what is a reasonable profit percent - Contractor Talk - Professional Construction and Remodeling Forum

saucedo80 · 07-14-2005, 12:04 AM

hello guys. just a quick question. what is a reasonable profit percent?
I know we all want as much profit as possible, but what is reasonable without affecting the flow of jobs coming in?

**Teetorbilt** · 07-14-2005, 12:09 AM

My base is 35% for general stuff. For what I do best, it can go to 500%.

Bjd · 07-14-2005, 04:22 AM

Before you think profit, you have to add in all of the operating factors.

With those numbers dialed in you can design what you NEED to operate your business.
When you get those numbers, just add in what you would LIKE to make.

Put the two together and see what you got, you can always adjust.

Sometimes I try this as I am sure it happens to me, call a comepetor for a price over the phone as you know what you charge, and just see whats hidden under his skirt.

BJD

**Teetorbilt** · 07-14-2005, 07:15 AM

There should be a few threads about this in the archives.

Mike Finley · 07-15-2005, 05:12 PM

Profit percentage based or after what? There are so many to choose from - mark up on materials, mark up on subs, mark up on labor ect... I would mark up for the lead left behind on the customers framed walls from my pencil if I could.

electro · 07-15-2005, 05:33 PM

First the true meaning of profit must be determined. I feel it is the money a business makes on top of all their costs both overhead and direct. With this in mind, Base your profit on the exposure or risk each individual project requires. (i.e. a GC who provides a clean work site, without other trades in your way. Who pays within terms. Who treats you and your staff with professionalism. We would put a lower profit margin on vs. The slow paying, difficult to work with etc.. Reason I want more of the good client.

Brian Drucks

Grumpy · 07-16-2005, 11:18 AM

Every job is different and the answer to all jobs is: As much as I think I can get. I think you will find most guy target somewhere from 20-50% on their bread and butter type work. Also I think you will find the larger the job the less markup. For example, on repair work I too can markup 500%, but I could never pull that off on a roof replacement.

I markup a little different than most guys. I figure my direct costs for the job then add in my projected overhead based on an estimate of how many days the job will take to complete, then add in how much money I want to make on the job which is quite often an arbitrary number plucked from my imagination.