This is directed at remodeling GCs, not at trade subs or new-house GCs.
You have figured all your hard costs, your labor costs that include all taxes and insurance, your subs have all submitted firm price bids and you trust them, you have applied contingencies where necessary, you have applied your overhead to the job, your own draw for time worked, etc. Everything.
What do you now put on top for the profit?
Performance improvements for the prized homes of an influential developer who wanted us all to be able to own one.
"I have learned so much thanks to the searchable articles on the FHB website. I can confidently say that I expect to be a life-long subscriber." - M.K.
Dig into cutting-edge approaches and decades of proven solutions with total access to our experts and tradespeople.
Start Free Trial NowGet instant access to the latest developments in green building, research, and reports from the field.
Start Free Trial Now
Replies
Gene,
Tough question due to the variables involved. When I do my calculations, just as you do and arrive at a project price, I then have to review my competions pricing history to see where I stand. If I can get away with more profit and still be competitive great, if not then I look at the job and decide if it has potential for additional work or more exposure for my company to attract new work. My profit margin is dynamic in nature.
HTH
30% on a bid, 20% on a t&m estimate. But we have sales taz here in WA so that's BEFORE tax to the customer, not after.
Who's the cat that won't cop out, when there's danger all about?
http://www.asmallwoodworkingcompany.com
Where do office time, supervision, admin, etc., figure into your calculation? Does "profit" need to cover those?
"
Where do office time, supervision, admin, etc., figure into your calculation? Does "profit" need to cover those?"
I'd consider those "overhead" David. Is that how you account for those expenses? Or do you try to recapture admin time spent on each job from the job that time went into?
Hey, anyone figure out what we're going to do around JLCLive! yet?Who's the cat that won't cop out, when there's danger all about?
http://www.asmallwoodworkingcompany.com
Jim, for the budget I'm working out now, I have labor line items for every admin/office thing I can... estimating, client/designer meetings, doing payroll, invoicing the client, handling A/P, subcontract admin, etc. Things that suck up a lot of time. Those are all job specific for me. I am trying to switch over to defining most things are job specific rather than having this large group of stuff that's "overhead".
There are quite a few people attending JLC Live. Can we get them together for a minute? Probably, although I am lacking a meeting place to suggest and no one else has thrown one in. How much you know about Seattle? Any restaurants near the show that can absorb a bunch of contractor types?
"Those are all job specific for me. I am trying to switch over to defining most things are job specific rather than having this large group of stuff that's "overhead"."
That makes a lot of sense. Sure would be a good way to get a handle on how much time you actually spend doing those tasks. Eventually it would average out to Xhours/week. But how do you get paid for jobs you bid but don't get?
I'm not familiar with Seattle except for how to get in and out of a few areas near the city center. We could at least agree to meet up for lunch one day at the Convention Center though, couldn't we?. Then maybe folks could hook up from there to meet after hours?
Who's the cat that won't cop out, when there's danger all about?
http://www.asmallwoodworkingcompany.com
Edited 10/19/2006 9:40 am ET by jimblodgett
But how do you get paid for jobs you bid but don't get?
That one is easy, Jim. As fast as you can, adopt the Mike Smith tried-and-proven system:
Get paid for your proposals.
But his latest picture post of the cedar reroof job make me think. Who pays for a reroof quote?
Will Mike tell us he got paid for that proposal, or will he admit he didn't, and really only gets paid for those proposals that are true design-build projects.
I was just in Seattle at another conference. I found restaurants there to be hit or miss. Down at Pike's Market (the flying fish place) there is a diner (remember "Sleepless in Seattle"? It's the diner Tom Hanks was at) which has a bunch of different areas and can probably accommodate a construction crowd at off peak times anyway.There is also a Brew Pub at the market which has good beer, and they looked to have some space.Many of the places are much more upscale. If you are interested, e-mail me and I'll try to get the guide we used to you. Good places, especially for fish, but prices are not low, and the sales tax in Washington is high.
Gene,
The way I look at it, I don't do Draws, I do a salary. With Benes.
Net Profit is for the businesses' "Salary."
Figure out what ya wants fer that, and Markup is done.
SamT
Edited 10/16/2006 10:51 am by SamT
So Gene - why do you ask? Start a thread and let it wither? What's up with that?
Who's the cat that won't cop out, when there's danger all about?
http://www.asmallwoodworkingcompany.com