I understand this is a loaded question and topic. I’m just trying to reach a general understanding of how other contractors mark-up their projects. I’m a younger professional, who joined a more seasoned contractor as his only employee. Since joining the team, I have managed two large projects. I finished on time and hit all our numbers. However, I’m learning that if we continue this path, we may not survive our areas tough market. The problem I see, is our mark-up over “cost of goods sold” is only 15%. I feel that is way to low and my boss is starting to understand that as well. We’ve gotten word of other contractors in our area getting as much as 40%. I know different companies should have different margins based on their paticular situation. But is their a general standard for mark-up? Do other GC’s include their on-site management in the mark-up…or seperate item on the job estimate? I love the business…but I have a lot to learn. Can anyone help?
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You need to guesstimate:
Projected Total Annual OverHead;
Desired Annual Profit;
Projected Annual COGS.
Divide Annual OH and Profit by Annual COGS. That's your Markup %
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SamT
Edited 8/3/2007 11:21 am by SamT