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Markup & Profit: A Contractor's Guide - Revisited
Copyright 2012

Markup & Profit: A Contractor's Guide - Revisited


Planwheels, Specialty Calculators, Measuring & Estimating Tools
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Estimating Electrical Construction Revised
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Markup & Profit: A Contractor's Guide - Revisited

By: Michael C. Stone

At last, a book on how to figure the right markup for a construction company!

Few construction companies fail because of poor building practice; they fail because of poor pricing practice.

To succeed in a construction business, you have to price your jobs to cover all labor, material and overhead expenses, pay yourself a decent salary, and make a profit that will keep your company thriving. And a large part of that is knowing how to figure the correct markup for your business.

Construction contracting businesses have the highest rate of failure of any type of business in America today. Why? Because too many contractors undercharge for their work. They don't calculate their true costs of doing business, they don't consider their investment of capital, and they don't allow for "surprises." In other words, they don't work out how much they need to have left over after covering all their costs to make sure they stay in business.

In this guide, Michael Stone, a highly-successful contractor, lecturer and consultant, explains the importance of setting your own markup - and not just picking a markup figure that someone else uses, or a number you found in an estimating book!

Every business is unique, with different labor costs, different overhead costs, different profit requirements - so their markup should be different, too. Mr. Stone gives you the background and calculations you need to correctly figure markup based on your individual business.

He writes in simple layman's language and includes examples, formulas and sample problems to help you. When you've read this book, you'll thoroughly understand what markup is and how to arrive at it. And just as important, you'll know how and why you should apply it to your job costs to arrive at the right sales price for your work. And that's the secret to success in this industry.

Mr. Stone reviews the basics of what it takes to survive in the construction business. You'll learn how to :
  • Calculate your full overhead
  • Price your work at the proper markup
  • Forecast increases in your overhead
  • Set and keep a budget
  • Figure all your job costs
  • Sell yourself and your work
  • Estimate your break-even point
  • Recognize an unprofitable job
  • Compute a fair wage for yourself
  • Write a good contract

This book gives you the key to operating a profitable, contracting business - figuring and using the correct markup on every job. It gives the simple mathematical principles and formulas that you can use, regardless of the type of work you do.

Learn from the book yourself, and then use it to train your sales staff, in marketing techniques and calculating markup on their sales. Use the sample problems in the back of the book to test your own understanding, and to check your employees' grasp of how to figure markup.


So You Want to be a Successful Contractor

Success is not Easy
Reasons for Failure
The Path to Success
Five Basics for Survival

Building a Financial Foundation

The Basic Formulas
Defining the Terms
Determining Your Financial Requirements
Estimating Job Costs
Setting Your Profit
Figuring Overhead Expenses
Projecting Volume

The Right Markup for Your Business

What Type of Business?
Calculating Markup for a Remodeling Company
Calculating Markup for New Construction
Combining New Construction and remodeling
Commercial Work
Specialty Contracting
Sliding Scale Markup
Adjusting Your Markup
Margins vs. Markup

Pricing Your Services

Cost Plus Contracts
Time & Material Pricing
Job Supervision

Avoid Financial Pitfalls

The Relationship Between Overhead and Volume
Make Adjustments When Increasing Overhead
Know Your Cash Flow Needs
Keep a Reserve Account
Never Use Someone Else's' Numbers
Be Profitable, Not Competitive

Build the Work Profitably

Subs or Employees?
Ratio of Employees to Dollar Volume
Hiring Employees
Hiring Subcontractors
Training Your Employees
Paying Your Employees

Good Contracts Protect Your Assets

The Importance of a Detailed Contract
Writing Your Contract Documents
Contract Language That Will Keep You Out of Trouble
Doing Business With Government Agencies
Good Contracts Have Well-Defined Pay Schedules
Special Contract Types
Contract Software

Deal With Changes Properly

Using Change Work Order Forms
No Change Work Order, No Change!
Pricing Change Work Orders
Subcontractors & Change Work Orders

Get Leads, Get Jobs

Know Your Job Cycle
The Basics of Attracting Leads
Surviving Without Advertising
Profitable Sales
When to Say No

Better Business Practices

Make Clients a Priority
Building Quality Jobs
Classes, Seminars and Conventions

Recognizing Problems in Your Business

An Unhappy Client
Making it Through the Tough Times
Are You Making Money?
Preventing Business Failure
The Warning Signs

Working With Professionals

Your Attorney
Lender and/or Mortgage Broker
Marketing and/or Advertising Professionals
Coach or Business Consultant
Professional Relationships Bring Referrals
Insurance Companies
Increasing Your Expertise in Your Field

Tools for Your Business

Time Management
Cell Phones
Computer Software
Digital Cameras & Video Recorders

Management Tools

Rent or Purchase Tools & Equipment?
Do it Yourself or Hire it Done?
Formulas You Should Know
Forms for Your Business

Starting a New Business

Operate Within the Law
Consider Your Spouse & Your Family
Buying a Construction-Related Business
Enter a Partnership With Eyes Wide Open
Write a Business Plan
Build Your List of Specialty Contractors
Joining an Association
Fall in Love With Your Business, Not Your Jobs

Appendix A: Ten Cardinal Rules...

Appendix B: Problems for Readers...

Appendix C: Construction Resources...


336 Pages, 8-1/2 x 11
Copyright 2012


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