What profit margin should a contractor bid?

Net profit of 8% to 15% is common for general contracting, with markup on the job often 20% to 50% to cover overhead and leave profit. Remember markup and margin are not the same: a 50% markup on cost is about a 33% gross margin. Smaller specialty trades often run higher.

What win rate should I expect on bids?

Winning every bid usually means you're priced too low. A healthy close rate for qualified leads is often 30% to 50%. If you win almost everything, raise prices; if you win almost nothing, your leads may be unqualified or your follow-up is weak, not your number.

Should I charge for estimates?

For quick quotes, usually no. For detailed bids that require measuring, design, or material takeoffs, a refundable estimate or design fee filters out tire-kickers and pays for your time. State up front whether the estimate is free so there's no friction.

How to bid contractor jobs without losing money

Q: How do you bid a contractor job?

Estimate materials, then labor hours at a loaded labor rate, then add overhead as a percentage and a profit margin on top. The formula is materials plus labor plus overhead plus profit. Bidding from a gut feel is the fastest way to win jobs that lose money.

To bid a contractor job, build the number from materials, plus labor hours at a loaded rate, plus overhead as a percentage, plus profit on top — in that order, every time. A gut-feel bid is how contractors win jobs that cost them money. The four-part formula takes longer but it's the difference between a busy business and a broke one.

Below is the step-by-step method, the markup-versus-margin math people get wrong, the win rate that signals healthy pricing, and where bidding stops being your real constraint.

The four parts of every bid

1
Materials. A real takeoff with current prices, plus waste factor and a markup to cover handling and warranty.
2
Labor. Estimated hours times a loaded labor rate that includes wages, taxes, insurance, and burden — not just the hourly wage.
3
Overhead. Your trucks, tools, office, and admin spread across jobs as a percentage so every bid pays its share.
4
Profit. Added on top of a fully covered cost — the reason you're in business, not an afterthought.

Markup versus margin, and the win rate to watch

→ They're not the same number. A 50% markup on cost is about a 33% gross margin. Confusing them quietly erodes profit on every job.
→ Aim for healthy net. Net profit of 8%–15% is common for general contracting; specialty trades often run higher.
→ Don't win every bid. A 30%–50% close rate on qualified leads is healthy. Winning everything means you're too cheap.
→ Follow up fast. Many bids are lost to silence, not price. The contractor who answers and follows up first usually wins.

When bidding isn't your real bottleneck

If your bids are solid but the business is flat, the problem may be upstream of the estimate. You're fine as you are when:

• You have all the qualified leads you can bid and close.
• Your win rate is healthy and your margins hold.
• You're not chasing growth or another crew.

But if you're winning a high share of the bids you give and still not busy enough, the constraint is lead flow — getting found and getting asked to bid — not the formula.

More bids to win starts with more leads

A great bidding method only pays off if you're getting asked to bid. We build contractor sites that bring qualified requests and answer fast so fewer leads slip to silence. Here's what contractors say.

We don't post stock testimonials. On a 15-minute call we screen-share the real dashboards behind our own businesses — live leads, rankings, and the exact page that produced each one. See the proof →

Plans start at $249/mo for a hand-built site plus AI lead capture and hosting, $597/mo with the SEO content engine and lead attribution, and from $1,750/mo for the full CRM and reputation stack. Month-to-month, you own it, one contractor per market. We run our own cleaning and HVAC companies on the same stack. See contractor website design, SEO for contractors, and the AI receptionist.

Common questions

How do you bid a contractor job?

Materials plus labor hours at a loaded rate plus overhead plus profit. Build the number, don't guess it.

What profit margin should I bid?

Net profit of 8%–15% is common for general contracting; specialty trades often run higher. Remember a 50% markup is about a 33% margin.

What win rate is healthy?

Around 30%–50% on qualified leads. Winning almost everything means you're too cheap; winning almost nothing points to lead quality or follow-up.

Winning your bids
but not busy enough?

Send your company name and metro — we'll confirm your market is open and build a working demo within 48 hours. Free, no card, no commitment.

Prefer email? [email protected]