How Much Does it Cost Remodelers to Do Business?

Business Management

A newly released NAHB study shows that the average gross profit margin for remodelers rose in 2018 to 30.1% — which was the highest it has been in nearly 30 years. Meanwhile, the average net profit margin in 2018 (5.2%) was essentially unchanged from the years prior, largely due to higher operating expenses.

NAHB predicts that over the next few years, remodeling expenditures will continue to grow but at a more gradual pace. These findings and more are included within NAHB’s 2020 edition of the Remodelers’ Cost of Doing Business Study. The report is published periodically to help remodelers and general contractors better gauge how their businesses stack up against the competition.

“The new version of this publication, offers remodelers a great way to benchmark their business financials in comparison to other similar businesses across the country,” said NAHB Chairman Dean Mon, a home builder and developer from Shrewsbury, N.J.

To conduct the study, NAHB’s economics and business management experts collected and analyzed the financial statements for fiscal year 2018 from thousands of remodelers across the country. The study provides detailed information on important indicators, including:

  • Gross and net profit
  • Assets and liabilities
  • Owners’ equity
  • Financial ratios

The analysis also compares remodelers’ performances based on business model, such as general remodeler versus design-build remodeler.

The Remodelers’ Cost of Doing Business Study, 2020 Edition is available for purchase* at Print editions are $79.99 for NAHB members, $149.99 for non-members. E-pub versions are $55.99 for NAHB members, $89.99 for non-members.

For additional insights about the challenges of adapting to today’s evolving business environment, all housing industry professionals — and especially remodelers — are encouraged to tune in on Wednesday, May 13, for the “Remodelers REBOOT” virtual event. Various discussions will take place from 9:30 a.m. to 5 p.m. ET. Registration is open to all, and free for NAHB members. Recordings will also be available following the event for those who register.

*During the month of May, all purchases of this study can receive a 20% discount by entering discount code NWREM20 at checkout. The discount cannot be applied to prior purchases or combined with other discounts.

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