What is a good profit margin for a small business? Real margins across 70+ industries
Search answers say 5% to 10%. They describe net margin after the owner is paid. Small businesses for sale report a different number, and the gap between the two is the whole answer.
What is a good profit margin for a small business?
It depends on which margin you mean, and most guides blur two of them. A net profit margin of 5% to 10% is the figure search answers quote, and it is measured after the owner is paid. Owner-run businesses for sale report seller’s discretionary earnings (SDE) margin instead, which puts the owner’s pay back in. On that basis the median is 23.3%, and the middle half of 24,000+ US listings runs from 15.6% to 34.7% (Main Street Index, October 2026).
A good SDE margin is 15% to 35%. A good net margin is 10% to 15%. The same business can be both, and the conversion is one subtraction: SDE margin minus the market salary of the person running it, divided by revenue. At $1 million in sales a $75,000 salary removes 7.5 points. At $250,000 it removes 30.
The pages that rank for this question are written by payroll, banking and accounting software companies, and they share one shape: a definition of gross, operating and net margin, a table of net margins by industry, and a list of ways to improve. That shape answers the question for a business that pays its owner a salary and files a net profit. It does not answer it for the corner restaurant, the cleaning company or the pool route, where the owner takes whatever is left and calls it profit.
This page covers what those pages cover, then adds the number they lack. The Main Street Index holds 78,000+ de-duplicated businesses-for-sale listings across 29 marketplace sources. We kept the US-dollar listings on an SDE basis where revenue and earnings are both stated and sensible: 24,000+ listings in 74 industries with 100+ each. Every figure is a seller-stated asking-side number, not a tax return. For the ranking of industries by earnings, see our study of the most profitable small businesses. This page is about reading the percentage.
Gross, net and SDE margin: what each one counts
Every margin is a profit figure divided by revenue. What changes is which costs come out first.
| Margin | Formula | What is already taken out | Who uses it |
|---|---|---|---|
| Gross margin | (Revenue - cost of goods) / revenue | Materials, direct labor, product cost | Pricing and product decisions |
| Operating margin | (Revenue - all operating costs) / revenue | Rent, wages, marketing, insurance, software | Comparing efficiency |
| Net margin | Net profit / revenue | Everything above, plus the owner’s salary, interest and tax | Banks, investors, tax returns |
| SDE margin | (Net profit + owner pay + personal and one-off costs) / revenue | Everything except the owner’s pay | Buyers and sellers of small businesses |
Gross margin is always the highest of the four, because it ignores overhead. A 60% gross margin that turns into a 12% net margin is ordinary for a business with staff and a lease. If you only look at gross margin you will think you are doing well while rent and wages quietly take it all.
SDE is the one most guides leave out, and it is the one that matters if you run, buy or sell a small business. 99.5% of the 50,000+ US-dollar listings in our index state their earnings as SDE, and only 0.5% as net profit (Main Street Index, October 2026). Sellers use SDE because the buyer is going to be the owner, and the owner’s pay is the first thing the buyer wants to know about. Our guide to add-backs when buying a business covers what sellers are allowed to add to it.
The confusion shows up in how owners talk. In an owner forum thread where owners share their margins, the first reply to one owner’s number is a question:
“15% before or after you paid yourself? I do residential landscape construction and 12% is an acceptable year after my salary.”A small business owner
That one question is the whole distinction. Another owner in the same thread reports a 15% net margin while paying themselves in distributions, not a salary. Their 15% is a margin before the owner is paid. The landscaper’s 12% is after. They are different numbers with the same name, and comparing them tells you nothing.
One business, three margins
Take a business with $1,000,000 of revenue, run by its owner, who pays themselves $100,000. This is an illustration with round numbers, not a listing.
| Line | Amount | Margin |
|---|---|---|
| Revenue | $1,000,000 | 100% |
| Cost of goods | $400,000 | |
| Gross profit | $600,000 | 60.0% gross margin |
| Operating costs (rent, staff, insurance, marketing) | $380,000 | |
| Profit before the owner is paid = SDE | $220,000 | 22.0% SDE margin |
| Owner’s pay | $100,000 | |
| Net profit on the tax return | $120,000 | 12.0% net margin |
| SDE less a $75,000 manager | $145,000 | 14.5% adjusted net margin |
The same business is a 60% gross, 22% SDE and 12% net company. Ask “is 22% good?” and the honest answer is yes, it matches the 23.3% median. Ask “is 12% good?” and the answer is yes again, because it sits above the 5% to 10% guideline. Both are correct. The mistake is comparing a 22% SDE margin to a 5% to 10% net benchmark and deciding you are doing brilliantly, or comparing a 12% net margin to a 23% SDE benchmark and deciding you are failing.
What is a respectable profit margin?
For a main street business, a respectable SDE margin is 15% to 35%. That is the middle half of 24,000+ US listings, with the 25th percentile at 15.6% and the 75th at 34.7% (Main Street Index, October 2026). The median is 23.3%, from a median $772,000 of revenue and $173,000 of owner earnings.
Under 10% is thin: 9.6% of listings sit there, and the industries with the lowest medians are fuel stations, car dealerships and pharmacies. Above 35% is top quartile. Because the owner’s pay is inside SDE, a respectable net margin after a market salary is lower: about 13% at the median business, from ($173,000 - $75,000) / $772,000. That is a ratio of medians and an estimate, and it explains why a 10% to 15% net margin reads as healthy even though a 23% SDE margin is the middle of the market.
| SDE margin | Share of listings | How to read it |
|---|---|---|
| Below 10% | 9.6% | Thin. Fuel, vehicles, pharmacy territory |
| Below 15% | 22.9% | Bottom quarter |
| Median | 23.3% | The middle business |
| Above 20% | 60.0% | Most small businesses clear this |
| Above 30% | 33.0% | Top third |
| Above 40% | 18.5% | Top fifth |
| Above 50% | 10.5% | Top tenth |
| Above 60% | 6.2% | Owner is the labor |
| Above 70% | 3.5% | Routes and one-person practices |
| 90% to 99% | 0.5% | Check what costs are missing |
Is a 50% profit margin good, too much, or too good to be true?
A 50% profit margin means half of every sales dollar is left after the costs counted in that figure. At $400,000 of revenue that is $200,000. 10.5% of US listings state an SDE margin above 50%, so it is top-tenth, not unheard of (Main Street Index, October 2026).
It is not “too much”. Nothing caps a margin. The question is what is inside the number. A 50% SDE margin on $400,000 pays the owner $200,000 for running the business, which is a good job, not a 50% return on a passive asset. If the owner has to work full time to produce it, subtract what an employee would cost, and the margin that remains is the true one. If a seller claims 50% without explaining what the owner does, ask for the bank statements.
Margins that high sit where labor does not: routes with no staff, practices where the owner bills their own hours, and food trucks with one cook. They fall quickly once you add employees, which is the pattern in the next section.
Which business has a 50% profit margin?
Of the 74 industries with 100+ US listings, three have a median SDE margin of 50% or more: swimming pool services at 75.4% (n=342), accounting and bookkeeping at 50.0% (n=309) and food trucks and vending at 50.0% (n=250) (Main Street Index, October 2026). Laundry and dry cleaning (39.6%), software (39.1%), car washes (35.7%) and medical practices (35.2%) follow.
Two of those need a closer look. Pool service is split in two. 58.2% of its listings state a margin above 50%, but a quarter state under 26.9%, so the 75.4% median describes the route-style listings, with a median $157,000 of revenue, more than it describes every pool business. In bookkeeping, 49.8% of listings state a margin above 50%, with a median $470,000 of revenue and $220,000 of owner earnings. Our data cannot say how much of that is the owner’s own billable hours, so run the owner-pay adjustment before you treat 50% as profit.
Compare that with where the owner is not the labor. Restaurants, the biggest group, have a median 18.1% margin (n=1,919), and only 1.6% of restaurant listings state above 50%. For the buyer’s version of each, see buying a pool route, buying a bookkeeping business and buying a restaurant.
Is a 30%, 40%, 60% or 70% profit margin good?
All four are good on an SDE basis, and each one tells you something different. Read each as a position in the distribution above.
- 30%: top third. 33.0% of listings state more. Common in beauty, pet care, moving, cleaning and property management. It is not too high; see the 74-industry table below, where 17 industries have a median of 30% or more.
- 40%: top fifth. 18.5% state more. Laundry sits just under at 39.6%. After a $75,000 owner salary, a $500,000 business at 40% shows a 25% net margin.
- 60%: top 6.2%. Mostly routes, one-person practices and bookkeeping. Ask who does the work.
- 70%: top 3.5%. Pool routes are the main source. Check the revenue: a 70% margin on $100,000 of sales pays $70,000, before any employee.
The pattern across all four is the same. High margins in this data come from low revenue and owner labor, not from a better business model. The next section shows it directly.
Is a 100% profit margin possible?
Not as a business margin. Every business has some cost, even a software seller pays for hosting and a bookkeeper pays for software. Among US-dollar listings with positive revenue and earnings, 297 state earnings equal to or above revenue, and we treat those as data errors and exclude them (Main Street Index, October 2026). Another 0.5% of the listings we keep state a margin of 90% to 99%.
A reading above 90% almost always means costs were left out, or that a figure for earnings was placed in the revenue field. The one honest case is a pure pass-through, such as a licensing fee, but nobody buys that as a business of 100% margin; they buy it for the contract. If you see a claimed margin above 90%, ask for the revenue and expense lines and rebuild it.
How to convert an SDE margin to a net margin
Subtract the cost of replacing the owner. The formula is:
Adjusted net margin = SDE margin - (market salary for the owner’s job / revenue)
The salary term is what changes the answer, and it is a bigger share of a small business than a large one. Using a $75,000 salary as our assumption, not data, for a manager who would run the business in the owner’s place:
| Revenue | Points removed | A 40% SDE margin becomes | A 23% SDE margin becomes |
|---|---|---|---|
| $250,000 | 30.0 | 10.0% | Negative (-7.0%) |
| $500,000 | 15.0 | 25.0% | 8.0% |
| $1,000,000 | 7.5 | 32.5% | 15.5% |
| $2,000,000 | 3.8 | 36.2% | 19.2% |
| $5,000,000 | 1.5 | 38.5% | 21.5% |
A 23% SDE margin on $250,000 of sales is $57,500, less than the salary of the person doing the work. It is a job, not a profitable company. The same 23% on $1 million is a business that would still pay about $155,000 a year after a manager. This is why a bare percentage tells you almost nothing without the revenue next to it.
Two adjustments are not in the formula. SDE adds back owner perks and one-off costs, which a buyer should test, and it is before interest and tax, which a net margin is after. For how buyers test the add-backs, read our add-backs guide, and for what the earnings are worth, how much a business is worth.
Why margins fall as revenue grows
The median SDE margin drops from 44.3% for businesses under $250,000 of revenue to 13.5% for those above $5 million (Main Street Index, October 2026). Margin and size move in opposite directions across every band.
| Revenue band | Listings | Median SDE margin | Share above 30% |
|---|---|---|---|
| Under $250K | 3,400+ | 44.3% | 73.8% |
| $250K to $500K | 4,700+ | 28.8% | 46.5% |
| $500K to $1M | 6,700+ | 23.2% | 27.6% |
| $1M to $2M | 5,500+ | 20.0% | 17.8% |
| $2M to $5M | 3,100+ | 17.2% | 15.1% |
| $5M and over | 1,100+ | 13.5% | 9.8% |
Two forces explain it, and we can only show one of them. The first is arithmetic: at $200,000 of sales the owner’s own labor is most of the profit, so SDE margin is high, while at $5 million the owner is one salary among many. The second is structural: bigger businesses carry managers, leases and equipment. Our data cannot separate the two, but the salary table above shows how much of the gap the arithmetic alone can produce.
It also means the cheerful numbers in small-business guides are sampled from a different population. A guide that says a business can keep 30% or more is usually describing a solo operator. The businesses with employees, which are most of those people want to buy, mostly sit under 25%.
Margin inside an industry spreads as widely as it does between industries. The restaurant middle half runs from 12.5% to 24.4%, a 12-point gap, with a median of 18.1%. Knowing your industry average is a starting point; where you sit inside its range, and in your size band, is the actual benchmark.
Small business profit margin by industry
The table below gives the median SDE margin for every industry with 100 or more US listings, with the middle half of margins, median revenue and median SDE. The last column applies the $75,000 owner salary to the median figures to estimate an adjusted net margin. Sort by any column. For which industries pay owners the most dollars, and how fast, use the most profitable small businesses ranking; this table is for judging whether a given percentage is high or low.
| Industry | n | Median SDE margin | Middle half | Median revenue | Median SDE | After $75K owner pay |
|---|---|---|---|---|---|---|
| Swimming pool services | 342 | 75.4% | 26.9% to 78.4% | $157.0K | $102.0K | 17.2% |
| Accounting and bookkeeping | 309 | 50% | 38.4% to 63% | $470.0K | $220.0K | 30.9% |
| Food trucks and vending | 250 | 50% | 40% to 60% | $239.0K | $100.0K | 10.5% |
| Laundry and dry cleaning | 545 | 39.6% | 29.8% to 50% | $320.0K | $125.0K | 15.6% |
| Software and SaaS | 139 | 39.1% | 17.9% to 59.5% | $766.0K | $211.0K | 17.8% |
| Car washes | 141 | 35.7% | 27.5% to 50% | $697.0K | $200.0K | 17.9% |
| Medical practices | 323 | 35.2% | 24.6% to 49.1% | $1043.0K | $350.0K | 26.4% |
| Equipment rental | 139 | 34.8% | 21.1% to 48.7% | $704.0K | $207.0K | 18.8% |
| Events and venues | 149 | 34.2% | 21.6% to 45.8% | $537.0K | $158.0K | 15.5% |
| Business services (other) | 104 | 33% | 21% to 49.7% | $595.0K | $165.0K | 15.1% |
| Sports and recreation | 139 | 32.9% | 20.5% to 47.1% | $324.0K | $101.0K | 8% |
| Beauty services | 211 | 32.1% | 18.6% to 44.5% | $402.0K | $112.0K | 9.2% |
| Engineering services | 147 | 31% | 20.5% to 44.2% | $900.0K | $268.0K | 21.4% |
| Pet services | 251 | 31% | 20.5% to 49.3% | $295.0K | $87.0K | 4.1% |
| Marketing and advertising | 121 | 30% | 20% to 51.9% | $1083.0K | $261.0K | 17.2% |
| Moving and storage | 110 | 30% | 19% to 36.8% | $603.0K | $167.0K | 15.3% |
| Hair salons | 391 | 30% | 19.3% to 43.2% | $285.0K | $80.0K | 1.8% |
| Commercial cleaning | 399 | 29.4% | 22% to 40.1% | $525.0K | $164.0K | 17% |
| Environmental and waste services | 199 | 29.4% | 22.7% to 37.6% | $930.0K | $233.0K | 17% |
| Property management | 166 | 28.7% | 22.6% to 32.8% | $625.0K | $143.0K | 10.9% |
| Nail salons | 274 | 28.2% | 21.1% to 33.2% | $425.0K | $115.0K | 9.4% |
| Health services (other) | 319 | 28.1% | 19.9% to 39.8% | $889.0K | $250.0K | 19.7% |
| Catering | 112 | 28.1% | 16.9% to 44.9% | $528.0K | $141.0K | 12.5% |
| Amusement and attractions | 130 | 27.8% | 18.6% to 40.7% | $418.0K | $122.0K | 11.2% |
| Spas and massage | 228 | 27.7% | 16.5% to 37.6% | $545.0K | $124.0K | 9% |
| Landscaping and lawn care | 530 | 27.5% | 20.2% to 42% | $825.0K | $206.0K | 15.9% |
| Schools and tutoring | 147 | 27.4% | 20% to 40.2% | $351.0K | $95.0K | 5.7% |
| Building maintenance | 408 | 27% | 21.1% to 34.7% | $688.0K | $211.0K | 19.8% |
| Postal and shipping services | 145 | 26.7% | 21.6% to 33.1% | $485.0K | $127.0K | 10.7% |
| Metal fabrication and machining | 209 | 26.5% | 18.1% to 37.2% | $1281.0K | $328.0K | 19.8% |
| Gyms and fitness | 289 | 26.2% | 18.1% to 35.8% | $406.0K | $106.0K | 7.6% |
| Courier and delivery | 504 | 26.2% | 20.9% to 28.8% | $1738.0K | $418.0K | 19.7% |
| Florists | 123 | 25% | 18.5% to 33.5% | $377.0K | $94.0K | 5% |
| Childcare and nurseries | 243 | 25% | 17.9% to 33.6% | $725.0K | $158.0K | 11.4% |
| Carpentry and joinery | 102 | 24.8% | 16% to 38.6% | $842.0K | $290.0K | 25.5% |
| Electronics and appliance retail | 140 | 24.8% | 15% to 40.2% | $582.0K | $136.0K | 10.5% |
| Printing and signage | 295 | 24.6% | 18.5% to 34.4% | $668.0K | $157.0K | 12.3% |
| Trucking and freight | 253 | 24.6% | 16.9% to 33.4% | $1686.0K | $350.0K | 16.3% |
| Auto repair | 785 | 24% | 16.6% to 30.5% | $807.0K | $171.0K | 11.9% |
| Specialty food retail | 480 | 23.1% | 15.7% to 32.2% | $587.0K | $144.0K | 11.8% |
| Painting and decorating | 178 | 23% | 17% to 32.3% | $912.0K | $220.0K | 15.9% |
| Plumbing | 234 | 23% | 17.2% to 33.3% | $1093.0K | $233.0K | 14.5% |
| Home improvement (other) | 374 | 22.9% | 17.2% to 29.3% | $957.0K | $219.0K | 15% |
| Ice cream and dessert shops | 246 | 22.8% | 15.6% to 29.4% | $388.0K | $83.0K | 2.1% |
| Electrical contracting | 223 | 22.4% | 12.7% to 33.5% | $1651.0K | $300.0K | 13.6% |
| HVAC | 469 | 22.3% | 17.6% to 28.1% | $1109.0K | $231.0K | 14.1% |
| Ecommerce and online retail | 122 | 22.2% | 14% to 34.8% | $785.0K | $120.0K | 5.7% |
| Glazing | 166 | 21.8% | 16% to 29.4% | $1185.0K | $262.0K | 15.8% |
| General manufacturing | 291 | 21.5% | 15.5% to 31% | $1550.0K | $246.0K | 11% |
| Clothing and apparel retail | 268 | 21.4% | 14.2% to 30% | $529.0K | $115.0K | 7.6% |
| Food and beverage manufacturing | 148 | 21% | 13.6% to 31% | $960.0K | $180.0K | 10.9% |
| General contracting | 529 | 20.9% | 13.8% to 28.9% | $1597.0K | $316.0K | 15.1% |
| Bakeries | 361 | 20.8% | 15.1% to 28.6% | $650.0K | $134.0K | 9.1% |
| Cafes and coffee shops | 411 | 20.5% | 13.8% to 27.6% | $504.0K | $100.0K | 5% |
| Convenience stores | 189 | 20% | 13.1% to 27.1% | $720.0K | $123.0K | 6.7% |
| Care homes and home care | 404 | 20% | 15.6% to 26.9% | $1166.0K | $228.0K | 13.1% |
| Delicatessens | 118 | 20% | 14.4% to 28.8% | $600.0K | $125.0K | 8.3% |
| Seafood restaurants | 226 | 19.8% | 14.1% to 29.4% | $851.0K | $154.0K | 9.3% |
| Furniture and home retail | 181 | 19.6% | 14.1% to 25% | $920.0K | $209.0K | 14.6% |
| Roofing | 167 | 18.2% | 12.9% to 28.6% | $1675.0K | $361.0K | 17.1% |
| Restaurants | 1919 | 18.1% | 12.5% to 24.4% | $950.0K | $162.0K | 9.2% |
| Sporting goods retail | 127 | 17.9% | 13% to 25.1% | $729.0K | $131.0K | 7.7% |
| Pizzerias | 638 | 17.8% | 12.9% to 22.9% | $755.0K | $130.0K | 7.3% |
| Wholesale and distribution | 294 | 17.1% | 10% to 27.7% | $1653.0K | $275.0K | 12.1% |
| Flooring and tiling | 221 | 17% | 13% to 25.9% | $882.0K | $183.0K | 12.2% |
| Liquor stores | 382 | 16.9% | 11.4% to 23.5% | $900.0K | $150.0K | 8.3% |
| Bars and pubs | 497 | 16.6% | 11% to 23.4% | $1038.0K | $150.0K | 7.2% |
| Fast food and takeaway | 644 | 16.3% | 11.3% to 22.2% | $764.0K | $130.0K | 7.2% |
| Sandwich shops | 148 | 16.1% | 10.9% to 22.9% | $645.0K | $100.0K | 3.9% |
| Food and beverage wholesale | 539 | 16% | 14% to 18.6% | $576.0K | $96.0K | 3.6% |
| Grocery and supermarkets | 144 | 15% | 10% to 20.8% | $1704.0K | $260.0K | 10.9% |
| Pharmacies | 106 | 12.6% | 7.6% to 16.6% | $1591.0K | $235.0K | 10.1% |
| Car dealerships | 140 | 11% | 6.5% to 20% | $2468.0K | $282.0K | 8.4% |
| Fuel stations | 317 | 10.5% | 6.7% to 18.3% | $1800.0K | $180.0K | 5.8% |
Showing 74 of 74. Source: BigIdeasDB Main Street Index, USD listings on an SDE basis with 0 < SDE < revenue, cross-site duplicates removed, industries with 100+ listings, verified October 13, 2026. Seller-stated figures, not tax returns. The last column is (median SDE - $75,000) / median revenue, a ratio of medians and an estimate under our salary assumption.
Three groups stand out. The top is low-labor work: pool routes, bookkeeping, food trucks, laundry and car washes. The bottom is high-volume resale: fuel stations (10.5%), car dealerships (11.0%), pharmacies (12.6%), grocery (15.0%) and food wholesale (16.0%). In the middle sit the labor-heavy trades and restaurants at 17% to 25%.
Applying the owner salary reorders them. Restaurants fall from 18.1% to about 9.2% on medians, which lands them inside the 5% to 10% net guideline most guides quote. Fuel stations drop to about 5.8%. Bookkeeping practices fall from 50.0% to about 30.9% and stay near the top. The guideline is not wrong. It describes the end of this process, after the owner is paid.
For single-industry versions with real listings and diligence checks, see is a cleaning business profitable, is a junk removal business profitable, is a pressure washing business profitable and buying a laundromat.
What is a good profit margin for a small construction company?
For construction trades the median SDE margin runs 17% to 25%: flooring 17.0% (n=221), roofing 18.2% (n=167), general contracting 20.9% (n=529), HVAC 22.3% (n=469), electrical 22.4% (n=223), plumbing 23.0% (n=234), painting 23.0% (n=178) and carpentry 24.8% (n=102) (Main Street Index, October 2026).
These businesses are large relative to their margins: median revenue is $0.8 million to $1.7 million. That means the salary adjustment is modest, about 4.5 to 9 points, and an adjusted net margin of roughly 12% to 17% is a good result for most trades (carpentry runs higher). Roofing earns the most dollars of the group, a $361,000 median SDE, on one of the thinner margins. In general contracting, only 3.2% of listings state an SDE margin above 50%, against 21.4% above 30%. Ask how the seller books subcontractor costs and materials, because they change the real figure. See buying an HVAC business, buying a plumbing business and buying an electrical contracting business.
How to move your margin
Our data cannot say which tactic works. It can say where the room is. Three places are worth checking, in this order:
- Price first. Within an industry the spread is wide: a restaurant at the 25th percentile keeps 12.5% and one at the 75th keeps 24.4%. Most of that gap is price against cost, not a different business. A small price rise falls straight to margin because costs do not move with it.
- Count your own pay. If your adjusted net margin, after a manager salary, is negative, the business is a job. Fix revenue per hour of your time before adding cost.
- Check the volume trap. Margin falls as revenue grows (44.3% to 13.5% across bands), so a bigger revenue number with the same owner earnings is not progress. Track dollars of owner earnings and the adjusted margin together.
Gross margin is the lever for product businesses: if cost of goods is 40% of price, a 5-point cost cut adds 5 points to every margin below it. Our listings do not report gross margin, so we do not have an industry benchmark for it, and we would rather say so than quote one.
Is your own profit margin good? Five steps
- Write down revenue and net profit. Take both from your profit and loss statement or tax return for the last full year. Net profit divided by revenue is your net margin.
- Add back your own pay to get SDE. Add the owner's salary or draws, plus personal and one-off costs run through the business. Divide that SDE by revenue. This is the margin owner-run businesses are listed and priced on.
- Subtract what it costs to replace you. Take SDE, subtract the salary a manager would cost, and divide by revenue. This is your adjusted net margin, the one that tells you if the business would still pay without you.
- Find your industry and size band. Compare the SDE margin with the median and the middle half for your industry, then with the median for your revenue band. Small businesses run higher SDE margins because the owner is the labor.
- Place yourself in the range. Below the 25th percentile means a pricing or cost problem to fix. Between the 25th percentile and the median is normal. Above the 75th percentile means find out why before you try to grow it.
If you are buying a business, run the same five steps on the listing. The business price checker shows a listing against its industry peers, and how to value a small business explains how the earnings turn into a price. To find an industry worth looking at in the first place, start in Discover.
What this data cannot tell you
- Stated, not verified. Revenue and SDE are what the listing says. Sellers may round up and some add-backs will not survive diligence.
- Asking side only. These are businesses for sale. Businesses that are not for sale, including the most profitable, are not here, and sellers may skew toward flat or tired ones.
- SDE, not net. We did not convert individual listings. The adjusted column uses a $75,000 salary on medians; real salaries vary by industry, city and the owner’s hours.
- No gross margin. Listings rarely state cost of goods, so there are no gross margin benchmarks here.
- Margin is not cash. Capex, debt payments, taxes and working capital sit below SDE.
- North America and Europe. Figures are US-dollar listings. Other markets use other conventions and are not mixed in.
- Industry classification. Industries are assigned by a model plus a taxonomy, and some listings are in the wrong bucket.
Methodology
All queries ran read-only against the Main Street Index on October 13, 2026. We took the de-duplicated listings (cross-site duplicates removed: 78,000+ of 84,900+ rows), kept those priced in US dollars with an SDE earnings basis, positive revenue and positive earnings below revenue, and removed listings classified as unclassified. That leaves 24,000+ listings in 137 industries. Margin is SDE divided by revenue for each listing; medians and percentiles are taken across listings, so one large business counts once. Industry rows require 100 or more listings (74 industries).
Revenue bands use the stated revenue. The distribution table uses strict thresholds (above 20%, and so on). The 99.5% figure compares US-dollar de-duplicated listings by earnings basis: 49,900+ on SDE and 200+ on net profit. The $75,000 salary is our assumption, chosen as a round figure for a non-owner general manager, and is not drawn from the listings.
Data sources and limitations
| Source | Used for | Size | Limitation |
|---|---|---|---|
| Main Street Index listings | SDE margin distribution, by industry, by revenue band, earnings basis split | 78,000+ listings; 24,000+ in the margin sample | Seller-stated; asking side; not tax returns |
| Main Street Index industry labels | Grouping into 74 industries with 100+ listings | 137 industries in the sample | Model-assigned; some misfiled listings |
| Owner forum threads | How owners mix before and after-pay margins | One thread Google ranks for the question | Self-selected; anonymized; unverified |
| Google SERP, People Also Ask, AI Overview | Which questions to answer and the 5% to 10% net claim | 4 SERPs, one day | US results, Oct 13 2026; changes daily |
| Our assumption: $75,000 owner salary | Converting SDE to adjusted net margin | One number | Not data; varies by role, city and hours |
How BigIdeasDB helps you judge a margin
Ranked by how much they help someone who needs to know whether a margin is good:
- BigIdeasDB Main Street Index: every listing with its revenue, owner earnings, margin and price against its industry peers, across 120+ industries. Browse the live listings, the industry benchmarks or the buyer view, or query it from Claude with the Main Street Index MCP tools.
- ChatGPT or Claude: useful for turning a profit and loss statement into gross, operating, net and SDE margins side by side, as long as you check the owner-pay line yourself.
- A spreadsheet: five rows and one subtraction are enough to rebuild the worked example above with your own numbers.
Need a cut we did not publish? Request custom data. Compare plans on pricing.
Want the bottom of the table? The least profitable small businesses ranks industries by margin and by owner pay, which do not agree. For single industries, see pool service and security margins, and if you want to know what it takes to clear $600K a year, read what business makes $50K a month.
Check any listing's margin against its industry
See revenue, owner earnings and margin for every listing beside its peers, and spot the ones that are too good. Get 20% off Pro Lifetime with code SAVE20, a one-time payment on the pricing page.
Check a listing's price →Frequently asked questions
What is a good profit margin for a small business?
It depends on which margin you mean. Search answers quote 5% to 10% net profit margin, which is after the owner is paid. Owner-run businesses for sale report seller's discretionary earnings (SDE) instead, which adds the owner's pay back. On that basis the median is 23.3% across 24,000+ US listings (Main Street Index, October 2026), and the middle half runs from 15.6% to 34.7%.
Is a 50% profit margin too much?
No, but it is rare and usually means one of three things: a route or service with no staff, an owner doing all the work, or a seller who left costs out. 10.5% of 24,000+ US listings state an SDE margin above 50%. If the margin is SDE, the owner's pay is inside it, so check what is left after you pay someone to do the job.
Is a profit margin of 50% good?
On an SDE basis it is in the top tenth of small businesses, but it is the typical margin for two industries: accounting and bookkeeping (50.0% median, n=309) and food trucks and vending (50.0%, n=250). On a net basis, after paying the owner a market salary, 50% would be exceptional for any business with employees.
What does a 50% profit margin mean?
Half of every dollar of sales is left after the costs counted in that margin. At $400,000 of revenue, a 50% margin is $200,000. The key question is which costs were counted: if the owner's pay was not, that $200,000 is the owner's income plus any profit, not profit alone.
Is a 40% profit margin good or bad?
Good. A 40% SDE margin is better than 81.5% of US small businesses for sale (18.5% state more). Laundry and dry cleaning sits just under it at a 39.6% median (n=545). After a $75,000 owner salary, a business at $500,000 revenue would show about a 25% net margin.
Is 60% profit margin too high?
It is high, not impossible. 6.2% of US listings state an SDE margin above 60%. They cluster in pool routes, bookkeeping practices and one-person services where the owner is the labor. Treat 60% as a prompt to ask who does the work and what a replacement would cost.
Are 70% profit margins good?
A 70% margin is excellent if it holds after the owner is paid, and uncommon: 3.5% of US listings state an SDE margin above 70%. Pool service routes are the main source, with a 75.4% median across 342 listings, but those listings are split, with a quarter of them below 26.9%.
What is a respectable profit margin?
Between 15% and 35% SDE margin is respectable for a main street business: that is the middle half of 24,000+ US listings. Under 10% is thin (9.6% of listings). Above 35% is top quartile. For net margin, after a market owner salary, 10% to 15% is a solid result for a business with staff.
Which business has 50% profit margin?
Three of the 74 industries with 100+ listings have a median SDE margin of 50% or more: swimming pool services (75.4%), accounting and bookkeeping (50.0%) and food trucks and vending (50.0%). Margins like these come with low revenue: the median pool route has $157,000 in sales.
What kind of business has the highest profit margins?
Low-staff, route-based and professional-service businesses: pool service routes, bookkeeping and accounting practices, food trucks and vending, laundry, software, car washes and medical practices. The lowest are fuel stations (10.5%), car dealerships (11.0%) and pharmacies (12.6%), which move high revenue at thin spreads. For a ranked list with owner earnings, see the most profitable small businesses study.
Is a 100% profit margin possible?
Not as a real business margin, because every business has some cost. Of US listings that state revenue and owner earnings, 297 state earnings equal to or above revenue, which we treat as errors, and 0.5% state 90% to 99%. A margin like that usually means costs are missing from the figure.
Is 30% profit margin too high?
No. A third (33.0%) of US small businesses for sale state an SDE margin above 30%. It is common in beauty, cleaning, pet services and laundry. On a net basis, 30% would be high, but for a business under $250,000 in revenue it is closer to ordinary, because owner pay is a large share of sales.
What is a good profit margin for a small construction company?
Between 17% and 25% SDE margin across construction trades in our data: flooring 17.0%, roofing 18.2%, general contracting 20.9%, HVAC 22.3%, plumbing 23.0%, carpentry 24.8%, each with 100+ listings. Those include the owner's pay, so a net margin after a manager salary lands closer to 12% to 17% at typical revenue.
What is a good gross vs net profit margin?
Gross margin is revenue minus direct costs, and it should be much higher than net because it leaves out rent, wages, and overhead. A 50% to 60% gross margin that becomes a 10% to 15% net margin is normal for a service business with staff. Net is what remains after every cost, including the owner's market pay.
BigIdeasDB Research. (2026). What is a good profit margin for a small business? Real margins across 70+ industries. BigIdeasDB. Retrieved from https://bigideasdb.com/what-is-a-good-profit-margin-for-a-small-business