Profit Planning for 2026: How to Make the Math Work Early

In a time where construction costs shift faster than schedules, waiting until mid-year to assess profitability is a risk most builders can’t afford. The most successful construction businesses don’t just hope to make a profit — they plan for it, starting now.

Early forecasting allows you to reverse-engineer your margins.
By setting a net profit goal for 2026 — say 10% — you can build out your desired overhead coverage and margin targets from there. This approach ensures that pricing, purchasing, and labor allocation all contribute toward that bottom-line result, rather than undermining it.

Pipeline planning clarifies how many jobs you actually need.
Rather than taking on every job that comes your way, determine how many ideal projects you need at your target margin to hit your profit goals. This is especially helpful for keeping your team focused, protecting quality, and avoiding the trap of “more work, less profit.”

Pricing should be set using margin, not markup.
It’s easy to think you’re profitable when you mark materials up 20% — but if your cost base is rising and labor overruns are common, that math falls apart quickly. Instead, work backwards from desired margin: if you need a 20% gross margin, pricing must reflect that after all known direct costs.

Lock in your vendor relationships and pricing expectations.
Now’s the time to discuss 2026 volume estimates with key suppliers and negotiate early-buy pricing or rebate tiers. These proactive conversations protect your pricing and help your vendors plan too — creating better collaboration across the board.

Budget for operational upgrades, not just job costs.
Investing in tools, training, and process improvements now often leads to greater profit protection mid-year. Small gains in estimating accuracy or time tracking can easily net thousands in saved costs by summer.

At CMS, we understand that reliable margins depend on dependable material pricing, on-time deliveries, and strong communication. We’re here to help you build smarter — and more profitably — in 2026.

Need help forecasting your 2026 material costs?
📞 Contact Construction Material Specialists — your supply chain ally in West Michigan.