Replies

1. 
   Piffin | Jul 10, 2002 05:13am | #1

   Let's suppose he doesn't add it to labor and because his cost to customer is low, he wins lots of bids. Now he has to hire help at the wages he is charging. He spends more unbillable time doing management without getting paid for it or working 'till midnight to play catch up while his wife and kids forget who he is or what he looks like. Somebody working for him makes a mistake and he is now responsible for fixing it but doesn't have reserves to cover the cost because he never made anything on the guy to start with.

   He's already losing money but he just doesn't know it yet.

   Excellence is its own reward!
2. 
   sdr25 | Jul 10, 2002 05:15pm | #2

   I mark up both. It all depends on how you look at it. Your buddies wage may be high enough as to automatically include mark-up.

   Scott R.
3. 
   BossHog | Jul 10, 2002 10:54pm | #3

   Kinda depends on how much he's marking each one up.

   If he has a job with $1,000 worth of labor and $1,000 worth of material, and marks them both up 10%, he's going to get the same price as if he just marks his labor up 20%.

   But get a job with more materials and less labor, and he could wind up taking a hit.

   I'm kinda with the other guys in thinking that he should mark up both.

   You need to be compensated for your time spent chasing down materials, etc. That's what the material markup is for. (Also for replacing screwed up materials)

   (Edited at the request of the illustrious piffin)

   
   

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   Edited 7/11/2002 7:20:59 AM ET by Boss Hog

1. 
   Piffin | Jul 11, 2002 04:33am | #4

   Boss, edit your post to change one of those labors to say materials. I had labor pains trying to sort it out. LOLExcellence is its own reward!

4. 
   Mooney | Jul 11, 2002 05:50am | #5

   If you have a crew , why would you not have to put percentage on both ?

   That said ; I dont have a crew , and dont want one . I will hire one man at a time as a sub if I have to, thus making them responsible. Usually its a crew. My prices are usually set . Then I work off a percentage of the job, if Im not there all the time , or [like the church I just managed] if the job is big enough I charge a flat rate for my time as a super, with a bonus for cost and time .   Responsebility is at a minumum. There are others who charge a  flat percentage for the total cost of the job.

   I like the bonus system the best, because it gives teeth to the agreement for me to perform.  Im a better buyer and dealer than I am a crew pusher. Sells a lot better than cost plus . What does that give the client other than they will be writing open checks? What pressure does that put on the contractor to perform ? Would he even care what the labor and materials ran ?
   These are the questions I ask the client .  

   Tim Mooney

5. 
   Paulgern | Jul 12, 2002 09:12am | #6

   thank you everybody. i shared these messages with my friend- as scott suggested, he does feel his wage is high enough that the markup is included. he is a one man operation. the 2 lumberyards he deals with give a 7% discount if paid by the 10th so he figures he is getting 17% on the materials. he has been at it for eight yrs. i just got my license,the more info i can get the better chance i have of figuring out the business end of this profession. thanx again.