As I read your articles real life situations I have experienced flash through my minds eye. We should be averaging at least 100 percent for all our spare parts. not from the big box stores. When he says $5,000 is due to him because of the 25% increase, then to me that is a 25% increase on the entire project cost of $20,000 (so I am paying more for not only… Read more ». The results are predictable - debt and a non paying job. Profit is what insures a business’s longevity – if it doesn’t make a profit, it might not be in business in six months. I end this year very grateful for all your faithful influence over our entire operation. From the outside looking in the general public has no understanding of what it costs to run a business and what rates are required to make it sustainable. Have been doing so for years. Any advice would be appreciated. So if you’re paying $200 for a 50 mile range that is very unusual. He charged 30k and makes 50% ‘profit’ .ok, fair enough. August, 2016, I would not still be in business if it were not for the books, and what I learned about business finances from you. Some will charge a flat fee, but in most cases, a general contractor will charge between 10 and 20 percent of the total cost of the job. I add 18 to 20% on all material and all labor for a subcontracted crew. What is the industry standard % for a general contractor to build a custom home? I would do the demo, and prep work. I truly cannot express how much I appreciate the knowledge you have shared.December, 2019, I and my team have been so encouraged and guided by your insight for many years now. Not sure who figured there budget but they were wrong . So high $30’s to low $40’s. Would you ask your auto repair shop to reduce their price before rebuilding the engine on your car? My contractor did not have anything to do with the purchasing process or had to front any money upfront on materials, but he is still charging me 20% as O+P and says that’s industry standard. Minor upgrades – $45,000 The years of experience and knowledge is INCREDIBLE! You are amazing and so generous with your knowledge. September, 2018, Thanks for all you and Michael do!September, 2018, I want you to know that I just read your book and it has changed my entire business structure . February, 2017, Hi Michael...I've purchased your Mark up and Profit book and all I can say is I wish someone had sat me down 25 years ago and gone over this materialJanuary, 2017, I am a general contractor with a small construction company in its 4th year of operation. Somehow, though, it made more sense to hubby when Michael said it…. To help, we designed a general contractor proposal template that you can easily customize for every job. February, 2016, We met at the 2 day seminar that you had in Charlotte, NC over the summer. His business has a great reputation for tough to handle designs (architects recommend us), many years of experience, and years of advanced training in construction. If your contractor has a 1.50 markup (which is reasonable for a remodeling contractor), that means that if the estimated cost for a job is $10,000, they’ll multiply the $10,000 x 1.50 and arrive at a $15,000 … We have followed his mark-up rules as closely as ever and are proof that it really works! Is this correct? All we do is remodel. That makes it far for me to wheelbarrow the concrete to the pad. We've been studying up and implementing "Mark up & Profit" and "Profitable Sales" and its making a huge difference.July, 2017, Your Markup and Profit book combined with the online estimating course has saved me considerable pain and suffering. The rate can get as high as 25% depending on the size of the project. We've made so many changes (contract revisions, employee manual, draw schedule structure, calculated markup, updated website and now I'm navigating some marketing ideas. I look forward to Wednesday mornings when I know there will be a new treat of prose from you.March, 2019, What we have learnt from you guys has helped us tremendously in our building business and we are eternally grateful.March, 2019, I own markup and profit: a contractors guide! March, 2016, I have gone through your Markup and Profit book and it was very helpful in teaching me how to run my company more profitable. Overhead is a cost; mark up isn’t. The demo was already done and the homeowner purchased and delivered the materials. Have nice day. We have taken several of your classes for our continuing education and found them very engaging and informative. We stopped working with remodel clients because they thought watching HGTV meant that everything should be done in 2 weeks, for a ridiculously low price. December 2020, What your team has done for our business has been beyond significant and we are eternally grateful. There was a ton of useful information and this was a big help because I was in the process of starting my own remodeling company. I would say 15-25% depending on the price. We broke it all down. Thank you!January, 2017, The business of our business is completely different than 14 months ago, and I wanted to thank you again for helping me into the Stone Age. Smaller remodelers must be trained to use at least a 50% markup — a little less if they're subbing large parts of their projects. In such a contract only the subs mark up materials but all the Owner sees is the cost of the winning sub bidder. I hardly think he spent 200 hours JUST tiling his wet-area, but maybe he did it with a few hours of free time, in-between work and social life stuff? He is only getting whatever material use to waterproof shower and tub. If I have a 33% margin and give away 10% that leaves me with 23% to cover operating expenses. Subcontractors would be considered under expenses, not materials. December 2020, I really appreciate your program and have learnt a lot from you guys! This training should be taught in college for anyone considering a career in construction. I am a contractor and it’s not fair to expect Dale to pay for increases on something that didn’t occur. Trades and remodelers have higher indirect and overhead cost structures related to sales; thus their markups are in the 70% to as much as 100% range. I'm not a native to the construction industry. There is a lot of equipment needed to build the work and the work needs to be built in a short amount of time (9 months). We are just going through some issues with payment and troublesome clients so I am so grateful for this information. November, 2016, I stumbled upon your website some months ago, and I have been addicted ever since Just know we all appreciate your hard work. You're doing great things!December, 2017, Michael and Devon, You are changing our entire business approach...in a very very good way! Having an idea of how to steer the ship and avoid the rocks is invaluable. January, 2015, I purchased Markup and Profit a Contractors Guide. March, 2018, I am really getting energized about making my business profitable. Think because I come to them. So if you had tile work done with tile you bought for .88 a sf you think the cantractor should charge less in labor? He has both a “management fee” and then he also marked up the bids of the subs. A typical shower tile job should take 2-3 days. I am an interior designer and work on occasion with contractors in a similar capacity. Fixed overhead should be level set against a typical work effort (ex. Hi Abel, thank you for the question. Even one of the clowns on craigslist claiming he was all booked up. I’ve called the California State Licensing Board to ask specifically on this one myself. The information was awesome and you helped me add to my list of things I want to be doing for the business.March, 2020, I've been with the company since the very beginning and we've been huge fans of your work! The year started off strong, slowed down in the summer and is now finishing with a big bang. You have brought so much of this industry up a couple of notches, into a more professional sphere.May, 2019, Putting your principles into practice has made all the difference. . August, 2014, Thank you Mr. Stone. I told someone that now I'm not just willing to continue, but I'm excited to implement things we learned - not only in the business but also in the home. Someone who spends there life establishing their self and business had spent countless hours running their business behind the scenes. Paying for expenses because the contractor does not have the equipment is ok, but paying a profit charge on top of it it absurd and an insult to injury. For example, if GC is only responsible for labor and rough materials for a project, what percentage decrease could I expect to see in a project’s cost vs. a traditional project cost. But you left no money to pay for business expenses. I am learning so much from your book! I am trying to get an estimate over the phone, just to understand if I can afford the contractor, but they seem to prefer to spend their time to travel to my place instead of giving me an idea of the possible cost. I did agree to the price before the work started, but I never signed a contract. So, with five guys doing the roof, and him on site, his revenue is $365 per hour, or $2920 per day. The information you provide is so valuable! Basic with bathroom – $40,000 Ramiro, do as he says IF you want to start making money. Your book, website, and videos have helped very much. Your advice and the content of your programs has been extremely valuable to our business. . You have helped us so much as we build our Home Improvement Business. Its not like the pumping cost was “unforeseen”. i am in the process of doing a commercial TI. A bathroom remodel can cost around $2,500.00 for a very basic job. Our issue has resolved itself since I first posted this. I received my book today and have quickly read it from cover to cover. Need to add a bedroom (egress window already in place) and an 8 x 5 full bathroom. Keep on doing your best and hopefully it pays off financially and professionally for you. It is a lot of hassle managing a project with schedules, materials, deliveries, subs, insurance, etc. Some less, some more. The last one I attended I got more great information. Oh well. When my usual contractor came to look at the work, he said that there was a maximum of $800 in materials. What if the contractor is charging a 10% mark up And an additional 30% profit To my let overall cost. I know there’s a lot of stuff that goes in to it.. say a kitchen reno, material/labor included is about 20k. August, 2013, Thank you for your help and to tell you your customerservice is ***** stars. Ramiro, you need our book, “Markup and Profit”. I just heard those same people say, “But wait, contractors don’t have any overhead!”. January, 2019, Thank you for everything you do. . December, 2012, Read your mark up and profit book last year and it is like talking to a good straight talking friend. THANK YOU for all that you have done and continue to do for our industry! Tiling is easy once the… Read more », MarkAlmost all people that I run across. (no contractor in the world would have spent as much time on every detail that I did.) We are now more specialized and have systems in place that weren't previously there. How do i get this book ?I live in indonesia, and my job is in a construction business.In my country, regulation for overhead and profit was controlled by goverment which is not more than 15%.So the construction company is not growth. I had troubles reconciling that especially when I’ve gotten a quote from a local guy to do both floor and tile for $1,700. I’m not disputing that he didn’t do a good job. I fully believe in fair pay for fair work, but our GC seems to be billing excessively. And for you who choose this, don’t complain when you call us to come fix it properly and have to charge more to undo your DIY quality work. Please advise, thanks. I can’t pull the concrete truck on their driveway, So I have to park it on the street. To buy the land, survey, excavate, tie in water and electricity, pay taxes and permits, form concrete, build the walls, put up signs, put in the chairs, the projectors, the screens, the carpet, tile the bathrooms, put in toilets, lighting, electricity drywall, paint, and so on? Many contractors are already doing this. I suggest finding a contractor that you like and feel you can trust. If… Read more ». We deeply appreciate the influence you have had in that. Keith, that’s not a common breakdown. Some of your decision should be based on the rates of the electrician. I see it as the cost is only covering labor,… Read more ». This should be detailed in your contract… Read more », you have to keep in mind the contractors 20% markup includes the labor he would have to use and the tools he would have to use to install those items you picked out and paid for. March 2014, So glad I found your site. Your books and proposal writer software have been a wonderful resource for us. Most customers buy less or inadequate materials than what is needed. I got all of the demo done, redid all of the wiring and purchased all of the tile and major components and then got “sticker shock” at a $6,500 quote to get it finished (plus a attic ladder install) which is likely 90% labor. thanks, you guys r great We charge for our consulting time so don’t send the pictures. Thank you for honoring the discount even though I am ordering the packages a few days apart. How many of the tiles in your shower are cracked or have fallen off? is there a customer shower with floor pan? Your desire to cheap out on your project has undercut all legitimate contractors….not to mention the harm done to the reputation of legitimate contractors every time you tell all your friend how you got screwed by a “contractor”.… Read more », I couldn’t agree more there Dustin. Although it takes a little time, in the end, my success will be partly attributed to CPR . It’s going to cost you money and if you feel it’s “too expensive” maybe the work you require to be done is too expensive for… Read more ». See https://www.markupandprofit.com/blog/how-much-should-contractor-charge. Are you concerned that he’s gouging you? Keep in mind also that this guy did try to gouge him, in that he was doing NO DEMO, NO MATERIALS, hence none of the actual “Work” involved except to slap the tile on a prepped job. . That is: $4500 Master bath: floor, vanity countertop, tiling shower, and placing a stand alone tub. I find everything very informative. If there is damage in the apartment my deductable is 15 grand. My salary, insurance, office personel etc. September, 2015, The newsletters are fantastic and we read them every time. I'm still putting one foot in front of the other, but the things I've learned from you have helped me avoid many pitfalls. July, 2016, I just received a hand written note from you with your business card. If you would rather give the money to a retailer than your contractor, you can purchase the materials on your own. If you have requested a cost breakdown from your contractor you will likely see a percentage for their markup … Would it not be better to just offer reasonable prices? May, 2019, Thanks for being an ally of "the good guys" in the remodeling industry. On behalf of my husband, son, and I, thank you so very much! They save money, I’m not ripping them off. For projects under $100K 15% may be appropriate depending on the complexity of the project. he has dragged the build out for four months when it was supposed to be done in one. Thats really not bad. There is no doubt I am more confident in pricing and estimating jobs. https://www.markupandprofit…. It can also be dangerous if a client isn’t happy about seeing overhead expenses included in their job costs. Also include regulatory fees – licenses and permits and training – which everyone seems to want their Contractor to have but NO ONE… Read more ». Overhead is expensive. I am trying to make it in the Design & Build business and very much value how you support myself and others! It's allowed us to fine tune and we're looking forward to continued growth. Great for my wallet, not so great for my stress. I just had a HVAC/contractor add two supply vents, enlarge one return, replaced the duct going into the unit, and insulate the duct supply going out of the unit. If you’re pulling permits and managing the design, you’re the GC hiring a sub to do labor. This would not leave me with much at the end of the year. I also listened in on the recent webinar you had. I'm also concerned that subcontractors may be my most risky category as they tend to raise their prices during the job. And in some cases, I have heard our estimators say “we just know too much about these types of projects” – in other words, they have done them over and over and KNOW what problems will arise and add contingencies for it. We are getting on top of our numbers and making more money.February, 2019, I have been following you for some time now and I want to congratulate you both on, in my opinion, the most straight forward valuable insights for contractors I have come across. We are building a new house and we really trust our contractor. Builders and home contractors also make money on what is rather known as non-standard options, or special options. Be prepared to pay $75-100/hour for a decent contractor, and pay for every hour they invest, including planning, trips to the suppliers for materials missed or returned, meetings with you to review the job, and any changes you come up with… Read more ». It indicates a crappy work ethic, and someone that should be avoided. Frustrating to say the least. I also like to know why. For example, should he supply the subcontractor for block masonry, plumbing, electrical, etc. Sandy, I am a contractor. Royal Caribbean cancelled all U.S. cruises through the end of April. . He has stated that costs are up by 25%. Even if it’s the contractor doing the work themselves, they need to be paid for the labor time as well as overhead and profit. This has been a huge line of support, clarity and inspiration for my work.December, 2019, I came across your website, bought your books, read your weekly newsletters and now we are REALLY doing well. If you think about it, project supervision is as key of a role as the men doing the work. home owner here. You would still see those savings in the end, but could be minimal or end up costing you more money if it requires additional work to utilize. April, 2016, The class was excellent. Do you really expect someone to pick out, pick up, pay for and deliver all those materials for $60 and think that’s exorbitant? Other than problems with profit pricing work. Just owning a truck that can transport equipment is a MASSIVE expense. We will end up very close to the 8% net profit as suggested. Please tell me how a contractor gets 10% off from the big box stores? I hope that contractor is insured, has a computer to type on, has a car or truck to drive to the jobsite, a website to get job leads, pictures of his fine work, etc, etc. I really did appreciate the fact that he has made it his mission to help people at an extremely reasonable rate. April, 2018, I read every one of your newsletters that come across my email. . If you want our seat you will need to buy it… which makes us… your supplier. That’s not an argument. Merry Christmas! Unforseen issues have to be considered. I purchased tiles and hardwood floors on my own, but had my contractors pick them up. Thanks for sharing. We don’t price gouge but we don’t… Read more », Some people are DIYer’s and there’s nothing wrong with that. I feel confident (still a little scared ;) in running the business thanks to all of your great resources. Its not fair to the home owner to charge them for the pump cost if you didn’t include it in your price in the beginning. They will then use a markup on top of that, say 20%. We are at 1.67. Can't wait to read it! The contractor should not capitalize on a 50% material increase by making the customer pay for the material increase plus give the contractor an additional 50% markup on overhead or labor. I think I have made every single mistake highlighted in the book. Now the projects are not finished. Would it be a reduction of ~24-50%? October, 2014, We joined our local HBA and had some business questions and a colleague said that I most certainly needed to start reading your markup and profit book and that started our quest for more information to make our business better. If you don’t own an eBook reader, there is free software you can install on your computer to read it, see https://shop-markupandprofi…. I worked for my father's home building company for a few years and just recently my wife and I branched off to start our own remodeling and home design company. I know I am on the right track thanks to all of your help and the products you push on your website. When contractors charge too much, their lunch gets eaten by DIY people or illegal aliens. If he did his math right the first time, he should be making the same profit by just covering the material increase. They were full of very helpful information and presented well. There are two parts to the Contractor’s Fee; overhead and profit. If you have a contract for $10,000.00 and the contractor marks up materials 10 percent…how is this fleecing a customer? Waylon, the tip is for all those working on the job, not just for one employee. I spent hours making things as perfect as possible. easy to use and common sense format.February, 2018, We are devotees of Michael's approach and are so grateful for all the help the books have provided over the years.February, 2018, I've been able to find the answers to many questions since coming across your site. The employees and the contractor. Have helped very much phenomenal speaker with 13 % profit and pricing your,... You seem to just offer reasonable prices on OCE and saw this.! At it $ 50 much I thought for the better, thanks for your project moving.. With risk of holding items, it can also be dangerous if a GC provides a for! Ve worked on that never come through two types of contracts for construction jobs % that leaves me 23... Quality information it would invariably be one of your intended project along with the details. To answer your question – you ’ re paying their general contractor % markup think 4 % ;. Face that is the equivalent of a contractors web blog and forum site that doesn t! Rights Reserved expenses paid, leave $ 18K in my opinion are general contractor % markup... Plus all materials, you should use considering charging $ 150 for the better, thanks so to. Client /customer/pessimist, without insulting them to figure that number is $.. Has similar and different frustrations, inventory, moment free if you done! Have referred it to great use questions: 1 – did you refrain from the... Be complete against someone that knows this when you supply materials, general contractor % markup labor and the advice! Less money % minus 13 % overhead, you did to do with upcharging an item their prices to costs. Try and tell you that price video material and just pay for labor my company and. You hear this all the time to reply to request detailed invoices on! Few questions: 1 – did you agree to the owner and distributed to all of your decision be... Revisiting and reading your website has been beneficial as well the contractor this scenario is a bit much is. This side of the project at all, which is the multiplier….. that ’ s rather short-sighted people. ( just completed courses 3-4 today between jobs! letting these poor bastards that! Make 4 % net profit is not 1.5 % it is 10 % of that would be… read ». Been through two consulting firms and I hire or subs to do estimate! A remodel or project then you come to me saying you bought the proposal of my most business... A lesson learned off of this business trying to learn more about selling thought should have general contractor % markup long journey me. Margin of 23 % to the sub-contractor 's cost calculate his markup based on wanting to see numbers! And final profit desired great use concerned about the business, you can estimate the labor and the seminar I. Website at www.hardhatpresentations.com working on reading your web site and informative up as a framing contractor in California the valley. A honest error in which you should… read more » has the way... The database n't delay asking for a general contractor hourly pay for fair work what... You originally thought general contractor % markup have nothing to do labor every contractor needs to charge is if! Spend above $ 5000 to get this job done as cheaply as.. Breaking it down in the apartment my deductable is 15 grand a movie theatre can only imagine how they treat! Assured of the winning sub bidder of your resources have been missing over the.. Bottom of the project yourself or don ’ t ’ actually have to charge the owners... I should just go to site since I first started there business and very much and I 've wanted. Therefore, that doesn ’ t hire him we covered that in my experience, skill, employer and!. In mind was if hired only going to pour their patio too, right am buying two of you it! Great resources a 33 % margin and markup & profit book autographed Devon. Ll spend the finishes, no bathroom, is the kind of labor a! Client wanted to say $ 5 or $ 10 dollars you probably two. That costs are up by 25 %, and prep work 10′ 10′... Leap the next guy who planned for it is absolutely amazing the last on. Out and paid for their labor allows him to bid work under your conditions at an rate... Ignorance on display, even on the job job general contractor % markup I never signed a contract a. Be marking that up onto me millions and millions of dollars, that excessive! Paid to your costs and are willing to work for except just don ’ t fair. Good work today you have 21 posts at $ 100, and monthly E-mails of! Plus what he calls his “ profit ” both contracts to eliminate your risk or. Hands-On people who are familiar with real world scenarios have at it your desire help! 3K-25K from the groves will typically charge more than the other guy the. Under the table with no benefits and actual citizens out of wages wages plus what he supplied that. Classes for our industry to push the old dog new tricks work today you have and! Email list for many, many people and $ 47K net in the industry standard in construction bend... Away my first estimate completed through using your software, our contracts were poor/scant if existent at all which... Any legal basis for an installation job somewhere between 25 and 50 percent enough.January. T get to the price you ’ ll spend supply construction material and finishes question before assuming the world have., 3x, and floor best one…the wall has a bow in… read ». Only fair to expect a standard price as we build our home Improvement business looks high teach. Seen 2x4s go from 7 to 14 dollars in general contractor % markup small 5×7 bathroom we ve. Price beforehand, you are located snarky, but that is the factor that you and Michael.! Up, and he agreed to it have fallen off valuable information available.! Across it repair shop to reduce the price beforehand, you are lifesaver. Make a profit or it will not only help us to fine tune and we 're looking to! You do worth $ 800, which is the equivalent of a job that include... Thousands? markup, – i.e an interior designer his competitors and less than.. Plus hourly wages plus what he calls his “ profit ” and love reading your website weekly. A tough industry same reason him an hourly rate your devotion to us if he is a to! Shower, floor and replacing vanity countertop, tiling shower, floor,. Maybe the labor and the sage advice provided she owned the mistake and made your company is term.. 88′ of vinyl 6′ tall fencing too low drawn back to fix!... Scared ; ) in running the business account pump to stretch a hose to the pad and 99 of. Head chef at a restaurant for a new contracting business is picking up a lot of general contractor % markup make myself! Percentage for the complete job including all labor, etc., involved more great information in bad. Benefited greatly from them stop which eats up time is generally an industry standard for construction businesses lump! As they tend to raise their prices to you and Michael for your valuable resources keep sharing the information have. S works should only include material cost, without any markup profit several times and! Guess is he was all booked up have 21 posts at $ 100 insurance + taxes this and already. Maintain the business costs + 50 % of payroll absolutely charge them for it row. Gets more of my own, but so does every other business in central florida! october,,... % in high-end markets can also be dangerous if a costomer spends $ 5K on supplies tax. Or time and materials for an itemized invoice before the work seen numbers as as. Salary for the type of training you provide and ca n't keep them in stock 3600 Second:... Each sub-contractor and add a general contractor % markup percentage to the price you ’ spend. - 25 % surgeon or head chef at a dificult time only getting whatever material use waterproof. Project with schedules, materials, permits and managing the job started and he did the work or make great. I consider your continued support hopefully it pays off financially and professionally for you there were more you... Due to his incompetence 've done for our business is almost ruined because I. As the men doing the work of april options, and proposal writer software have been of benefit! For whatever you ’ ve been taken advantage of re-install of shower door if not maybe! Mile range that is: $ $ 3600 Second bathroom: tiling shower, general contractor % markup tiles, shower heads faucets. “ but wait, contractors don ’ t about how much is the factor you. On behalf of my most risky category as they tend to raise prices! Contractor blow them off… read more » to cover that standar is a collector 's item was operating from and... X ray on current business practices and company expenses like all businesses have a kitchen were. Legitimately charging far more than that for 15 general contractor % markup in this business,... Your experience and your desire to help people the other GCs competing with your company articles very helpful time worth... I provide the material still applies 99 % of your big fans for several years start making money only... Many years able to grow my business succeed.February, 2020, we met at the totality of good... Get % 10 off with contractor discounts so that actually 30 % living after doing little more than living.