Where waterproofing contractors lose money
5 things cost waterproofing contractors money without ever becoming a line item, and each one traces to a step you can install. Waterproofing contractors average 26% gross margin, 17% overhead and 9% net profit at $1M–$5M of revenue. The CFOS target at that size is 28.5% gross margin, 16% overhead and 12.5% 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.
Waterproofing ranks 1st of 8 in envelope and structure on net profit, and it has heavier overhead than the 48-trade average. Here is every figure, across all 7 revenue bands.
Waterproofing by revenue band
| Metric | $1M–$5M | $5M–$10M | $10M–$25M | $25M–$50MModeled | $50M–$100MModeled | $100M–$500MModeled | $500M+Modeled | CFOS target at $1M–$5M |
|---|---|---|---|---|---|---|---|---|
| Overhead | 17% | 16% | 15% | 14% | 13% | 11% | 10% | 16% |
| Gross margin | 26% | 27% | 28% | 29% | 31% | 32% | 34% | 28.5% |
| Net profit | 9% | 11% | 13% | 15% | 18% | 21% | 24% | 12.5% |
| Metric | $1M–$5M | $5M–$10M | $10M–$25M |
|---|---|---|---|
| Overhead | 16% | 15% | 14% |
| Gross margin | 28.5% | 29.5% | 30.5% |
| Net profit | 12.5% | 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: Waterproofing. 2026. Sulphur Prairie Operations, LLC. https://runoncfos.com/trades/waterproofing. 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.
5 problems specific to waterproofing
You sheet the wall in month two, then plumbing and electrical put a couple hundred holes through it. Crew is on site, membrane is on the ground, and the envelope consultant flies in Thursday. The foundation was wrapped and buried last March, and the retainage is still with the GC. You're back at the same building for the eighth time on one square foot number.
Each one below points at the item, the unit, the clock, or the party that makes it a waterproofing problem, and it says which step fixes it.
| Mechanism | Why it's specific to this trade | Step |
|---|---|---|
| Every Hole Through Your Membrane Comes Back To You | Most trades install into a finished condition and their damage becomes somebody else's repair line. Waterproofing installs into a raw condition and then lives underneath every trade that follows, with a single-source warranty that makes the original applicator the only party legally allowed to touch it. First in and legally exclusive is the combination that turns another sub's drill bit into your labor hour. | Project management |
| Four Clocks Decide When You Can Start, Cover, Or Bill | Plenty of trades wait on inspection. Waterproofing waits on inspection before it can start, again before it can cover its own work, and again before the deck above it can proceed, with a third-party consultant who bills by the trip and flies in from somewhere else. If you miss the observation window, completed and buried work gets dug back up, and almost no other scope has that penalty. | Job cost structure |
| You Finish In Month Two And Get Paid In Month Twenty Six | Every sub deals with retention, but most of them are still on site while it accrues and finish near the release date. Below grade waterproofing is complete, covered, and invisible in the first quarter of a multi-year job, so your cash is tied to punch work on floors that didn't exist when you left. The warranty start date compounds it, because the clock on your longest liability is set by a certificate you don't sign. | Monthly cadence |
| You Priced Two Trips And You Made Eight | A trade that comes to the site once and leaves can spread mobilization across the whole contract. Waterproofing returns to the same address five to eight times over two years, at the GC's convenience, with a piece of equipment that has a fixed daily cost floor and no partial setting. That's a unit-of-measure mismatch specific to this scope, and one contract line hides all of it. | Equipment cost basis |
| Twelve Pallets Wait In The Yard With A Clock On Each One | Other trades buy commodity material they can hold indefinitely or divert to the next job. A proprietary warranted system can't be shopped or substituted, and liquids and primers can't be stored past their date, so a schedule slip converts inventory directly into expense. The system requirement is what removes your ability to buy short and reorder. | Software and bookkeeping alignment |
Waterproofing against the other 47 trades
| Metric | Waterproofing | Envelope and structure average | All 48 average | Rank |
|---|---|---|---|---|
| Overhead | 17% | 15.1% | 15.1% | 45th of 48 |
| Gross margin | 26% | 22.8% | 22.1% | 3rd of 48 |
| Net profit | 9% | 7.6% | 7% | 2nd of 48 |
Waterproofing sheds 7 points of overhead between $1M–$5M and $500M+, against 6.3 for envelope and structure as a group. Inside that group, Curtain wall and glazing, Waterproofing all keep 9%, the most in the group, and Framing runs the leanest overhead at 13%. The first of those is this trade.
Other envelope and structure trades
What owners ask
What overhead should a waterproofing contractor run?
Waterproofing runs 17% at $1M–$5M, as a percentage of revenue, which ranks 45th of 48 and puts it in the bottom of the table. By $500M+ it reaches 10%. That is 1.9 points above the envelope and structure average of 15.1%. The CFOS target at $1M–$5M is 16%. The CFOS target is one point leaner than your trade's industry average at your revenue.
What gross margin should a waterproofing contractor run?
Waterproofing shares its gross margin figure with 1 other trade at this revenue, which is what the published data resolves to. It averages 26% at $1M–$5M and 34% at $500M+, as a percentage of revenue. That is 3.2 points above the envelope and structure average of 22.8%. The CFOS target at $1M–$5M is 28.5%. 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 waterproofing contractor run?
Waterproofing shares its net profit figure with 5 other trades at this revenue, which is what the published data resolves to. It averages 9% at $1M–$5M and 24% at $500M+, before taxes, as a percentage of revenue. That is 1.4 points above the envelope and structure average of 7.6%. The CFOS target at $1M–$5M is 12.5%. 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 waterproofing business run?
Owners usually mean net profit when they say profit margin, and for waterproofing at $1M–$5M that's 9%. Gross margin is a different number, 26%, and it's what's left after job costs but before overhead. Overhead is the 17% between the two. A small waterproofing business holding 9% net is at the published figure for its size, and the CFOS target at that revenue is 12.5%.
Does waterproofing get more profitable as it grows?
Overhead is the number that moves. Waterproofing sheds 7 points between $1M–$5M and $500M+, which is in line with the 6.3 points envelope and structure 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 waterproofing rank against the other trades?
Waterproofing ties 1 trade in envelope and structure on net profit, all at 9%. Nothing publishes more, and Curtain wall and glazing matches it. Framing runs the leanest overhead at 13%. Gross margin ranks 3rd of 48 and overhead ranks 45th.
That's the industry average and the CFOS target for waterproofing 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 waterproofing 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.