Profit margin

Profit margin is the percentage of revenue a business keeps after expenses. Ten to twenty percent is typical for service businesses.

Gross and net

Gross margin is revenue minus the direct cost of the work: materials and job labour. It excludes overhead such as rent, insurance, and administration. Net margin is what remains after everything.

Gross margin measures pricing. Net margin measures the business. Strong gross margin on every job still produces a loss if overhead grows faster than revenue.

Where to find this

Last reviewed 2026-07-29

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