i’m just asking this for curiousity’s sake, for when i go into business for myself. how much can a GC with lets say 750k-1mil. in volume expect to make in profit a year?? lets assume that there is little overhead (i.e. no shop, no office personnel).
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Last year we were in that range for gross receipts and had an overhead of $90,000. We have no shop (that we pay for) and no office employees. Our profit was a lot less than that. Are you ready for that?
I've worked for a few sharp guys who only build one house a year around the $1M mark. One claimed that in a good year he would reach a 20% margin before taxes and the other said 25% before taxes was common for that market. They also said that this segment paid a great deal more than houses 1/3 the price.
What is this talk about no office personnel?
How is a GC going to gross a million without doing any paprework?????
You might be doing it yourself, like I do, but that eats a couple days a week. I don't work for free.
Waht am IO missing here?
or - more inmportantly, what are you missing here? There will be office overhead, no matter who does it. When I was a self emp sole prop and working with no employees, it was still there. I did a bunch every evening while warming up the truck for the ride home. and then a few evenings a week to follow through. But the percentage of time was probably about the same it is now.
The point is that you will never make it to a million a year if you fail to plan for the overhead of office expense. You will be doing it for free and regretting every minute of it. It will burn you out long tiome before you see any "profits"
Now, before we can have any meaningfull conversatiuon about profit, try defining it. Hint - it is not what you have left after taxes.
you have to pay yourself your wages or salary FIRST, then everyojne else, then you add the markup to cover the overhead and allow enough for the profit.
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Too many variables for anyone to really give you a meaningful number. It depends on your market, how you market yourself, and what you're doing. If you're doing rot repair in a low income area, or doing high end remodeling, or building spec. or custom homes, your income will be different for doing each, even with the same gross volume. Once you're well established, assuming that you've built a good reputation, you can get away with charging more and greatly improving your margins.
We do several times the volume that you're talking about, but it took us a long time to get there. You need to ask yourself how you're going to market to even get that first million in volume. Just starting out it will cost you more to get that business than it will when you hopefully have referral and repeat business as well. Make sure that you price your services high enough, and do everything that you can to treat clients better than they expect to be treated. Do high quality work, treat people right, and the money will come. It sounds easy, but not many people have/can truly make it work. It's sort of a bummer to check messages and return phone calls even when you're on vacation, but the dividends that it pays are enormous. I've called people from Mexico that didn't even know I wasn't in the office. Communication is a key that too many folks miss.
Are you only talking about "business profit" or does that also include your "salary".
And do you understand the difference?