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Old 05-01-2009, 07:30 AM   #1
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Subcontractors


Do any of you do much subbing out? I have a job Im trying to sell and there is some concrete work that needs to be done. I was going to mark up the subs price by only 5%. I felt this # should probably be higher. Any advice? How do you guys handle subs?
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Old 05-01-2009, 07:40 AM   #2
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Re: Subcontractors


I for sure add more than 5%, at that rate you won't even cover your overhead.

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Old 05-01-2009, 03:19 PM   #3
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Re: Subcontractors


The job consists of about 480 sq.ft. concrete porch. I would build the roof and install vinyl railing around. So I will be making money on that part of the project, but was just not sure if there is some kind of industry standard for marking up the subs concrete work. By the way . This is a wrap-around porch.
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Old 05-01-2009, 03:34 PM   #4
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Re: Subcontractors


25% mark-up at least. How can you go any less???
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Old 05-01-2009, 03:48 PM   #5
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Re: Subcontractors


10% is a good minimum. Subcontractors would bid at least 10% higher if they were bidding for a homeowner vs a GC in most cases.
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Old 05-01-2009, 04:18 PM   #6
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Re: Subcontractors


My minimum has been 20%.
As with everything else, it depends on the size of the job.
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Old 05-01-2009, 09:29 PM   #7
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Re: Subcontractors


Another project Im working on>HO got upset because somehow he found out I was marking the subs work up 5%. So upset I didnt get the job. This may be one I look back and be thankful I didnt get. Im by no means prejudice at all, but HO does happen to be from India. Haggles like crazy. Is this a cultural thing in anyone elses opinion or experience
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Old 05-01-2009, 09:42 PM   #8
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Re: Subcontractors


Quote:
Originally Posted by Quinn View Post
Another project Im working on>HO got upset because somehow he found out I was marking the subs work up 5%. So upset I didnt get the job. This may be one I look back and be thankful I didnt get. Im by no means prejudice at all, but HO does happen to be from India. Haggles like crazy. Is this a cultural thing in anyone elses opinion or experience

next time you go to buy some smokes from the curb store.. try it.
I get a carton for $5 cheaper at the curb store
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Old 05-01-2009, 10:32 PM   #9
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Re: Subcontractors


Quote:
Originally Posted by Golden Rule View Post
10% is a good minimum. Subcontractors would bid at least 10% higher if they were bidding for a homeowner vs a GC in most cases.
I charge a GC more than an HO.

WHY?

The HO pays as soon as I am done, the GC wants to make you wait. You have yo get your intrest up front.

Also, The GC wants to make changes with out allowing for change orders for the sub.

Just my .02 and expericence ans recently (again) as today
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Old 05-02-2009, 10:55 AM   #10
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Re: Subcontractors


Quote:
Originally Posted by Quinn View Post
Another project Im working on>HO got upset because somehow he found out I was marking the subs work up 5%. So upset I didnt get the job. This may be one I look back and be thankful I didnt get. Im by no means prejudice at all, but HO does happen to be from India. Haggles like crazy. Is this a cultural thing in anyone elses opinion or experience
Yeah it's a cultural thing, they all do it. Do yourself a favor & stay away from that type of customer. If you have to deal with those types start out higher than what you want to give yourself some room to move down & still get what you want.
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Old 05-02-2009, 09:12 PM   #11
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Re: Subcontractors


20% you have to guarantee the subs work don't you? Yeah it's a cultural thing, Koreans' are like that too. Have a great customer, loaded, he's Russian and fights like a pit bull over every dollar. Never wins, pays full pop, and laughs when it's all over. He tells me it's just a business tactic, not at all personal. I have lots of fun with him, like to see how much I can get him to pay.
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Old 05-02-2009, 09:19 PM   #12
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Re: Subcontractors


So while the concrete work is being done, who's supervising him, who is calling him, who is making sure everything is ready for him and if there is a problem who's the HO going to call?

I'd be thinking greater than 30% markup should cover you.

No comment on the cultural issue other than your playing in someone elses backyard!!!
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Old 05-02-2009, 09:26 PM   #13
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Re: Subcontractors


Get a little creative and don't mark up but put in management fees.
But really, upset over 5%, that guy is just a better businessman than you about negotiating.
As someone said, if there's a problem, he calls you not the sub.
Pure baloney, and Indians are different, culture is a stumbling block for many people, but everyone except for total dummies know you have expenses. Its OK to recognize the differences within cultures, and to act accordingly, its not OK to treat them badly. You did the right thing not taking that job.
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Old 05-02-2009, 10:14 PM   #14
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Re: Subcontractors


I have been turned down plenty of times before but this one did bother me because he tried to make me feel as if I was being untrustworthy. Never had that before with any customer. I did come to find out that he did something very similar to this to the guy who used to be my boss. Lesson learned. Next time I will be extra cautious. I sure did waste a lot of time on this one.
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Old 05-02-2009, 11:48 PM   #15
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Re: Subcontractors


Quinn,
If your concrete guy bails on you, will you be able to find someone to replace him for the same cost?

How much do you know about concrete?

If the concrete sub does a poor job, can you make him tear it out or fix it?

If the sub does a poor job and bails on you, can you afford to have someone else tear it out and re-pour it?

After answering these questions i think you'll agree that 5% isn't enough compensation for the possible headaches and responsibility you will be taking on.
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Old 05-05-2009, 07:44 PM   #16
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Re: Subcontractors


It depends how you hande the contract ? If you are holding the contract and assume the liabilities as a GC your minimum should be about 28% ( or the same as Title company projects)
If you are giving the work to the sub to contract, then you should get about 10% to 20% from the sub. this keeps you out of the process( unless he screws up and the customer will still blame you)
IF YOU DO ANYTHING FOR FREE YOU ARE GETTING PAID WHAT YOU DESERVE!
p.s. free is under 10%

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