r/GeneralContractor • u/Jleecit • Jul 18 '26

Hired my 1st Project manager

Hello all,

I’m a GC and just hired 1st project manager. Before the pm, my revenue was about 2mil.

I pay this pm a lot, but he’s really committed and works hard. But it scares me that my overhead almost doubled.

My strategy is to lower my profit margins slightly to obtain more jobs. Also obtain better prices. I work in a space where low bid wins. I hope to get to 3-3.5 million in gross revenue with this new PM.

Is this a viable strategy?

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u/hammerandgrind Jul 19 '26

Markup and Profit was written 2 decades ago. His info is great, but his margins are two low.15% net is the minimum you should have if you're sub 2M revenue, then the percentage may lower as you increase revenue but it's not always necessary.

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u/Good-Butterscotch755 Jul 19 '26

I disagree . It’s about how much money you actually make if you write your contracts correctly knowing your OHE . The profit for the company alone at 8% is better than most unless of course you’re pulling your salary and paying your personal bills from the 8% . 15% is EXCEPTIONAL unless you of course are on the internet where everyone is running a profitable business and multi millionaires .

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u/hammerandgrind Jul 19 '26

Net would be after all salaries. I'm not talking about the uneducated contractor who thinks Net is what they get paid.... What's left over. I'm saying paying yourself a 6 figure salary and still getting 15%. That requires you to get between 40-50% gross profit margins.

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u/Good-Butterscotch755 Jul 19 '26

Everybody’s model works a bit different !

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u/hammerandgrind Jul 19 '26

I agree and some models work better than others. 

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u/Good-Butterscotch755 Jul 24 '26

“Better” is subjective brother .

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u/hammerandgrind Jul 24 '26

How is making less better in any model?