Less than 5% of contractors break $500k in revenue. Learn how to scale your business from startup to $5M with strategies for pricing, lead generation, and more.

Published July 8th, 2025

By Stephanie Day

Ready to join the 5% of contractors who build profitable, long-lasting businesses?

Most contractors stay stuck trading hours for dollars. Tom Reber, who’s coached thousands of contractors through The Contractor Fight, estimates that 95% of contractors never make more than $500,000 a year. So how do you join that small group that breaks through?

The difference isn’t talent or luck—turning a craftsman into a CEO requires dedication and hard work.

The opportunity has never been better. The construction industry desperately needs 723,000 new workers annually, according to the National Association for Home Builders’ fall 2024 Construction Market Labor Report. That shortage means customers are willing to pay premium prices for contractors who show up, communicate clearly, and deliver on promises.

So why aren’t more contractors cashing in? They’re thinking like tradespeople, not business owners.

Why most contractors stay stuck

There are valid reasons why growth may feel impossible.

The craftsman trap is real. You started this business because you’re good with your hands, not because you dreamed of reading P&L statements.

And you’re probably not charging enough. Reber reports that almost every contractor he coaches is undercharging—but construction doesn’t have to be a low-margin business. Christian Muntean, who helps entrepreneurs build scalable operations, sees clients regularly hitting 10–20% margins after optimizing their fundamentals.

“You’ll hear all over the construction industry that you can only have 4% to 6% margins,” he says. “It’s not true at all.”

Another growth killer: owners who won’t step back from day-to-day work. When you fill your time personally estimating jobs, managing crews, handling customer complaints, and chasing payments, there’s no time left to build the business.

Over-involved owners might even be their own bottleneck. Can you count on your crew to deliver quality work? Do you micromanage? You can’t grow if you don’t trust your team.

The result? You’re not running a business—you’re stuck in a job with overhead and a demanding boss (yourself).

Start selling to break the growth barrier

Contractors “don’t have jobs if they don’t have leads,” Reber says. “And if you don’t have leads you can’t sell anything. You have to sell like your life depends on it, because it does.”

Here’s your game plan for growth:

1. Price for profit

Reber recommends aiming for a 50% gross profit. “If it costs you $1 to produce something, you should charge at least $2,” he says.

Sound impossible? Consider Anthony, a contractor Reber coached. He was making $300K annually and barely paying himself $1,000 a month because he “didn’t know how to price his work,” Reber says.

Within one year of adjusting his pricing, he hit $2.7 million at 50% profit. The next year: $3.4 million. Then he sold the business for around $12 million.

Here’s how to make the shift:

Calculate your true daily overhead (everything from truck payments to insurance)
Add up all job costs (materials, labor, permits, subs)
Apply Reber’s markup formula for 50% gross profit
Stop apologizing for charging what you’re worth.

Smart pricing changes everything. If you’re currently struggling to break even, proper margins mean you could hit the same profit with half the work.

Don’t forget to add Acorn Finance’s contractor financing to your toolkit. Our options are 100% free for the contractor, and your customers will enjoy a pain-free application with quick approval—making it easier for them to finance their dream project.

2. Build your lead generation machine

You can’t scale on word-of-mouth alone. Build multiple lead sources to keep work flowing. It’s not as hard to find leads as you might think—start with your referral network. Look for:

Interior designers who need contractors for their clients
Realtors handling fixer-uppers
Plumbers who cut holes that need patching and painting
Property managers overseeing renovations

Next, leverage social media.

“I’ve sold millions of dollars just by telling stories on social media,” Reber says.

Go live from a job site. Explain the odd electrical work you found behind the walls. Showcase a bathroom transformation. Your expertise builds trust.

One of Reber’s other favorite lead-builders: unexpected intentional touches, or UITs. Every day, send three personal messages to past customers or dead leads.

For example: “Hey Sarah, it’s Mike. We remodeled your kitchen last spring. Just wanted to check in and see how it’s holding up.”

Three messages a day, five days a week equals 700–800 touches each year. Reber’s data shows a 5% return rate—so 10 minutes of daily outreach could earn you 35-plus new projects.

3. Create bulletproof handoffs

Your charming estimator sells the job, makes promises, builds rapport. Then your gruff foreman shows up knowing nothing about what was discussed. The client feels abandoned, and you’re scrambling to make things right as your margins evaporate.

“Money gets wasted when the handover isn’t good,” Muntean says.

Create a formal handoff process:

Estimator and project manager meet before every job starts
Review the contract line by line
Discuss client hot buttons and promises made
Create a shared project plan
Document everything in your customer relationship management (CRM) tool.

Don’t forget about pre-construction planning. Most contractors wait until the start date to think about logistics, but by then, it’s too late. Order long-lead materials weeks in advance, line up subs with written commitments, and verify permits are pulled.

Muntean’s clients who tighten their handoff and pre-work processes grow their margins by 5–10%. Plus, their workers are less stressed and their clients are happier. “These projects are done on time. There’s less friction and fewer questions or doubts on the part of the customer,” he says.

4. Know your numbers

“Most contractors don’t know their numbers,” Reber says. “They don’t know what it costs them each day to be in business.” Track these metrics religiously:

Daily overhead burn rate (fixed costs ÷ working days)
Gross profit per job (not just revenue)
Lead-to-sale conversion rate
Average job size
Sales needed to break even

Do the math: If overhead is $20K monthly and your average job nets $5K in gross profit, you need four jobs just to break even.

It’s time to start a new Monday ritual. At the beginning of the day, review last week’s numbers. Which jobs made money? Which didn’t? Why?

Don’t wait until year-end to discover you worked for free.

5. Invest in sales

You might see yourself as a craftsman, not a salesperson. But “the minute you open your business, you’re no longer a carpenter or a painter. You are a salesperson,” Reber says. “You are a business leader.”

If you have 10 leads weekly with a 20% close rate, you’ve landed two jobs. Improve that close rate to 30% and you’ll earn 52 extra jobs each year. If your average job size is $10K, that’s $520K in additional revenue from the same number of leads.

Your sales process isn’t optional. It should include:

Questions to weed out unqualified leads
A consistent presentation format
Specific scripts for common objections
A follow-up sequence for unsigned proposals

6. Hire before you’re desperate

When should you hire? Muntean has a simple answer: “When it’s costing you money not to grow.”

You’ve waited too long to hire if you’re…

Booked out 6-8 weeks
Turning down profitable work
Working 60-plus hour weeks
Hearing customer complaints about response time
Unable to take a day off without chaos.

Your first hire shouldn’t necessarily be another tradesperson. Reber insists most contractors wait too long to hire a bookkeeper—ideally one who knows how to work with contractors. Even 10 hours per week of a bookkeeper’s time saves dozens of your hours. Let them handle paying bills, sending invoices, and tracking numbers.

Next, hire a field crew so you can focus on the business. Muntean recommends starting with one or two trusted employees. But even if you can only afford one worker, that allows you to estimate while they work.

Once you’ve assembled a small crew, prioritize finding a working foreman who can run jobs, including managing the team and basic logistics.

Your 90-day growth sprint

Ready to grow? Here’s your action plan:

Month 1: Foundation

Price all new estimates at 50% gross profit minimum
Choose and commit to a CRM system that tracks leads, jobs, and profit
Start sending three UITs daily (set a phone reminder)
Track your actual hours and overhead for baseline data
Hire a bookkeeper who has experience working with contractors

Month 2: Systems

Document your complete sales process
Create a project handoff checklist
Build your referral partner list, aiming for 10 strategic relationships
Post one project photo or video weekly on social media
If you’re solo, hire your first helper

Month 3: Acceleration

Implement pre-construction planning for every job
Review numbers every Monday—keep that time sacred
Evaluate your first hire’s performance
Raise prices on any new estimates by 10%

The bottom line

Growing from a one-person shop to a $5M+ business means charging what you’re worth, building systems that work independently, and creating a continuous flow of quality leads.

Anthony went from $300K to $2.7 million in one year. Derek, another contractor Reber coached, jumped from $500K to $2.5 million in 12 months—not by swinging hammers faster, but by honing his business acumen.

The construction industry needs professional contractors who run scalable businesses. Your community needs quality tradespeople who’ll be around in 10 years. Your family needs you to build something sustainable, not just trade hours for dollars.

The only question: Will you be part of the 5% who break through, or the 95% who stay stuck?

P.S. When customers say yes to bigger projects but need payment flexibility, having financing options ready can be the difference between “let me think about it” and signing today. It’s one more tool that separates professionals from part-timers.