Originally published in January 2019. Last updated on January 17, 2025.
It can be challenging to make money as a contractor when projects last weeks or months, budgets are tight, and profit margins are thin.
But if you have good management skills and are willing to work hard, that challenge becomes much more achievable.
In this article, we’ll outline different services that can help you make money—and how you can run your business as efficiently as possible to max out your profits.
How do contractors make money?
As a general contractor, there are lots of opportunities for you to make money, starting with the services you offer. Consider these 8 different ways to make money as a contractor:
1. Residential construction
Partner with developers to construct single-family and multi-family homes, depending on what your skill set is. With the right developer, you could find yourself fully booked for the next several years.
You could also find that flipping homes is a good fit. You have the construction knowledge and industry insights to do the job well. All you need is startup capital to pay for the first house and your renovation materials.
2. Commercial construction
If you’re qualified to do commercial construction, you can make money building commercial, retail, and industrial spaces. You’ll have a bigger budget to work with and it’ll keep your team busy for months.
Do your best work and build a good relationship with the company that hires you. This can lead to future work and plenty of money for your business.
3. Renovations
Instead of new construction, some clients renovate their homes or commercial facilities to make better use of the space. This involves adding or updating the walls, electrical, plumbing, and finishes.
With renovations and retrofitting, you can earn even more money if the client requests a change order. This changes the scope of the project, and you’re paid for the time it takes to update your plans.
4. Repairs and maintenance
Both residential and commercial customers may need ongoing maintenance and repairs, whether it’s for the building’s structure or for its plumbing, electrical, and HVAC systems.
You can provide these services to clients who need ongoing maintenance. Or, if you work with a real estate developer, you can provide these services to home buyers as part of their warranty.
This is an excellent source of recurring construction work, which means a constant stream of revenue for your business.
5. Project management
Not everyone knows how to build an office building or renovate a home—but many will attempt it anyway. You can help with that by offering construction project management services to clients.
Use your organizational skills to keep the project moving forward and coordinate the client’s subcontractors as needed. It’s less time and money than a standard general contracting job, but you may find it less stressful, too.
6. Design consultation
As a general contractor, you have deep expertise in designing and planning spaces for your clients. This is a valuable offering that you can provide as a standalone service.
It’s especially useful for extending the reach of your service area. You can work with clients in other cities and states to provide plans that they can bring to a local contractor for construction.
If possible, pair this service with remote project management. That way you can ensure the job is completed to your satisfaction—without having to be on site.
7. Subcontracting
For lower-budget jobs, consider subcontracting tasks like plumbing and electrical to another contractor who can complete the work at a lower cost.
You can charge the client for the time it takes to supervise your subcontractors, which saves you time while earning money for your business.
You can also make money by subcontracting for another contractor. If you know another contractor is busy but you have room in your schedule, see if they could use another sub on site.
8. Online courses and workshops
Depending on how long you’ve been in the contracting industry, you might be able to share your knowledge with others in the form of paid courses and workshops.
Simply create an online course and charge a one-time fee for access to your videos, or host regular workshops that handy homeowners can attend.
For example, you can share construction and maintenance guides, like how to patch a wall, install baseboards, and build a porch. Charging for this education creates passive income for your business with minimal effort.
17 tips for making money as a contractor
Even if you provide the best services in your area, you still need to ensure your contracting business is making a profit. The tips below can help with that:
1. Have a business plan
When you plan for profit from the start, you’re more likely to achieve it. So whether you’re starting a contractor business or you’ve been in business for years, you need a business plan.
This essential document helps set the direction for your company by defining details like your goals, ideal clients, competitors, and financial plan. Think of it as a strategy for ensuring your company’s success.
2. Know your numbers
If you want a profitable contractor business—and we know you do—you need good financial management practices like:
- Pricing your services for profit (don’t worry, we explain how to do this below!)
- Tracking cash flow to see how much money moves through your business each month
- Logging every expense so you can claim it as a small business tax deduction
- Sending invoices promptly as soon as the job is done
- Offering online payment options to ensure you get paid faster
- Improving payment collection rates by sending automatic invoice follow-ups
Jobber’s integration with QuickBooks gives you real-time information so you can track your business’s financial health. You can also use Jobber Copilot to analyze your expenses, revenue, quotes, and invoices.
3. Specialize in a particular service
If you offer a service that no other contractor provides, you can charge whatever rate you like (within reason) and attract clients who are interested in that service.
This could include electrical, plumbing, HVAC, painting, concrete, security system installation, and other trades that provide extra value for your clients.
Find your niche by understanding your ideal customer, researching your competitors, and figuring out where there are gaps in your local market. From there, you just have to explain to clients how your services will make their lives better.
4. Upsell your services
In today’s competitive market, you need every advantage to win jobs and stay profitable. One of the easiest ways to differentiate yourself and increase profits is to upsell your clients on relevant services.
Let’s say you offer maintenance services following an installation project. If you think a client will be interested in ongoing maintenance, this is a great way to increase your profits and the value the client receives.
How much, on average, am I making per customer?
If you’re seeing over a trending period, that dollar amount is going down, you’ve got a problem. Does that mean maybe I’m not doing as many upsells and add-ons to my sales?
5. Bid on the right jobs
It’s tempting to bid on every contracting job when you’re trying to make more money. But not every job is the right fit for your skill set or your business.
Only apply for projects that match your expertise or fit within the company’s goals. Your time is limited, so focus on jobs that interest you and will keep your business profitable.
6. Price your projects accurately
Setting the right prices is one of the most important considerations for making money, so be sure you’re doing it properly. Here’s how to price a job as a contractor:
- Calculate overhead expenses: Add up your overhead expenses—that is, the indirect costs of doing business throughout the year. Your business insurance, building rent, employee salaries, and vehicle payments would each qualify as an overhead cost. Divide this amount by the number of hours you work each year, and you’ll get your hourly overhead rate.
- Estimate the job cost: Your direct costs will vary depending on the type of construction job. Work with the client to figure out the scope of work, then calculate your project labor and material costs.
- Mark up your costs: Add your general contractor markup percentage to your costs to ensure you’re including a strong construction profit margin. It’s common for contractors to use the 10-and-10 rule, meaning 10% of the bid is overhead and another 10% profit. You’ll need to use a markup percentage of 25% to achieve that goal.
Your prices need to be competitive so customers will choose your services, but your rates won’t be the same as your competitors’. Every construction company operates differently, and their prices reflect that.
You don’t know what somebody’s debt situation is. You don’t know what they pay their people.
You’re stealing from your family if you’re pricing your work based on 90% of common contractors out there who don’t know their numbers.
If your rates are higher than average, tell your clients why. You might offer better customer service, or maybe you have more skilled employees. Explain your reasons and turn a potential weakness into a strength.
And if a potential customer says you’re too expensive, don’t worry about it. You’ve priced your services fairly based on your overhead, labor, materials, and profit margin, so they may not be the right client for you.
Pro Tip: Since contracting jobs often have a high dollar value, you can win more work by offering your clients consumer financing through Wisetack for larger projects.
7. Analyze past job data for profitability
Dig into past jobs to understand where you made and lost money. Did you make any mistakes you could learn from? Or did you do something well that you should include in future jobs?
Every project comes with a lesson to learn. It’s never too late for you and your bookkeeper to begin back costing, so start with your last job and work your way backward from there.
One way to do this is with job costing software like Jobber. It calculates your profitability for every project based on your tracked costs, which helps you estimate future job costs more accurately.
8. Plan out projects before starting
Before you set foot on the job site, you need a concrete plan in place with clear timelines. Schedule time for each stage of the project. Allow extra time for possible delays, too.
For example, if you’re building a new home, it’s not enough to just note the foundation completion date. Include the time it takes to excavate, pour concrete, and let the concrete dry, even in bad weather.
This also keeps your customers happy because they know exactly when they’ll see certain milestones—and whether you’ll complete the work on time.
READ MORE: How to avoid scope creep
9. Use lean construction practices
Look for ways to work more efficiently, cut costs, and reduce waste on every job.
For example, you could buy commonly used materials in bulk at reduced rates, keep an eye out for sales at larger retailers like Home Depot, and negotiate deals with your preferred suppliers.
In addition to saving money for your business, you’ll also be able to pass on cost savings to your clients and offer more competitive rates.
10. Look for process efficiencies
With any contracting and construction business, you can save money by running a more efficient business. Search for ways to improve your processes, like:
- Using a contractor estimate template when you’re quoting projects
- Sending customer notifications before, during, and after a job
- Sending a contractor invoice when a project is finished
- Automatically following up on outstanding quotes and invoices
- Asking for reviews after every job using Jobber’s automatic review collection in Jobber
11. Build relationships with your clients
No matter how great your work is, you’ll be more likely to win new jobs if you’re on good terms with your client. These are a few ways to keep your clients happy and make more money:
- Provide a self-serve customer portal where clients can easily find job details and documents
- Use Jobber’s customer communication features to keep clients up to date with the job
- Use a general contracting CRM to remember important details about the client, from their door code to their dog’s name
- Send a thank-you card after a job is complete (or a gift for larger projects)
All of these things can make a client think positively about your construction business. As a result, they may decide to use your services again in the future or refer you to someone else.
12. Use construction contractor software
Contractor software like Jobber makes it easy to run your business from the driver’s seat of your truck, all using your phone or tablet. With one app, you can:
- Offer online booking through your website for client consultations
- Send professional quotes with optional line items for upsells and add-ons
- Schedule work and manage your teams’ calendars
- Access information about jobs and clients with Jobber’s client manager
- Send invoices as soon as the job is complete with just one click
- Get paid for your work automatically, in person, and online using Jobber Payments
You can also use Jobber’s reporting features to track your business’s profitability, see which jobs are most profitable, and find new ways to be efficient.
I remember the days where my CRM was the scrap of wood I found on the job site. That’s just not going to cut it.
You’ve got to have something that helps your efficiency, helps you keep things together in one place.
13. Manage subcontractor relationships
In addition to your clients, you need to work well with subcontractors. Communicate clearly, tell them exactly what you need, agree on fair rates, and send payment on time.
Long-term relationships with qualified subcontractors can help you finish jobs faster and do better work. They might even send work your way or help you win bigger projects.
14. Create a safe work environment
You can cut costs by avoiding employee injuries on the job—and the workers’ compensation claims that come with them. You may even reduce your premiums for general liability insurance.
Use custom job forms to build a safety checklist for every task that carries some level of risk. This reminds your team to wear their PPE, follow safe practices, and steer clear of danger.
READ MORE: 5 job safety analysis forms to share and use on the job site
15. Train your employees
You’ll need to train employees to use all your new processes correctly and efficiently. This will help the entire team work faster and reduce the amount of time you’re spending on jobs.
You can also offer skill development and other training programs to help employees grow their careers. By investing in their professional development, you’ll encourage them to stick around long-term.
This helps cut down on hiring costs, and you’ll spend less time getting new hires up to speed.
16. Advertise your contractor business
Once you’ve improved your business processes, you’ll need to advertise your services and win more paying clients. Here’s how to get more work as a contractor:
- Build a website with information about your services, along with an online booking form that lets clients request a consultation
- Make it easy for potential clients to find you online using SEO for contractors
- Set up profiles on social media platforms where your ideal clients spend time
- Use lead generation sites for contractors like Angi and Thumbtack
- Attend industry networking and educational events like Jobber Summit
READ MORE: How to get more contracting jobs
Take care of the things you have control over. You call your customers, you prospect. All these things combined are going to help you be more profitable.
17. Keep up with changing industry trends
There’s money to be made in new ideas and technology. Stay on top of construction industry trends to see what your customers are looking for and offer those services accordingly.
This includes money-making trends like:
- Sustainable construction (e.g., solar panels, water-saving fixtures)
- Modular construction using prefabricated rooms that are assembled on site
- Home automation (e.g., lighting, heating, security)
You can keep up with these trends by listening to podcasts like Masters of Home Service, attending industry events like Jobber Summit, and joining the Jobber Entrepreneurship Group on Facebook.
Frequently asked questions
How much does a general contractor make?
A general contractor’s wages vary depending on your experience level, your rates, and the area where you work.
A less experienced laborer or construction worker might make a median wage of $44,310/year, while an experienced construction manager could earn around $104,900/year.
What type of contractor earns the most money?
Specialized contractors earn the most money, as a general rule. According to the Bureau of Labor Statistics, these are some of the highest-earning contractor types:
- The average salary for HVAC contractors is $57,300/year or $27.55/hour.
- Plumbing contractors and pipefitters typically make around $61,550/year or $29.59/hour.
- Electrical contractors have a median wage of $61,950/year or $29.61/hour.
Is a general contracting business profitable?
Yes, a general contracting business can be very profitable—as long as you apply a healthy profit margin (at least 10%) on every job. This lets you reinvest money back into the business.
Having a general contracting company can also be profitable when you quote jobs accurately, look for efficiencies in all of your processes, and advertise your business to get more leads.
What type of services can I offer as a contractor?
There are a number of services you can provide customers as a contractor. It all depends on what expertise you have and what you enjoy doing. Common contracting services include:
- Residential construction
- Commercial construction
- Renovations
- Repairs and maintenance
- Project management
- Design consultation
- Subcontracting
- Online courses and workshops
There are also different types of specialty contracting work, like HVAC, plumbing, and electrical. However, you’ll need in-depth experience and on-the-job training before you can provide these services to clients.
Do I need a license to make money as a contractor?
Some states require you to have a general contractor license or specific permits before you can provide services to paying clients. For example:
- In Maryland, you’ll need a home improvement contractor license, a construction license, or home builder registration, depending on the type of work you’re doing.
- If you’re doing work in Wisconsin on a residential dwelling that requires a building permit, you need to be certified as a dwelling contractor by the Wisconsin Department of Safety and Professional Services.
- While you don’t need a contractor’s license in Pennsylvania, you have to register as a home improvement contractor with the Attorney General’s Office if you do residential jobs with a total value of $5,000 or more per year.
Ready to start making more money?
Now that you know how to make money as a contractor, you’re ready to start doing it. Just make sure to quote your prices accurately, look for efficiencies in every job, and treat your clients right.
Still want to learn more? Find out how to make money in construction and remodeling.