Quoting Time And Material Remodel Job

bjohnson

I have been doing remodel work for a number of years and have decided to start my own business. I am looking for input on quoting a time and material job. This seems to be the popular bidding process in our area.

I have a charge account at several supply houses so I assume I would set up an account name for the job and bill all materials for the job to the account. Then at the end of the job do I mark up the total amount of the materials w/ a certain percent? If so what percent?

If I have three guys on the job paying them hourly and one is working for $15, the other $18 and the lead at $25 how do I mark up their hours?

How do I sell these markups to the customer?

mahlere

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john elliott

I don't work time and materials myself, but if I was a home owner I would assume that I was paying the T&M contractor for his time, and that I was paying the invoices for the materials and sub-contractors.

I don't know why I would have to pay a mark-up on those other costs if I was already buying the GC's time. If the idea is that the contractor has to take time to oversee the other peoples' work then it would seem to me that that time was already being paid for.

John

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Ed the Roofer said "John too, in his crass and blunt demeanor.............."

Ted W

Almost all my work is T&M. I don't mark up materials because I'm paid by the hour to do the shopping. There is occassion though, when the HO want's to keep the reciepts. Then I have to explain that these are MY write offs, not theirs. Their reciept is the one I give them at the end of the job, which reflects T&M. Sometimes they still don't get it, but then it's their problem. The receipts leave with me when the job is completed.

Anyway, I don't mark up materials because I'm paid to fetch 'em. If I worked flat rate, I would mark up materials probably 5 to 15 %, depending on the overall cost.

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Magnettica

I sure wish that when I go out to either a concert or sporting event that they charged me only time and material for the beer I was buying.

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Tscarborough

If the Owner pays you upfront for the materials, as well as for time spent estimating, gathering, and for time lost waiting for special orders, and for mobilization costs, then you should not markup materials. Otherwise, you are, well, there is no other way to say it, you are a fool.

mahlere

add to that warranty work and anything else that is unforseen.

john elliott

What they are charging is not cost plus, ie, their cost plus a markup, but "What the Market will Bear" which is a different and more modern charging system, and one which will make more profit if used correctly

John

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Ed the Roofer said "John too, in his crass and blunt demeanor.............."

thom

Look at the way insurance companies calculate the "correct" amount to pay. They include markups on materials, include labor at a standard rate that includes overhead (insurance, taxes, holidays, vacations, other days off, inefficiencies etc) and management time.

You will have damaged/lost/stolen materials. If you don't mark up your materials it's entirely out of your hourly wage. You will have warranty repairs that are the result of materials. You will have call backs that aren't the result of anything you did but you will pay to fix the problems. If you don't have a substantial markup, how are you going to pay for those things?

Magnettica

How is that differnt from marking up 40% on small jobs (less than $1k), and marking up only 10% on large jobs (over $100k)?

Isn't that also "what the market will bear"?

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