Im Curious... GC Markup On Subs

Cole

What are you guys marking up when a sub will come in and do the work.

The reason I ask, is because I heard some crazy markups from other GC's here in Dallas.

I am talking small to medium jobs.

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jmic

Starting at 20%, and up

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Joe

ruskent

I am just starting to use subs. I am going to try to get 20% but i do not know if i will be able to pull it off on every trade without making my pricing look outrages.

I guess i need to sell the customer on the advantages on my handling the entire job vs the homeowner hiring different contractors.

I am selling pools and high end landscapes. I am subing out almost 50% of the jobs i am designing right now. Irrigation, lighting, fence, masonry, gunite pools, electrical, plumbing for gas lines. In alot of instances the customer would normally hire a pool company, a landscaper, a irrigation guy, etc.

I am going in trying to grab the entire job. Trying to convince the home owner that i will get the job done faster, with better results, on time and on budget.

Some people do not like the fact that i am going to use subcontractors. They say they could just GC the job themselves. We all know how that would turn out.

Cole

Dont let them worry about you using subs.

As long as you are professional about the way you pull things off, the customer wont care.

I can see where you will have different markups, because you will have so many trades involved.

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Cole

It is selling yourself basically to the client.

You want the client to trust you with handling things, from start to finish.

I always tell them it is a lot easier having to call one person not 15.

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ruskent

Main thing i point out is that it eliminates finger pointing. They don't have to worry about the landscaper blaming things on the pool company, the mason screaming at the irrigation guy, etc.

Also, by doing everything at once i thnik i can bring the cost of the projects down a little bit. If the electrican is already on site, it is easy for him to run electric up to the driveway pillars/lamp post. I get the excavator to excavate for ALL the landscaping at one time, not just the pool. Heck if i am paying the excavator 75 bucks an hour to truck hill to a dumping site, i mine as well have him stop at the wuarry and pick up some crushed stone on his return trip.

By having each sub make the most out of his time at the job site i think it should lower the cost and allow me to have a higher mark up.

Cole

I am assuming you are talking about new construction?

Taking the landscape/hardscape/pool plan under one roof?

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realpurty2

It depends on the scope of work. Typically we only sub the excavation work but Site Supervision Fee for any sub is normally 10% to 20% in our area.

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ruskent

Yes.. Job right now i am bidding involves the following subs: excavator, mason, irrigation, fence, lic plumber, lic electrican, and pool co.

Rich people buy a new house and want everything done at once.

Chippewabuilt

I don't do the work any more and i sub 100% of my work out and keep a close eye on the jobs at all times and get about 25%.

Teetorbilt

Years ago, I found out that contractors were marking me up as much as 45%. I figured that if they could sell my work for that much, why can't I? Since that epiphany I have lost some, gained others and am doing quite well on my own.

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dirt diggler

DO NOT price your job like this ...

Price it what it NEEDS to be


once onsite - if you can run into some lucky charms - take them, hug them --- but DO NOT base your pricing off this


your electrician is gonna charge you .... doesn't matter to him whether you think it's easier for him to do it tomorrow or next tuesday

mdshunk

Only when you have a well-established, time-tested track record with your subs of having nice and efficient jobsites will your subs prices start to come down (allowing you to markup more to get the same ending price). This idea will take some time to prove yourself to your subs.

ruskent

What i am saying is, i am able to make more money on the job in those instances without my prices looking grossly inflated if the HO prices the job out hiring each trade himself.

Ofcourse it will cost me less to have the electrian hook up 5 lights on one job, compared to 5 lights on 5 different houses. Or 5 lights on the same house at seperate times.

ruskent

Alot of things only take 3/4 of a day, or just longer enough where the sub can not go to another job that day, so i would get billed for a full day.

Like if i have a excavator digging a hole for a pool, it would take him about 5 minutes to excavate for the patio, where it could take me up to an hour to do it and get the dirt moved with my skid steer.

Now if i had the excavator come to just dig the patio, i'd kill his full day after he loads the machine up, drive to the job, unload the machine, perform the work, load the machine back up, and drive to his yard.


Maybe, i am out of my mind, but in my head it atleast makes some sense.

mdshunk

Yes, the way you clarified that. You first said, "having the subs make the most out of their time", and I thought your were talking about the efficiency or pace at which they work. What you're talking about making sure that a given sub can do all of his work at once... all in the same day or several consecutive days. That's just good management. Bravo.

ruskent

Ok good. With this business model i am trying to use, if i come in 30k more on a 75k job, then if the HO highered each trade himself, i'd get no jobs.

I need to find ways to do things more efficently to get things done cheaper.

Grumpy

If we are working on a negotiated price list with the sub, and they are not bidding the job, I mark up their labor 40% and supply the materials which are also marked up 40%. I know some guys who are in the same setup as I, and provide materials at cost, but markup labor 100%. The end result is nearly the same.

If the sub is bidding the job and supplying labor and material my markup is 20%. Depends on the size of the job and how much I want to make in terms of dollars not percent.

joasis

Depends.....my one sub crew, 40%.....trade subs 10 - 20% depending on the scope of the job.

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Mud Master

My builders/developers usually mark me up anywhere from 30%-55% depending on size and scope of project. That is all commercial.

The residential builders(Custom/Spec Homes,Additions) I work for I only hang and finish for them, as opposed to metal framing, acoustics, and the occasional design/build I do in commercial. And anything under 1200 sheets I sub out to a good buddy of mine, as I am honestly to busy to leave my commercial sites for anything less. And after crunching some numbers, compared to what I make off of him per board i'm at around 25%. I have no idea what my residential builders are making off of me, i'm guessing in the 20%-30% range. When they do spec homes though, which is rare and are usually very large, and in bulk(3-8 homes at once)..I have no idea as it is usually put on the market long after I am gone, so I couldn't know what thier marking up when they have no one to mark up to.

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