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A RocketLevel piece for restoration owners and finance leads, backed by decades of experience in the trade. About a 6-minute read.
Ask a restoration owner their margin and many will quote a number off a job-costing report. The problem is that the report usually counts direct costs (labor, materials, equipment, subs) and stops there. It quietly leaves out the cost of actually running the company. When you load that back in, the real margin is a lot lower than the number on the screen, and the way you think about which work is "good business" changes.
The 2025 RIA Cost of Doing Business Report from the Restoration Industry Association (RIA), covering FY2024, puts average total overhead at 38.53% of revenue, up from roughly 36% the year before. That is on page 37, and the report is a free download from the Cost of Doing Business download page (checked September 25, 2026), so you can pull the same page yourself. Overhead labor alone, meaning estimators, accounting, coordinators, admin and sales, averaged 16.88% of revenue (page 38). That is a long way from the old "10 and 10" rule of thumb, ten percent overhead and ten percent profit, that a lot of owners still carry in their heads. Overhead crept up everywhere: software stacks, insurance, vehicles, office staff, accounts receivable (AR) and billing labor, compliance, marketing.
If your job-costing report shows a 45% gross margin and you are mentally treating that as profit, you are off by most of it. Subtract real overhead and the actual operating margin is a fraction of the gross. The report's authors flagged exactly this: publicized "high margins" in restoration usually reflect incomplete accounting, not unusual profitability.
The bottom line shows it too. The 2025 report's own summary, on page 23, is that nearly half the industry, 48%, still earns less than 10% net income, down from 52% in FY2023. The breakdown behind it, on page 22: 7% reported negative net income, 41% reported under 10%, 29% landed between 10 and 19.9%, and 23% cleared 20%. The direction is slightly up, but the bottom did not move: negative profitability held flat at 7%, which the report calls out as the number it expected to improve and did not.
The 2024 edition, reporting FY2023, had put average net profit before taxes at 3.8%. Those are two different editions of the same annual report, so keep the years attached when you quote them. Thin net margin is normal in this trade, which is the real reason a book stacked with small, slow-paying jobs leaves so little room to absorb a cut file or a rate change.
The costs that disappear from a typical job-costing view:
Until those are loaded in, you are comparing top-line gross margins rather than the true profitability of one kind of work against another, which is exactly the trap that makes owners misjudge commercial.