Average Mark Up

galanbro

I have been quoting several jobs in my area and it seems like I am always the highest bidder. I normally markup up my jobs between 30 to 40%. What would be a good markup in order to be competitive and profitable at the same time?

AARC Drywall

that is were you have to do your homework....you might be purchasing your materials higher, and adding your mark-up on...no chance of work for you...
find out what the costs are by other companies,,,,compaire yours, and go from there...

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Profit is NOT a dirty word....Cheap is....

galanbro

I have checked the pricing on our material, but we are getting really good pricing. I was just thinking that maybe i am marking it up too much. I have heard that 15 to 20% is industry standard. I just think that sounds to low, and leaves no room for error. Call backs are tough when you bid so low. Thanks for the reply though.

maceycon

I add a % for contingencies
I add a % for Profit
I add a % for Markup. The markup should cover your operating cost. We don't know what your operation cost or annual revenues are so we can not tell you what your markup should be. You need to figure out your cost to do business. Insurance, advertising, office help, etc etc and than figure out your target revenues and get your % form that.

If you are losing jobs because you are too high and you need 30 - 40 %
markup than you need to cut expenses so you can bring your cost down.

Option 2 would be to increase your revenues.

30 - 40% is a lot higher than me, but my expenses maybe lower or revenues may be higher or both.

I read this book a few years ago and it helped me understand it. Markup & Profits a COntractors guide. YOu can find it on Amazon.

AARC Drywall

here is an example of my company...

lets say we are going to board and tape a new home 1200 sq foot home top floor 8' and basement 8' so that is now 2400 sq feet.
there will be approx 8200 bf drywall going into that building.

We can board that house in2.5 days at a cost of $ 15000 to the contractor..
Office expences are approx 4c foot.
Contractor pays for fuel, and dumping (built into cost)
The boarding end including materials with 10% to 12 % proffit on materials plus labour is just over $8000.

The taping is diffrent, because i sub it out, but i still make money on it.. on average $900 a house give or take.


I will make approx 20 to 30 % proffit on each job...but some are more some are way less..
If this was a home owners house i would be about 3% higher,, but since its a contractors home, i give them a bit of a break.

__________________
Profit is NOT a dirty word....Cheap is....

galanbro

Thank you both so much. I really need to go back and review some of my bids.

boman47k

So you charge somewhere around $50 per sheet (4X8)? Well, I guess you use 12ft.

Anyway, how many men on a job like that?

AARC Drywall

on a job like that its 3 guys boarding and 1 taping.

__________________
Profit is NOT a dirty word....Cheap is....

neptune

man i wanna sling some board around with a good crew again, my partner now is greeeeen and we only average around 1200-1500 sq.ft a day...


i remember with my old partner in canmore, AB, we would sometimes pull 1k a day ....each

AARC Drywall

yea...if my guys dont average 2800 a day..hell has no flury.

__________________
Profit is NOT a dirty word....Cheap is....

Preacher17

10,000 bf how long will it take your taper?

AARC Drywall

start to finish textrued prime and textrure ceilings 10000 bf all conditions right...5-6 days..we have done it in 6 days with 1 day off for drying..

__________________
Profit is NOT a dirty word....Cheap is....

thom

As a general I really don't care what my subs costs are, I care what my costs are. Of course my customer doesn't care what my costs are, only what their costs are. I'm not in a position to pay you more because you have a college degree or a kid in college because my client really doesn't care.

I break the job down just like the subs do. There are guys who just want to bid hanging, guys who just want to bid taping, guys who include material, guys who only do labor, guys with w/c and guys without. So

I break the job down just as though I were a sub. I price material myself then ask for bids. If your bid doesn't include material, I add in my cost for material. If you don't have comp I add in my cost for your comp. When its all done, I have true costs to compare. You can bid labor, labor plus material, and hanging, taping, or both.

As the market continues to decline you will find increasing numbers of guys who are looking only for wages, probably lower wages than they got last year. My customer knows that too. My customer is looking for a real deal and I can't provide that or get the job if I pay more than my competition.

galanbro

So going back to our question. What is a good mark up? Will 20 to 30% be a good competitive market. 20 being volume and 30 being a one shot deal. For example a Home Owner at 30% and a General Contractor at 20% or even 15%. I just think 15% is just too little, but this economy is not helping so get what you can get huh..lol

Capt-Sheetrock

Of course it all depends on the market in YOUR home town. Around here, there is no market up,, being there is NO building happening, so what work is out there is just a teneey weeny bit above cost period. The way I go about it,,is,,, if I'm not getting any bids accepted, I MUST lower my bid, or just ride by and wave at Poncho.

The economy is colapsing so fast, that trying to figure out a good approach is an endevor in frustration. Some times, the norm just won't work. As for me, I'm just a drywaller, its all I know. I remember the Carter years, and I know that it will get better, but not tomarrow. The ones that will survive these times and dems, are the ones that keep at it, no matter how they have to survive. The people that refuse to lower their mark-ups won't be there after the smoke clears. In other words, I've been doing this since the early 70's and if we are bidding the same job, and your figuring mark ups right now, I'll be doing the job and you'll be sitting at home talking about what a scab I am.

Classic Drywall

Wow 8200' in that house, my guys are wasting too much board or you guys hang your scrap. That house would take us about 9600' of board.
But back to the question from the OP, with the way things are going right now around here (cut throats and what not) we can NOT get 30% mark up. I don't know what work is like in your area but something to think about. Some company's are doing things with little profit just to keep their guys busy.

Good Luck

Joe....

Muddauber

2400' house, all 8' I would estimate 8400 bd ft.
That's floor space X 3.5

2400' X 4= 9600'. Way too much board. Your guys are cutting up board & getting paid for it.


As far as mark up goes, I'm lucky to get 10 - 15% for new homes now. The only work I can make any money on is Additions, basements & remodels.

bwalley

I am a Building Contractor and a A/C Contractor, I have found drywall subs to be one of the most difficult ones to deal with, now on larger jobs I do it in house, and on smaller jobs a lot of times I end up doing it myself, just to avoid the hassles, I am tired of guys telling me how good they are, last guy couldn't stop telling me how great he was, but my 13 year old daughter could have done a better job.

Find out why you are the highest bidder.

Your labor may be too high, do you pay guys by the hour that drag the job out because things are slow?

Do you have a bunch of smokers that waste 2 hours of YOUR time per day on 'their' smoke breaks.

Do you pay guys by the board and they waste a bunch of boards to get the board count up?

Are you getting good pricing from your suppliers? You need to check, just because their price was competitive in the past does not mean they still are.

In a tight market, 30%-40% may be too high, which apparently it is, you may have to cut back in these lean times to survive, start eating hamburger instead of steak.

A lot of guys in my area, (Florida) are dropping like flies and some of them are trying to gouge people because they are slow, so they try to make all their money on the few bids they get called on and end up just getting deeper in the hole.

I am having a hard time getting a sub to pressure wash, relevel and seal some pavers, (1500 ft2)it is a 2 day job, that would pay pretty decent, but for some reason around this time of year no one wants to work, but they cry things are slow.

galanbro

You are right, 30 to 40% seems a little high with the amount of work and competition out there. As far as checking my prices from my suppliers, I do that almost everytime I bid a new job. I believe in trying to get the best price out of my suppliers. My workers, I keep track of them on a daily bases on how much sheetrock was installed and how much is expected of them. We have very hard working guys. I thank you for your advice and I will try lowering my margin to about 15 to 20%, just for the meantime. I hope this works...thx

platinumLLC

Have you sat down and figured out your operating costs? There are alot of threads on here about how to figure what you need to charge to stay in business. When you do this you will need to figure out your overhead, to do this you will need to figure out how much it costs you to operate on a daily basis. Gas, insurance, office time, vehicle payments, vehicle insurance, etc, etc, etc. After you figure this out you will see exactly how much you NEED to make to break even and then put your profit on top of that. Then you can see how your 30-40% lines up with your new bid and see how far off you are. Like mentioned if your always the highest bid you might need to figure out how much you can drop it without loosing money on jobs. In my opinion it is better to break even(as long as your still getting a check also) and keep your business afloat in these tough times than to be the high bidder and not get any work. There is so many variables on how to price that only you can come up with a price in the end.

If you are getting charged more than the next guy for materials than you are already at a dissadvantage. If you are bidding against other companies that don't pay workmens comp, liability ins., and only pay thier guys min wage you are really at a dissadvantage. If you are getting charged more than your compatition for materials and than do a % markup you are always going to be the high bidder. That is why i figure out how much i need to make on a job to come out even(always include your own paycheck into this) and then add some profit on top of this depending on the market conditions. This will let you know your bottom price and you can go up from there. It takes a little longer to do your bids than just using a percentage but you will have a more accurate number in the end. Do you know how much higher you were than the other companies? Hopefully some of this makes sense but in the end only you will know the variables that can make your bids more competative.

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