Are your jobs really profitable? - Contractor Talk - Professional Construction and Remodeling Forum

Contractor Talk Articles · 02-04-2008, 04:24 PM

Do you know how much you are making on every job? How does your estimate compare to the costs when you complete the job? Is your margin comparable with industry standards? If your margins are higher than industry standards you better step back and be sure that you are getting all your costs to the job.

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hawaii · 03-05-2009, 05:24 AM

I know how much I make on every job. I don't count the monay every day but when I bid a job I know how much I will make . I can make a mistake maybe will make %20 more then I planned or %20 less everything depends on the job. I install hardwood flooring and usually have only one crew working for me and with me so of course everything depends how fast we finish the job but I want to keep the qulity of the work very high and time doesn't matter, if I make this %20 less then I planned then I will make the %20 more on the next project and at the end this willl pay off because I will asure mysefl and the client there will not be any problemms on the job. Plys referals.

Mr. Mike · 03-05-2009, 02:23 PM

Quote:

if I make this %20 less then I planned then I will make the %20 more on the next project

OK Lets say you make 20% less on 3 in a row, will you charge the next customer 60% more, I think that money lost on a job is lost forever there is no making it up!

floorinstall · 03-05-2009, 03:10 PM

I agree money lost can never be made up. The best you can hope for is to not make the same mistakes twice so you don't lose money twice.

hawaii · 03-09-2009, 05:05 AM

I have never said lost I ment 20% less then I planned that's a diffrence wirte here.
Of course when you lose monay this is eaither becuas you have made mistake and have to fix what you have done wrong and htis normally cost more then just doing the job rigth and when you made you estimate wrong.

Just price the job right.

buildpinnacle · 03-09-2009, 06:41 PM

I agree with Sarah's suggestions and try to accomodate the majority. The tricky one for me is Owner's time. We generally have 3 to 4 projects going at the same time and I spend alot of time at each. I also spend alot of time hobknobbing for the next project, estimating, meeting adjusters, etc. I finally mailed it in last year and just counted my salary and my project manager's salary as O/H b/c it is a nightmare trying to tag it to a job. I do well enough to remember to write down my mileage.

thinking4ward · 04-25-2009, 01:18 AM

Good article, Nothing I havn't read or heard before in some form or fashion but it's always good to get a reminder to keep on top of things. Most of us tend to let things slide when things are going good but those are really the times we should use to re evaluate proceedures and systems and make changes or adjustments. Even if it's just a good week, if you can buy some time to step back and take a look at things. Do it ! Before you know it you'll be back on the fast track and wish you had time to do some of the things she talks about. Beleive me I know. I've got three fingers pointing back at me!!! I get so busy then I'm frustrated because I'm not implementing the things I know need to be done. It's no fun having the " I need the next draw" syndrome. Then your making descisions based on getting cash in the bank, not is it profitable or efficient. I know I need to take the time when I have it to keep on top of things and not underneath !

Ms. Fix-It · 05-25-2009, 02:28 PM

I have a hard time figuring out profitability, so I am trying to get my operation tight enough that I have a relatively complete feedback loop, between labor costs, obvious materials, support materials, equipment costs, overhead, and the costs of my time and resources as the owner of my company. Being a handywoman service, my business is challenged to try to keep a finger on the pulse of many different sectors of the construction industry. Be it drywall, carpentry, masonry, painting, tile, or what-not, we have to do a complete research protocol on each specialization to determine profitability. Yes, we subcontract out things that are specialized to the point of being gnarly, or that it is prudent or necessary (read legal) to have a specialist in, but part of the appeal of our business is that we can take care of nearly everything for the average HO, and they don't have to have a miriad of strange people traipsing around their house.

My software is theoretically capable of doing a complete job cost analysis, but it is only as smart as the person putting in the data

. In truth, I still have no idea half the time if I am doing well and being competitive. I would love to know how other contractors have found their way through that process. Granted, if you only do one thing every day, the feedback loop is fairly simple. But if you are diverse, how do you stay current on the competitive side, but still make sure you aren't slowly putting yourself out of business, especially with changing costs...?

rbsremodeling · 05-25-2009, 04:37 PM

Quote:

Originally Posted by buildpinnacle

I agree with Sarah's suggestions and try to accomodate the majority. The tricky one for me is Owner's time. We generally have 3 to 4 projects going at the same time and I spend alot of time at each. I also spend alot of time hobknobbing for the next project, estimating, meeting adjusters, etc. I finally mailed it in last year and just counted my salary and my project manager's salary as O/H b/c it is a nightmare trying to tag it to a job. I do well enough to remember to write down my mileage.

You must find time for this, Our make an educated guess it is very important that you do so.

This is not a good thing to do. If i remember I will post the why and why nots

George Z · 05-25-2009, 05:14 PM

Quote:

Originally Posted by rbsremodeling

You must find time for this, Our make an educated guess it is very important that you do so.

This is not a good thing to do. If i remember I will post the why and why nots

Sign in and out when I have to do something on a jobsite, I do.
Now, isn't a field manager an overhead position?
If a salary is drawn and is part of the general hourly rate as are most salaries,
would you charge it again?
There are 3-4 jobs at a time to drop and pick-up equipment, check with the crews, annoy them, get them lunch etc.