General Contracting Fees

S&P Builders

Our buisiness is starting to grow and we are having to hire subcontractors now. The question I have is what is the normal fee we should be charging for our subcontractor?

C.C.R.

In MA. alot of the G.C.s I deal with add about 20% to what ever the sub is charging them.(that's material and labor total)

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dougchips

We keep 30%, but everyone has to find their own number. You need to pay your subs as much as possible to keep them happy and loyal. You also need to offer your customers a good value for your work. There is not a magic number.

GopherGirl

I work for a GC and we generally mark up our sub work between 20% and 35%, depending on the complexity of the work, how many good qualified subs are in that area of expertise, etc. Most of the time, I will bump it up if I know the project owner is going to be a pain in the caboose, lots of change orders etc. I call that my "aggravation fee" since I'm generally the one who has to deal with them.

Cole

20-30% should be the norm for a markup of subs.

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Stone Mountain

The standard here is usually 15% for overhead and 15% for profit.
That works out to 32 %.

When I am a sub to a contractor who has all his own employees, they usually mark me up 15 or 20%

When I sell to a customer, I mark up my material and labour around 45-55%. My labour is almost all subs, but I supply all material.

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jordanremodel

[quote=Stone Mountain;173609]The standard here is usually 15% for overhead and 15% for profit.
That works out to 32 %.





%15 + %15 = %32? now thats fuzzy math....

Teetorbilt

I know that some of my contracts have been jacked 47%.

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john elliott

100 * 1.15 = 115
115 * 1.15 = 132.25

John

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hurricane hogan

100 X 15% + = 115 X15% + = 132.25
SO the origninal 100 $ becomes 132.25.

he was 25cents short.

Point is we have to figure profit on top - after all cost are calculated.
WIth labor we need to figure the actual cost of the wage, benefits and administration and then add whatever profit margin we feel we need to survive on top of that. I know that compo is a alot higher in some areas and trades.
I go - cost of wage paid + 20% that I pay to the various parts of Gov. and bookkeeping. That gives me actual cost of the wage. Then I add 30%+ for profit to get my bill out rate. Rounded up or down to an even dollar. This makes a 20$ wage billed out at 32.
The reality is that there is still a cost of overhead being lost in there.
I often feel I am too low but there is a resistance at some price point depending on the competition in the area.
There may be more professional formulas out there, Trail and error have just shown me that I don't lose too much this way. guess I should have stayed in school.

joasis

Since I crew my own projects, except the mechanicals, I charge a flat 10% of the total dollar value of the project for GCing....I know a lot of custom home builders who are getting 20% or more, but 10 works for me, since my crews do most of the work on site anyway.

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jordanremodel

Hehehe.....oops..... I lump them togeter on the estimate....

dirt diggler

um ... happy/loyal/loving aside

you have to pay them

dirt diggler

basically, you need to make money off your subcontractors --- just as you would your materials.

How much should your markup be? I'm not going into it -- it's too late for novels

but ... make money. DO NOT just tack on 20% or 30% because everyone else does --- this will mess you up if you do it blindly.


AND

you WILL spend time with that sub. Whether it's showing them the job, taking the time to communicate, reviewing their work, etc.

CHARGE for this. and then make progress to the point where that relationship (with the sub) becomes so efficient that you can really start making some money.

Can't find one that doesn't need you to hold their hand through the job?? BS --- there are PLENTY of good workers out there.

You need to make money from them