Replies

1. 
   Guest_ | Dec 09, 1999 03:42pm | #1

   *
   Frank,

   It depends on the sub. If it is a licenced insured sub who you just call up and show them what to do 8 to 12 %. we usually do 10%. If they arent insured and licenced treat them like day labor.

   Rick Tuk

1. 
   Guest_ | Dec 12, 1999 02:03am | #2

   *10 to 20 percent.. BIG jobs 10% -- little jobs 20%.. Difficult clients??? Nah! I better not go into that! L. Siders

1. 
   Guest_ | Dec 12, 1999 11:45pm | #3

   *This is a subject that should be in the business section and talked about more....My experience has shown me that if I am not charging closer to 25 to 40 percent above the sub to cover time spent with the sub before during and after their work is performed then I would be at many times working for free...So the way I write it up and live with these numbers is to charge 10 percent profit and detail all the rest of the expense in the main cost of doing the work....which makes sense to me anyways...We need real world methods talked about for handling these costs including the "Linda and Walt" ways.I'm very open to hearing others speak out on this subject as I am very open to revising my methods from time to time.near the stream,aj

1. 
   Guest_ | Dec 13, 1999 07:57am | #4

   *I generally work t+m and I mark up subs 15% if I am responsible for their work. I bill the time I spend coordinating with them at the labor rate the customer and I agree to at the beginning of the job.

1. 
   Guest_ | Dec 13, 1999 06:36pm | #5

   *If you go to seminars where they will discuss the subject honestly, you will find that a remodeler has to be marking up 50-67% to acheive a bottom line approaching 10%. Most people attending the seminars will stand up and say that that is highway robbery, or they can't win jobs at that markup.If you don't believe that that is correct, take out your Schedule C and divide your expenses by your gross sales and you'll find that the guy giving the seminar, be it Walt Steeppleworth, or Jud Motsenbacker, or any of the JLC staff and you'll find that they're probably a little low.After about two years in the business, you should develop enough data to make your own determination. If you are a one man band, and you are working for wages, you may think you don't have any overhead. But if you are honest with Uncle Sam on your return, the schedule C don't lie. Take your bottom line and divide by 2000 hours (40 hrs/week x 50 weeks) and thats what you were making. EXCEPT, you probably spent 70 hours a week doing it, now what were you making ?Some subs don't understand the role of a General Contractor and feel that someone is making money unfairly on their labor. Another problem is that the term markup is ill defined. If I MADE 10% PROFIT on everything, I'd be a very well-off business. PROFIT is what you have left AFTER you pay ALL the expenses. Sole Proprietor......its line 31 of your Schedule C. If you think its anything else, you're either cheating Uncle Sam or fooling yourself.Why do you think people willingly pay $50. hour for a mechanic. Does the Owner look like he's getting rich?Do you really think your expenses are less than his ?Are you running a business, or working for wages ?b It ain't easy getting the green........Kermit

2. 
   Guest_ | Dec 13, 1999 07:49pm | #6

   *This should really be in the business section,and I would really like to see an honest discussion of it.I approach this entire subject a little differently.When I am pricing a job,the very first thing I decide Is how much I am going to make from the job.A set dollar amount. I give no consideration to the %. Then I add on ALL the other costs associated with producing the Job. It really does not matter to me if the sub-contracted portion is a small part of the job like trash hauling,or if the sub-contracted portion is almost the entire job.Any work I do with my own hand is added on like any other expense.My money is the first consideration cause thats why I am doing the job in the first place.( well that and the freedom to do things MY way). Craftsmanship,quality materials,warranty,reputation,invested capital,adverising,etc. are all really just tools to earn with.This isn't a religon or a charity,it's a business.good Luck,All,Stephen

3. 
   Guest_ | Dec 13, 1999 08:44pm | #7

   *Mike - When you say "...you will find that a remodeler has to be marking up 50-67% to acheive a bottom line approaching 10%." do you mean that's what you have to mark up your subs, or everything you sell? Thanks - jb

4. 
   Guest_ | Dec 13, 1999 09:35pm | #8

   *Example time....How many of you can hire a sub to excavate your foundation with just a ten minute phone call? I can't. That and most of the other trades I hire to build a home need hours and hours of my time....My major subs...excavator, concrete, drywall, tile, electrician, hvac, plumbing, tile, paint....all need hours and hours of my time to know where, how many, what's this, plan reading help, it's not on a plan items, they forgot this, this is in the wrong place, this is wrong, what do you want me to do, what color do you want where, no the pattern actually goes accross the hall not down it.........soooo10% unkowns10% onsite management10% overhead costs paper, insurance, paper etcplus whatever else is sneaking in to the deal....near the stream, and definitly trying to make money on my subs or we try to do it ourselves,aj

5. 
   Guest_ | Dec 14, 1999 01:13am | #9

   *I think Stephen is right, this belongs in the business section, same place you posted your cabinet pricing ratio.Be there or be square........

2. 
   David_Nickelson | Dec 14, 1999 06:33am | #10

   *
   Where I have arrived..is the following..which seems to be fair for all parties..It leaves the clients a bit grumbly..because they are paying full price...but...

   All projects.of any scope are time and materials
   Materials / Labor / Subcontractors marked up..17.7 %
   This nets..a 15% markup..
   My OH runs about 9%...leaves..6-7% markup
   I bill for everything..my time..my labor..sub assistance...

   I think we are long overdue..recognizing that the general contractor provides the following services:

   1. Subcontractor assist
   2. Subcontractor supervision
   3. Client handholding {every hour..start billing for it..and those meetings..become much more efficient}
   4. The work of the general contractor which includes:
   a. Safety
   b. Site cleanup I am rabid..about a clean well organized job site...find it on a line item...
   c. Site logistics / weatherization
   5. Value engineering...which means we expose our suppliers..our subs...our vendors..to the client...a series of relationships built over the years..which have intrinsic value...
   6. Contract negotiation Contract Management
   7. Billing for T and M billing

   My mantra is..."We are never funded for the risks we take..on each and every job...lets fund ourselves..for the services..we provide..."

   Oh yes...and lets quit beating eachother up..for the sake..of competition...

   DN

3. 
   Guest_ | Dec 14, 1999 10:15am | #11

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   Music to my ears (or eyes) David.

1. 
   Guest_ | Dec 14, 1999 06:53pm | #12

   *David,Great post....I hope those that markup subs 10% read this...and start to understand how much they are doing with no fee attached...I am all for fairness and honesty and of course service, which is what we a ll are providing....full service...not self service...That's Home Depot or Lowes.near the stream,ajHappy Holidays to all

4. 
   Frank_N | Jan 05, 2000 02:49am | #13

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   Need some info regarding what is a normal mark up on top of a bid from a Sub. I have a small one man Handyman business and I seem to be getting bigger jobs that require using Subs. Since I do the coordinating of jobs there should be some compensation for me. Any information whould be greatly appriciated.
   Frank N