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Painting Contractors: Let’s talk about how to calculate your gross profit

Name: Painting Contractors: Let’s talk about how to calculate your gross profit
Uploaded: 2023-07-19T15:15:05+00:00
Duration: 36 s
Channel: Daniel Honan
Description: A painting contractor walks through the math on gross profit: if you charge $10,000 for a job with $3,000 in labor and $2,000 in materials, your gross…

19 Jul 2023 · 1 min

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A painting contractor walks through the math on gross profit: if you charge $10,000 for a job with $3,000 in labor and $2,000 in materials, your gross profit is $5,000, or 50% margin.

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Basically, gross profit is your total revenue minus any direct labor, so your painters, and any direct material costs. Price a job out for $10,000, let's say, a residential exterior repaint, and your direct labor, how much you're going to have to pay your painters, let's say, is $3,000, and then the paint materials, $2,000. So add those together, that's $5,000 total. So your gross profit on that job is basically the $10,000 minus the $5,000 of direct cost equals $5,000 leftover, which is your gross profit. So in this case, that is a 50% gross profit margin.