Where fire protection contractors lose money
6 things cost fire protection contractors money without ever becoming a line item, and each one traces to a step you can install. Fire protection contractors average 23% gross margin, 15% overhead and 8% net profit at $1M–$5M of revenue. The CFOS target at that size is 25.5% gross margin, 14% overhead and 11.5% net, and the 3.5 points left on the table is where those mechanisms live. Figures for all 7 revenue bands are in the table below.
Fire protection ranks 4th of 7 in mechanical and life safety on net profit, and it has leaner overhead than the 48-trade average. Here is every figure, across all 7 revenue bands.
Fire protection by revenue band
| Metric | $1M–$5M | $5M–$10M | $10M–$25M | $25M–$50MModeled | $50M–$100MModeled | $100M–$500MModeled | $500M+Modeled | CFOS target at $1M–$5M |
|---|---|---|---|---|---|---|---|---|
| Overhead | 15% | 14% | 13% | 12% | 11% | 10% | 9% | 14% |
| Gross margin | 23% | 25% | 26% | 27% | 28% | 30% | 31% | 25.5% |
| Net profit | 8% | 11% | 13% | 15% | 17% | 20% | 22% | 11.5% |
| Metric | $1M–$5M | $5M–$10M | $10M–$25M |
|---|---|---|---|
| Overhead | 14% | 13% | 12% |
| Gross margin | 25.5% | 27.5% | 28.5% |
| Net profit | 11.5% | 14.5% | 16.5% |
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 CFMA, Jones Maresca and SPM's own trade data, because those are the figures those sources report by trade and size. Net profit is calculated from them as gross margin minus overhead, so the three rows tie. That makes it an operating profit figure: what is left before interest, other income and expense, and the tax planning choices owners make, such as bonuses, depreciation methods and retirement contributions.
Surveys report net income before taxes after those items, so a reported net can run below the figure here. At the typical contractor the difference is small: CFMA's 2025 medians are 7.1 percent before interest and taxes and 6.7 percent net income before taxes. It grows with size. Against the separate measured net profit dataset, the calculated net runs 0.8 points higher at $1M to $5M, 2.2 points at $5M to $10M and 3.5 points at $10M to $25M, because the gross margin and overhead rows change faster with size than reported net profit does.
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, and the calculated net there runs well above survey medians, so read those bands as a model and not as a survey result.
Run On CFOS. Run On CFOS Trade Benchmark Reference: Fire protection. 2026. Sulphur Prairie Operations, LLC. https://runoncfos.com/trades/fire-protection. 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 derives net profit as gross margin minus overhead. 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–$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.
6 problems specific to fire protection
You cut the pump deposit check in March and the truck backs in the next January, and every month in between your money is out with nothing on the pay app. The engineer wrote one line on the drawings and you're the one drafting it, stamping it, and defending it to two reviewers who don't answer to each other. You're buying pipe off a number you wrote eight months ago, and there's no second brand to call when the mill price jumps. The lead-in you buried before the slab is still holding your retention, and it releases the day a fire marshal watches a test you can't schedule on your own.
Each one below points at the item, the unit, the clock, or the party that makes it a fire protection problem, and it says which step fixes it.
| Mechanism | Why it's specific to this trade | Step |
|---|---|---|
| The Pump Can't Be Ordered Until The AHJ Signs The Calc | Plenty of trades buy long lead gear. Fire protection is the only one whose single biggest equipment buy falls legally downstream of a third party's plan review, because a fire pump is a listed package sized off an approved calc: pump, controller, jockey pump, sensing line, and sometimes a diesel driver and day tank. A framer can buy studs the week he needs them. You're writing a six figure deposit against a drawing a fire marshal hasn't commented on yet. | Monthly cadence |
| You Stamped The Drawings, So You Own Both Review Clocks | Delegated design makes you the designer of record on a system you also install, which turns the drafting table into a production department here and a convenience everywhere else. FM Global and highly protected risk reviewers apply rules tighter than code, so clearing the fire marshal doesn't mean you're cleared. No other trade on the building needs two independent approvals before the first stick of pipe gets cut. | Project management |
| Sprinkler Pipe Has No Substitute When The Price Moves | Most trades answer a price spike by switching brands or proposing an equal. Listing and approval rules take that move off the table here, because a coupling that isn't listed for fire service isn't a coupling you're allowed to install. The jobs you chased hardest, the long institutional ones, have the widest spread between the day you priced pipe and the day you buy it. | Estimating system |
| The Fire Marshal Releases Money You Earned Two Years Ago | No other trade spans the building like this. The concrete sub is off the site before your overhead rough starts and his retention ages against a milestone he controls. Yours ages against a witnessed test that another contractor's open punch item can hold up indefinitely, on money you earned before the building had walls. | Software and bookkeeping alignment |
| Five Mobilizations Run Against One Lump Labor Budget | A painter comes back twice and the second trip looks a lot like the first. Your fifth trip is trim work at height in a finished space with the GC counting days to the certificate of occupancy, and it works nothing like the rough. Your pipe is fabricated to a drawing, so a ceiling change that's a shrug for other trades scraps steel you've already paid for and already grooved. | Job cost structure |
| A Freeze Event Hits A Year After Final Payment | Your warranty exposure is measured in seasons, because the failure mode needs weather before it will turn up. When it does, water discharges into a finished building, so a small defect in your work turns into a large claim against somebody. No other trade's callback runs a fire watch meter while the phone is still ringing. | Overhead calculation |
Fire protection against the other 47 trades
| Metric | Fire protection | Mechanical and life safety average | All 48 average | Rank |
|---|---|---|---|---|
| Overhead | 15% | 16.1% | 15.1% | 17th of 48 |
| Gross margin | 23% | 24.6% | 22.1% | 13th of 48 |
| Net profit | 8% | 8.4% | 7% | 8th of 48 |
Fire protection sheds 6 points of overhead between $1M–$5M and $500M+, against 6.3 for mechanical and life safety as a group. Inside that group, Mechanical, Plumbing and Elevator all keep 9%, the most in the group, and Fire protection runs the leanest overhead at 15%. The leanest one is this trade.
Other mechanical and life safety trades
What owners ask
What overhead should a fire protection contractor run?
Fire protection shares its overhead figure with 14 other trades at this revenue, which is what the published data resolves to. It averages 15% at $1M–$5M and 9% at $500M+, as a percentage of revenue. That is 1.1 points below the mechanical and life safety average of 16.1%. The CFOS target at $1M–$5M is 14%. The CFOS target is one point leaner than your trade's industry average at your revenue.
What gross margin should a fire protection contractor run?
Fire protection shares its gross margin figure with 6 other trades at this revenue, which is what the published data resolves to. It averages 23% at $1M–$5M and 31% at $500M+, as a percentage of revenue. That is 1.6 points below the mechanical and life safety average of 24.6%. The CFOS target at $1M–$5M is 25.5%. 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 fire protection contractor run?
Fire protection shares its net profit figure with 12 other trades at this revenue, which is what the published data resolves to. It averages 8% at $1M–$5M and 22% at $500M+, before taxes, as a percentage of revenue. That is 0.4 points below the mechanical and life safety average of 8.4%. The CFOS target at $1M–$5M is 11.5%. 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 fire protection business run?
Owners usually mean net profit when they say profit margin, and for fire protection at $1M–$5M that's 8%. Gross margin is a different number, 23%, and it's what's left after job costs but before overhead. Overhead is the 15% between the two. A small fire protection business holding 8% net is at the published figure for its size, and the CFOS target at that revenue is 11.5%.
Does fire protection get more profitable as it grows?
Overhead is the number that moves. Fire protection sheds 6 points between $1M–$5M and $500M+, which is in line with the 6.3 points mechanical and life safety 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 fire protection rank against the other trades?
Fire protection ties 3 trades in mechanical and life safety on net profit, all at 8%. Mechanical, Plumbing and Elevator are the most profitable at 9%. It also runs the leanest overhead in the group. Gross margin ranks 13th of 48 and overhead ranks 17th.
That's the industry average and the CFOS target for fire protection 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 runs 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 fire protection contractors as a service. It is a separate firm, Sulphur Prairie Management, LLC, run by the same author.
Wrote CONTROL, the 8 step system behind these figures. More about the author.