How Much Remodeling Service Owners Make: $120K Salary Plus Draws
You’re trying to see if a United States remodeling service can pay you without starving the job pipeline This five-year model covers revenue-to-income logic, listed margins, operating costs, reserves, and owner role, with $120,000 modeled as owner/general manager pay and extra draws only after business costs
Owner income$120kNet margin54%–83%Revenue for target pay≈$1.8MBusiness difficultyHard
Want the six remodeling income drivers?
1
Project Volume
$298K-$431M
More completed jobs drive the top line, and every extra project adds billable hours and markup.
2
Contract Value
$14.9K-$27.6K
Bigger average jobs lift take-home faster when you sell more whole-house and room-addition work.
3
Gross Margin
92%
Year 1 direct costs run at 8%, so tight estimating, markup, and change orders protect cash.
4
Lead Gen
$30K-$125K
Marketing spend grows while CAC drops from $1,500 to $800, so close rates decide how much of that spend turns into booked work.
5
Payroll Load
$320K-$870K
Payroll scales fast, so each new manager or carpenter seat has to produce enough billable work to cover itself.
6
Overhead
$104.4K
Fixed overhead sets the profit floor, so rent, insurance, vehicles, and admin have to stay lean for owner income to rise.
Want to test your remodeling owner income?
Owner income calculator
Estimate owner take-home and the target-pay gap from revenue, margin, costs, reserves, and target pay.
!
Planning note: Research-based planning estimate only. It is not guaranteed salary, tax advice, or owner distribution advice.
Want to check owner income in the Remodeling Service financial model?
Can a remodeling business owner make more by hiring crews?
Yes, a Remodeling Service can make more by hiring crews, but only if the added jobs cover payroll, supervision, rework, vehicles, and admin. In the model, payroll grows from $320,000 in Year 1 to $870,000 in Year 5 as project managers rise from 10 to 30 FTE, lead carpenters from 10 to 30 FTE, and junior carpenters from 0 to 40 FTE; revenue also rises from about $298,000 to $431 million. One line: crews scale, but only with tight schedule control and job costing.
When hiring helps
More crews raise job capacity
Project managers protect schedule control
Quality checks cut rework risk
Steady lead flow keeps crews busy
What can erase the gain
Payroll grows fast
Supervision adds overhead
Rework hurts margin
Vehicles and admin also rise
Which remodeling jobs are most profitable?
For Remodeling Service, the most profitable jobs are the ones with the best margin control and cash timing, not just the biggest contracts. Kitchens and bathrooms usually fit that better because they cycle faster, while whole-house renovations and additions raise ticket size but also add estimating, scheduling, permitting, and cash-flow risk. Year 1 modeled values are about $11,400 for kitchens, $5,400 for baths, $40,000 for whole-house work, and $26,250 for additions; by Year 5 they rise to about $16,800, $8,000, $66,000, and $42,550. Normalize the source’s service allocation percentages first, since they run over 100% before forecasting.
Fast cash
Kitchens: $11,400 Year 1.
Baths: $5,400 Year 1.
Faster cycles help cash return sooner.
Lower complexity supports tighter control.
Big tickets
Whole-house: $40,000 Year 1.
Additions: $26,250 Year 1.
More risk: permitting and scheduling.
Normalize allocations before forecasting.
How much revenue does a remodeling business need to pay the owner?
A Remodeling Service needs about $583,000 in Year 1 revenue to fund $120,000 owner pay before reserves, based on target-pay math; see What Is The Most Critical Indicator Of Success For Your Remodeling Service Business? for the KPI view. By Year 3, the same owner pay needs about $969,000 before reserves at an 82.5% contribution margin, while source revenue is about $1.56 million.
Pay Math
Add payroll, overhead, marketing, owner pay
Divide by contribution margin
Year 1 target: $583,000
Year 1 source revenue: $298,000
Watchouts
Materials can move fast
Subcontractor costs can squeeze margin
Debt and taxes reduce cash
Reserves must come before comfort
Key Takeaways
Collected revenue, not backlog, funds owner pay.
Gross margin depends on disciplined job costing.
Busy crews matter; idle hours destroy profit.
Reserve cash for overhead, callbacks, and delays.
Compare lean, base, and high remodeling owner-income scenarios
Owner income scenarios
Owner income swings a lot in remodeling because early years carry heavy payroll, marketing, and overhead, while larger project volume and higher contract values raise profit later.
Compare downside, core, and upside owner income cases across volume, pricing, staffing, and marketing load.
Scenario
Low CasePlanning assumptions
Base CasePlanning assumptions
High CasePlanning assumptions
Launch model
This is the downside case: a slow Year 1 ramp with limited booked work and weak owner income.
This is the modeled middle case: enough booked projects to cover fixed cost and turn positive.
This is the upside case: stronger volume, higher contract values, and much higher owner income.
Typical setup
The model uses 20 acquired customers, about $298,000 revenue, a $14,900 normalized contract value, $30,000 marketing, $104,400 fixed overhead, and $320,000 payroll.
The model uses Year 3 volume with 75 customers, a $20,761 average contract value, $75,000 marketing, $620,000 payroll, and about $485,000 EBITDA before reserves.
The model uses Year 5 volume with about 156 customers, a $27,592 average contract value, $125,000 marketing, $870,000 payroll, and about $265 million EBITDA before reserves.
Cost drivers
20 acquired customers
$14,900 contract value
$30,000 marketing budget
$320,000 payroll
$104,400 fixed overhead
75 customers
$20,761 contract value
$75,000 marketing budget
$620,000 payroll
Year 3 volume
156 customers
$27,592 contract value
$125,000 marketing budget
$870,000 payroll
Year 5 volume
Owner income rangeBefore owner reserves
-$222,000Downside plan
$485,000Core plan
$265MUpside plan
Best fit
Use this to stress test a slow start and a cost-heavy opening year.
Use this as the main case for hiring, cash planning, and owner draw targets.
Use this to test what happens if demand, pricing, and team capacity all stay strong.
!
Planning note: These scenario ranges are researched planning assumptions, not guaranteed earnings, salary promises, tax advice, or distributions.
Remodeling Service Core Six Income Drivers
Project Volume And Average Contract Value
Project Volume and Contract Value
Owner pay rises when completed and collected revenue rises, not when jobs are only signed. Here, the source math starts with marketing budget ÷ CAC: acquired customers move from 20 in Year 1 to about 156 in Year 5, while normalized average contract value rises from about $14,900 to $27,592.
That pushes completed revenue from about $298,000 to $431 million in the source model. The risk is simple: if production capacity, billing, or collections lag, backlog grows without cash, and the owner still can’t pay themselves from work that is not finished and collected.
Measure Volume, Then Cash
Track three inputs every week: qualified leads, closed projects, and collected revenue. One clean test is whether each booked job can move from estimate to deposit to progress billing on schedule. If not, signed volume is only paper revenue and won’t support owner draws.
Customers: 20 to 156
ACV: $14,900 to $27,592
Revenue: completed, collected only
Watch: backlog aging and billing delay
Use capacity checks before buying more leads. If crews, project managers, or subcontractors are already full, higher volume just stretches cycle time and cash flow. The goal is more completed jobs at higher contract value, because that is what funds overhead, reserves, and owner income.
Estimating Accuracy And Change Orders
Estimating Accuracy & Change Orders
Accurate takeoffs, allowances, contingencies, documented approvals, and job costing protect owner income because remodeling quotes can look profitable and still lose cash on extras. Project values range from $5,400 in Year 1 bathroom work to $66,000 in Year 5 whole-house renovation, so one missed scope item can wipe out the margin on a small job fast.
Here’s the quick math: on Year 3 revenue of about $156 million, each 1 margin point equals about $15,600. If change orders stay unpaid or the scope is vague, gross margin turns into free labor, slower cash collection, and less money left for overhead, reserves, and owner pay.
Lock Scope Before You Price
Track three things on every job: takeoff variance, change-order approval rate, and job-cost vs. estimate. If the estimate is built from bad quantities or weak allowances, the project can still look busy while profit leaks out through labor, materials, and callbacks. One clean sentence matters: no signed approval, no extra work.
Use a standard bid file with scope notes, exclusions, and contingencies, then compare actual cost to estimate by trade each week. Watch these inputs:
Takeoffs by room and trade
Allowances for finishes
Contingencies for unknowns
Signed change orders before work
Job costing by project
Lead Flow And Close Rate
Lead Quality Beats Lead Count
Qualified homeowner and property-manager leads drive income more than raw lead count. With marketing budget rising from $30,000 to $125,000 and CAC improving from $1,500 to $800, acquired customers can rise from 20 to about 156 if CAC holds. That only helps if those leads turn into collected projects, not just more estimates.
Lead gen also falls from 100% of revenue in Year 1 to 60% in Year 5, so weak lead quality can crush owner pay early. The real test is simple: does each channel produce booked, profitable work fast enough to cover selling cost, fixed overhead, and labor already tied up in the pipeline?
Track Qualified Leads, Not Just Traffic
Measure qualified lead rate, close rate, and CAC by channel. A cheap lead that never books is wasted cash. A higher-cost lead that closes well can still improve take-home income if it lands profitable work and shortens the gap between sales spend and cash collection.
Keep a weekly funnel: leads, qualified leads, estimates, wins, booked revenue, and cash collected. If spend rises but booked work does not, marketing is funding activity, not profit. Push budget toward the channels that hold CAC near $800 and keep conversion strong.
Overhead, Reserves, And Owner Role
Overhead, Reserves, And Owner Pay
For a remodeling firm, this driver is the cash load below the job level: $104,400 a year of fixed overhead, or about $8,700 per month, plus payroll that rises from $320,000 to $870,000. That payroll includes $120,000 for the owner/general manager, so higher pay only works when gross profit covers the extra staff and admin cost first.
Here’s the quick math: payroll increases by $550,000 a year, before the overhead line even moves. So the owner’s take-home is not just a draw decision; it depends on completed, collected jobs funding rent, insurance, vehicles, accounting, software, and the team needed to run projects. If cash is thin, fixed costs will eat owner pay fast.
Fund the reserve before raising draws
Build the reserve from real project cash, not hoped-for backlog. Hold money for warranty callbacks, billing delays, debt service, seasonality, and reinvestment before adding extra owner draws. What this estimate hides is timing: a profitable project can still create a cash squeeze if collections lag work in progress.
Track overhead at $8,700 monthly
Separate owner pay from profit
Measure payroll against billable work
Reserve cash before distributions
Review warranty and delay costs monthly
Gross Margin And Markup Discipline
Markup Discipline
Pricing remodeling jobs well means charging for permits, fees, tools, consumables, labor, materials, subcontractors, disposal, and contingencies. The source lists direct COGS falling from 80% to 50%, with gross margin shown at 920% to 950% before unlisted items. If one cost bucket is missed, that gap comes straight out of overhead and owner pay.
Markup is not income. If payroll burden, warranty callbacks, or change-order labor are not captured, the job can look profitable on paper and still starve cash. For a fixed-price remodel, the owner only gets paid after job costs are covered, so every estimate needs job-cost backup and a clear contingency.
Protect Margin on Every Estimate
Build each bid from real inputs: billable labor hours, hourly rate, material takeoff, subcontractor bids, permit fees, disposal, and a contingency line. One missed scope item can wipe out margin on a bathroom or whole-house job. Estimate versus actual should be reviewed after every project.
Track gross margin by job.
Price change orders before work.
Reserve for callbacks and waste.
Compare bid hours to actual hours.
Labor Model And Production Efficiency
Labor Mix And Crew Utilization
In remodeling, owner income rises only when paid hours turn into billable, collected work. Payroll in the source model rises from $320,000 to $870,000 as project managers, lead carpenters, junior carpenters, admin, and sales staff expand. That can protect quality and scheduling, but it also raises the break-even load on every crew hour.
Here’s the quick math: more in-house labor helps only if utilization stays high and rework stays low. Rework, callbacks, supervision time, and idle gaps between jobs all eat margin before the owner sees cash. Subcontractors can flex capacity, but their pricing and reliability can squeeze profit if labor turns into unplanned overtime or delayed billing.
Keep Hours Billable
Track utilization, paid hours, billed hours, and collected revenue on every job. The key input set is simple: crew hours, PM hours, rework hours, callback hours, and subcontractor cost. If those hours do not bill cleanly, payroll grows faster than owner take-home.
Utilization: billed hours divided by paid hours
Rework: hours that do not bill
Idle gaps: days between jobs
Subcontractor pricing: protect margin
Use a staffing plan that keeps core crews on steady work and brings in subcontractors only when the schedule or trade mix really needs them. If onboarding takes longer or defects rise, cash gets tied up in payroll before revenue is collected. That is where owner pay gets squeezed first.
