Markup & Profit: A Contractor's Guide

To succeed in a construction business, you have to price your jobs to cover all labor, material and overhead expenses, and make a decent profit.

The problem is knowing what markup to use. You don't want to lose jobs because you charge too much, and you don't want to work for free because you've charged too little. If you know how to calculate markup, you can apply it to your job costs to find the right sales price for your work.

This book gives you tried and tested formulas, with step-by-step instructions and easy-to-follow examples, so you can easily figure the markup thats right for your business.

Includes a CD-ROM with forms and checklists you can use.

TABLE OF CONTENTS

Looking at Markup in the Construction Business

• So You Want to Be a Successful Contractor
• And If You're Already a Contractor?
• And the Formula Is

Understanding Markup

• Symptoms of Impending Failure
• Three Major Causes of Business Failure
• The Terminology of the Industry
• Determining Your Financial Requirements

Establishing the Correct Markup for Your Company

• The Basic Formula for Markup
• Let’s Do Some Sample Problems
• Sliding Scale Markup
• A Review of Volume, Overhead and Markup
• Problems to Watch Out For
• Job Supervision and Markup

Sell Your Services – at a Profit

• The Basics of Attracting Sales
• Your Telephone Is Ringing, Now What?
• The Basic Steps of the Sale
• Some Final Notes About Sales

Writing Contracts

• The Importance of a Detailed Contract
• Writing Your Contract Documents
• Good Contracts Have Well-Defined Pay Schedules

Change Work Orders, Other Forms and Your Markup

• Using Change Order Forms
• Other Forms

The Mathematics of Your Business

• Setting and Keeping a Budget
• Margins vs. Markup
• Break Even
• Math, Formulas and Ratios for Your Company
• Computers

Bean Counters and Your Business

• Dealing with the Bean-Counter Mentality
• Financing with Two Bankers and One Broker
• Working for Bankers
• Insurance Companies, Their Pay Schedule and Your Markup

Justify Your Markup

• Communication
• Classes, Seminars and Conventions

Employees and Your Markup

• Training
• Productivity
• Schooling on Markup

Listening to the Experts

• Recognizing the Export\
• Increasing Your Expertise in Your Field
• Hiring Consultants
• Some Good Advice
• In Conclusion, May I Say Thank You

Problems to Solve

• Problem 1: Getting Started
• Problem 2: A Fourth-Year Business
• Problem 3: Correcting a Disaster
• Problem 4: All That Glitters Is Not Gold!!!
• Problem 5: Evaluating a Quarterly Review
• Problem 6 Boom & Bang Construction
• Congratulations!

Appendix
Bank Forms
Educational and Construction Resources
Index