Is a 10% pre tax profit margin achievable for plumbers. Ie is a 10% profit before corporation tax as a percentage of turnover a realistic target for your guys?

I'm posting this question in the decorating, building and eletrical forum to as i've been having a debate with a friend about the construction industry in general.

Much appreciate your opininions

You make it sound so straightforward !!. Like with any industry it is not that straightforward.
First off what size of business are you talking about ? Are you are talking small business' ( as many plumbers are - either self employed or small limited companies) and there are disctinctions to be made here also. Take a sole trader ... his turnover may even be below the VAT threshold - say £60k... it is likely that his taxable earnings could be circa 50% of turnover and that can be interpreted as 'profit' and thus 50% margin , however the same chap may choose to set himself up as a limited comany , turnover the same but if he draws a £30k salary then profit and margin would be zero (not strictly true as employers NI etc but you get the picture) . The way that small businessess renumerate their stakeholders (especially if the owners are also the workers) can be manipulated to make the best of the tax rules ( in the example above the chap could derive income from a mixture of salary and dividend)so I would argue that it is nigh on impossible to answer your question.
There is also the issue of capital investment within the organisation... if the whole or some of the profit is re-invested then this masks the true profitability as the margin is reduced at the expense of increasing the business' asset value (balance sheet).

As the biggest cost for most small plumbing business' is materials then this goes down accordingly as turnover is reduced - whilst operational margin will inevitably fall it is the businessess with the lower fixed costs ( premises, staff, loans, annual costs etc) obviously fare better in terms of maintaining % net profit margin (though not necessarily £net)

I would however like to hazard a guess that larger organisations at the moment would be struggling to break even let alone 10% ... in a competitive world there larger contracts will be fiercer fought and the pickings extremely thin.

Thanks for your comprehensive answer.

I guess i was most interested in limited companies, as you say, sole traders may not necessarilly know their net profit margin, whilst a limited company would have to report this as part of their annual accounts. I recognise this would be impacted by the companies investment strategy etc. Also the net profit for a small limited company will depend heavilly on the objective of the company. If the aim is merely to take as much from the company each year, by paying a normal salary and then taking a dividend depending on performance, many companies would look to keep their net profit as near to possible as zero for tax reasons.

Perhaps i should rephrase the question as, is a 10% net profit margin before dividends a realistic target? Ie assume the company pays its employee and directors a typical salary (forget that in a good year they will probably pay themselves most profit out as dividends).

Am i possibly being a little naive? Do any construction companies look to make a standard profit margin and reinvest this each year to grow the company? Surely the larger companies must have started as small limited companies and done this over time.

Thanks again. Look forward to your response.