2026-08-21. Published under CC BY 4.0, which permits reuse of any figure here, including commercially, as long as the credit above travels with it. The same figures in machine-readable form: /benchmarks.json.
Trade level gross margin and overhead come from figures CFMA, Jones Maresca and other sources publish, and Run On CFOS computes net profit from them: net profit = gross margin minus overhead, before taxes. The CFOS targets beside them are from the book CONTROL: C.F.O.S. Construction Financial Operating System, published with the full reference at runoncfos.com.
- 2024 Construction Financial Benchmarker, Executive Summary, Construction Financial Management Association, 2024.
- 2025 Construction Financial Benchmarker, Executive Summary, Construction Financial Management Association, 2025.
- 2025 Performance Benchmarks, Construction Companies, Jones Maresca and Company, 2025.
- Run On CFOS Trade Benchmark Reference, Sulphur Prairie Operations, LLC, 2026.
Sourcing and method: the methodology page.
Which bands are measured. The 4 bands above $10M to $25M extend the survey curve further out and have not been reconciled against the licensed CFMA Benchmarker. How every figure was built is explained on the methodology page.
Use these numbers on your own jobs
CFOS for QuickBooks grades your own books against the demolition figures above, every month. At $1M to $5M, the published average net profit is 4% before taxes and the CFOS target is 10%.
Under $10M. You see which jobs made money while they are still open, so you can fix a demolition job before it closes. From $10M to $50M. The controller gets a WIP that ties to QuickBooks Online, with each project manager's cost to complete approved every month.
6 problems specific to demolition
You priced the steel credit in February and crossed the scale in October. The machine is on the pad, the crew is idle, and everyone is waiting on a letter from the gas company. You work five weeks and wait twenty months for the money. Almost everything a demolition job costs goes out in the first two weeks, and the first pay application hasn't even been submitted yet.
Each one below points at the item, the unit, the clock, or the party that makes it a demolition problem, and it says which step fixes it.
| Mechanism | Why it's specific to this trade | Step |
|---|---|---|
| Your Bid Set A Scrap Price The Market Never Honored | Demolition is the only trade that puts a negative cost line in its bid. A framer prices material going in, while you price material coming out, at a number set by a commodity market you won't sell into for months. Escalation clauses on a scrap credit are close to unheard of on a hard bid, so the entire price move belongs to you. | Estimating system |
| Four Clocks Own Your Start Date And You Own None | Other subs wait on the trade ahead of them, and that trade is on the same job with the same GC pushing it. Demolition waits on a lab result, a federal notification window, and four utilities that have no contract with you and no reason to hurry. The 10 working day NESHAP clock can't be shortened by paying anybody, and it doesn't begin until the notification is filed correctly. | Project management |
| Demo Goes First And Gets Its Retention Back Last | A finish trade is on site near the end, so its retention holds for a few months. Demolition finishes before the slab, which means the same 10% stays out roughly six times longer per dollar earned. You're lending the project money at the very beginning of it, and you collect when the last punch item closes. | Monthly cadence |
| The Scale Wants Cash Today, The GC Pays In Sixty Days | Most trades spend across the full duration and bill along the way. Demolition concentrates its outflow into the opening two weeks and then waits on pay-when-paid terms. No other trade has that ratio of front-loaded cash out to contract value, and the shorter the job, the worse that curve gets. | Overhead calculation |
| Your Breaker Uses Up Tool Steel That Overhead Pays For | A high-reach excavator comes out of a thin national rental fleet, so when the one you need is booked or down you wait weeks or pay a premium plus a second lowbed. That pushes owners toward buying iron, and owned iron has a payment, insurance, and depreciation that go into overhead no matter which job is active. A breaker also uses up a wear item measured in thousands of dollars over a few job weeks, which is a cost category a framer or a plumber never has to allocate at all. | Equipment cost basis |
| They Found A Tank A Year After You Demobilized | Other trades get callbacks on work somebody can walk over and look at. Demolition gets claims about what was underground and what was next door, discovered by another contractor's machine, months after your iron left the county. The evidence can't be re-opened, because removing the evidence was the scope. | Project management |
Demolition against the other 47 trades
| Metric | Demolition | Civil and earthwork average | All 48 average | Rank |
|---|---|---|---|---|
| Overhead | 16% | 15% | 15.1% | 32nd of 48 |
| Gross margin | 20% | 20.7% | 22.1% | 39th of 48 |
| Net profit | 4% | 5.7% | 7% | 45th of 48 |
Demolition sheds 7 points of overhead between $1M to $5M and $500M+, against 6.2 for civil and earthwork as a group. Inside that group, SWPPP and erosion control is the most profitable at 10%, and Civil, Excavation, Paving, 1 more all have 14% overhead, the leanest. Demolition is neither, which is the usual position and the one with the most room in it.
Other civil and earthwork trades
What owners ask
What overhead should a demolition contractor have?
Demolition shares its overhead figure with 12 other trades at this revenue, which is what the published data resolves to. It averages 16% at $1M to $5M and 9% at $500M+, as a percentage of revenue. That is 1 point above the civil and earthwork average of 15%. The CFOS target at $1M to $5M is 15%. The CFOS target is one point leaner than your trade's industry average at your revenue.
What gross margin should a demolition contractor have?
Demolition shares its gross margin figure with 1 other trade at this revenue, which is what the published data resolves to. It averages 20% at $1M to $5M and 29% at $500M+, as a percentage of revenue. That is 0.7 points below the civil and earthwork average of 20.7%. The CFOS target at $1M to $5M is 25%. The CFOS target recalculates at your revenue: whatever gross margin produces the net profit target once overhead is paid, never below your trade's own industry average.
What net profit should a demolition contractor have?
Demolition has 4% at $1M to $5M, before taxes, gross margin minus overhead, as a percentage of revenue, which ranks 45th of 48 and puts it in the bottom of the table. By $500M+ it reaches 20%. That is 1.7 points below the civil and earthwork average of 5.7%. The CFOS target at $1M to $5M is 10%. The CFOS target recalculates at your revenue: 10 percent before taxes, or 3.5 points better than your trade's industry average, whichever is higher.
What profit margin should a small demolition business have?
Owners usually mean net profit when they say profit margin, and for demolition at $1M to $5M that's 4%. Gross margin is a different number, 20%, and it's what's left after job costs but before overhead. Overhead is the 16% between the two. A small demolition business holding 4% net is at the published figure for its size, and the CFOS target at that revenue is 10%.
Does demolition get more profitable as it grows?
Overhead is the number that moves. Demolition sheds 7 points between $1M to $5M and $500M+, which is in line with the 6.2 points civil and earthwork sheds as a group. Net profit starts 3 points under the 48-trade average, so the room is in the overhead line before it's anywhere else.
Where does demolition rank against the other trades?
Demolition is 8th of 11 in civil and earthwork on net profit. SWPPP and erosion control is the most profitable at 10%. Civil, Excavation, Paving, 1 more have the leanest overhead at 14%. Gross margin ranks 39th of 48 and overhead ranks 32nd.
That's the industry average and the CFOS target for demolition at every size. Want your own books set beside them? The Financial Health Snapshot builds a CEO Report from your last twelve months, sets every figure against your trade, and walks you through it on a 60 minute call. SPM The Construction CFO (Sulphur Prairie Management, LLC) is a separate firm, and the same author leads it.
Everything on this page is something you can install yourself, and CONTROL is the order to do it in. If you would rather buy the finished result, SPM The Construction CFO does this work for demolition contractors as a service. It is a separate firm, Sulphur Prairie Management, LLC, led by the same author.
Wrote CONTROL, the 8 step system behind these figures. More about the author.