Where electrical contractors lose money
5 things cost electrical contractors money without ever showing up as a line item, and each one traces to a step you can install. Electrical contractors average 25% gross margin, 16% overhead and 9% net profit at $1M–$5M of revenue. The CFOS target at that size is 26% gross margin, 15% overhead and 11% net, and the gap of 2 points on the bottom line is where those mechanisms live. Figures for all 7 revenue bands are in the table below.
Electrical sits 1st of 6 in electrical and technology on net profit, and it carries heavier overhead than the 48-trade average. Here is every figure, across all 7 revenue bands.
Electrical by revenue band
| Metric | $1M–$5M | $5M–$10M | $10M–$25M | $25M–$50M | $50M–$100M | $100M–$500M | $500M+ | CFOS target |
|---|---|---|---|---|---|---|---|---|
| Overhead | 16% | 15% | 14% | 13% | 12% | 11% | 10% | 15% |
| Gross margin | 25% | 27% | 28% | 29% | 30% | 32% | 33% | 26% |
| Net profit | 9% | 12% | 14% | 16% | 18% | 21% | 23% | 11% |
SPM The Construction CFO. SPM Trade Benchmark Reference: Electrical. 2026. Sulphur Prairie Management, LLC. https://runoncfos.com/trades/electrical. 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 compiled by SPM The Construction CFO, validated against published CFMA and JMCO benchmarks. The CFOS targets beside them are from the book CONTROL: The Construction Financial Operating System, published with the full reference at runoncfos.com.
- 2024 Construction Financial Benchmarker, Executive Summary, Construction Financial Management Association, 2024.
- 2025 Performance Benchmarks, Construction Companies, Jones Maresca and Company, 2025.
- SPM Trade Benchmark Reference, Sulphur Prairie Management, LLC, 2026.
Sourcing and method: the methodology page.
Which bands are measured. The 4 bands above $10M–$25M carry the survey curve further out and have not been reconciled against the licensed CFMA Benchmarker. How every figure was built is set out on the methodology page.
5 problems specific to electrical
Gear can't release for fabrication until the utility publishes available fault current, and the utility isn't on your subcontract at all. Gear billed as stored material gets retainage at the same rate as labor, even though you funded 100 percent of it in cash before billing a dollar. The NEC edition governing your job is locked by the permit issue date, not your bid date. You bid labor in unit hours and the field hit the unit hours.
Each one below points at the item, the unit, the clock, or the party that makes it an electrical problem, and it says which step fixes it.
| Mechanism | Why it's specific to this trade | Step |
|---|---|---|
| Your gear release clock starts at the power company | No other trade's fabrication release depends on a letter from a regulated monopoly that has no contract with anyone on the site. The study sets protective device settings and arc flash labeling, which makes the utility letter a hard gate in front of a 30 to 60 week build rather than a paperwork step. Everyone on the job treats energization as the electrician's date, and the electrician controls none of the three parties who set it. | Project management |
| Retainage on gear is a loan you didn't agree to | Electrical carries a far higher equipment to labor ratio on the front half of a job than the trades it shares a wall with, so retainage on material is a much larger line here than anywhere else on the GC's subcontractor list. Retainage held against labor at least trails a payroll you funded 30 to 45 days earlier. The same percentage held against gear trails a wire transfer you made a year earlier, for an asset the owner already holds title to. | Monthly cadence |
| The permit date picks the code, and the code picks cost | Code cycles change quantities for this trade in a way they don't for others: more GFCI and AFCI breakers means more panel space, which can mean bigger panels, which can mean different feeders. Because the added cost scales with device count, a bigger job produces a bigger miss, and a repetitive multifamily deck multiplies it by every unit. The GC's position never changes either: code compliance was always in your scope, so a hard bid swallows it with no change order. | Estimating system |
| You hit the hours and still lost money on the rate | Labor runs 40 to 45 percent of revenue in an electrical shop, and the estimate treats it as a quantity question while the damage happens on the price side. The electrical bid passes through two conversions, unit hours to crew hours and crew hours to dollars, and both assumptions live in a settings screen nobody opens. License law and crew availability set the apprentice mix you run, while the template still assumes the mix somebody typed in years ago. | Estimating system |
| You make six trips and bid temp power at month zero | Electrical is the only trade that installs a system for the entire site at month zero and then maintains it for everybody else at no additional charge for the full duration, on a lump sum priced before the schedule existed. Two guys changing lamps and repairing cords other trades ran over is a real crew on a real payroll with nowhere to bill. The rough in is also the most exposed work in the wall, thin wall conduit and MC that other trades hang from, drill through, and stand on, and the damage surfaces at trim when no one can be charged for it. | Standards and accountability |
Electrical against the other 47 trades
| Metric | Electrical | Electrical and technology average | All 48 average | Rank |
|---|---|---|---|---|
| Overhead | 16% | 15.5% | 15.1% | 32nd of 48 |
| Gross margin | 25% | 22.8% | 22.1% | 5th of 48 |
| Net profit | 9% | 7.3% | 7% | 2nd of 48 |
Electrical sheds 6 points of overhead between $1M–$5M and $500M+, against 6 for electrical and technology as a group. Inside that group, Electrical keeps the most at 9%, and Fiber, Solar and Telecom all run 15% overhead, the leanest. The first of those is this trade.
Other electrical and technology trades
Proof from this trade
What owners ask
What overhead should an electrical contractor run?
Electrical shares its overhead figure with 12 other trades at this revenue, which is what the published data resolves to. It runs 16% at $1M–$5M and 10% at $500M+, as a percentage of revenue. That sits 0.5 points above the electrical and technology average of 15.5%. The CFOS target at $1M–$5M is 15%. The CFOS target is one point leaner than your trade's average at your revenue.
What gross margin should an electrical contractor run?
Electrical shares its gross margin figure with 2 other trades at this revenue, which is what the published data resolves to. It runs 25% at $1M–$5M and 33% at $500M+, as a percentage of revenue. That sits 2.2 points above the electrical and technology average of 22.8%. The CFOS target at $1M–$5M is 26%. The CFOS target is published at $1M to $5M. It's set at whatever gross margin produces the net profit target once overhead is paid, and never below your trade's own average.
What net profit should an electrical contractor run?
Electrical shares its net profit figure with 5 other trades at this revenue, which is what the published data resolves to. It runs 9% at $1M–$5M and 23% at $500M+, before taxes, as a percentage of revenue. That sits 1.7 points above the electrical and technology average of 7.3%. The CFOS target at $1M–$5M is 11%. The CFOS target is published at $1M to $5M.
What profit margin should a small electrical business run?
Owners usually mean net profit when they say profit margin, and for electrical at $1M–$5M that's 9%. Gross margin is a different number, 25%, and it's what's left after job costs but before overhead. Overhead is the 16% sitting between the two. A small electrical business holding 9% net is at the published figure for its size, and the CFOS target at that revenue is 11%.
Does electrical get more profitable as it grows?
Overhead is the number that moves. Electrical sheds 6 points between $1M–$5M and $500M+, which is in line with the 6 points electrical and technology sheds as a group. Net profit is already above the 48-trade average, so the room is in holding it while revenue climbs.
Where does electrical sit against the other trades?
Electrical is 1st of 6 in electrical and technology on net profit. It keeps the most in the group. Fiber, Solar and Telecom run the leanest overhead at 15%. Gross margin ranks 5th of 48 and overhead ranks 32nd.
Everything on this page is something you can install yourself, andCONTROL is the order to do it in. If you would rather buy the finished result, SPM The Construction CFO does this work for electrical contractors as a service. It is a separate firm, Sulphur Prairie Management, LLC, run by the same author.
Wrote CONTROL, the 8 step system these figures sit inside. More about the author.