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Your Costs As A Percentage Of Gross Income? Please Share!!

 
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Old 02-07-2013, 11:17 PM   #21
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Originally Posted by CScalf View Post
I agree with the commercial part, but on residential I would want to be on site at least sometimes, that's just me tho
Oh the boss stopped in every so often. He was not a nail banger though. Never had bags on in his life. Paid well, and appreciated craftsmanship

But thats not my bag
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Old 02-09-2013, 09:57 AM   #22
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Re: Your Costs As A Percentage Of Gross Income? Please Share!!


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Originally Posted by BamBamm5144 View Post
5% materials
10% Labor
85% profit
I must be doing something wrong!!
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Old 02-10-2013, 08:18 PM   #23
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Originally Posted by Warren View Post
Obviously these numbers will vary wildly depending on location, type of work performed, class of neighborhood worked in, etc. What point, if any, are you hoping to make?
Well, actually, I'm not sure those % should vary wildly.

The types of costs with doing business are pretty much the same for everyone in this country for sure, right? Don't you have those same costs?

I see you are a framer, though, so you probably have mostly builders as customers? Gonna skew the numbers for sure, but would be interesting to see where the marketing and sales money goes. I guess what I'm after for my point is, are you making a profit or just have a job you like?

Notice I said having a job you like. nothing wrong with being a sub, not making a profit, and leaving all the headaches to someone else if that makes you happy!

But I did post this in the business forum, so I think its odd when people try to shut down a conversation about business.

I know if I learned to track my percentages when I first started, I would have had a much shorter curve to success.

Since there are always new people joining and reading these boards, I thought it would be cool to talk about this.
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Old 02-10-2013, 08:18 PM   #24
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I must be doing something wrong!!
HA! You must be doing something right!
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Old 02-10-2013, 08:25 PM   #25
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Re: Your Costs As A Percentage Of Gross Income? Please Share!!


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Originally Posted by Littlefield View Post
Well, actually, I'm not sure those % should vary wildly.

The types of costs with doing business are pretty much the same for everyone in this country for sure, right? Don't you have those same costs?

I see you are a framer, though, so you probably have mostly builders as customers? Gonna skew the numbers for sure, but would be interesting to see where the marketing and sales money goes. I guess what I'm after for my point is, are you making a profit or just have a job you like?

Notice I said having a job you like. nothing wrong with being a sub, not making a profit, and leaving all the headaches to someone else if that makes you happy!

But I did post this in the business forum, so I think its odd when people try to shut down a conversation about business.

I know if I learned to track my percentages when I first started, I would have had a much shorter curve to success.

Since there are always new people joining and reading these boards, I thought it would be cool to talk about this.
I think you are wrong on most of those points. If I wasn't making a profit, on top of paying myself a wage, I would have become and employee a long time ago. As far as leaving the headaches to someone else???? You really have no clue about the type of service I provide.
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Old 02-10-2013, 08:34 PM   #26
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Re: Your Costs As A Percentage Of Gross Income? Please Share!!


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Originally Posted by Littlefield View Post
Well, actually, I'm not sure those % should vary wildly.

The types of costs with doing business are pretty much the same for everyone in this country for sure, right? Don't you have those same costs?

I see you are a framer, though, so you probably have mostly builders as customers? Gonna skew the numbers for sure, but would be interesting to see where the marketing and sales money goes. I guess what I'm after for my point is, are you making a profit or just have a job you like?

Notice I said having a job you like. nothing wrong with being a sub, not making a profit, and leaving all the headaches to someone else if that makes you happy!

But I did post this in the business forum, so I think its odd when people try to shut down a conversation about business.

I know if I learned to track my percentages when I first started, I would have had a much shorter curve to success.

Since there are always new people joining and reading these boards, I thought it would be cool to talk about this.
That is ridiculous. Subs dont work for wages any more than builders, at least the good ones.

Why would there be less headaches as a sub? Most builders are azz's, makes for a demanding client base.
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Old 02-10-2013, 08:44 PM   #27
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Originally Posted by Warren

I think you are wrong on most of those points. If I wasn't making a profit, on top of paying myself a wage, I would have become and employee a long time ago. As far as leaving the headaches to someone else???? You really have no clue about the type of service I provide.
Warren, easy big guy, I think you are taking my comments way too personally. Remember, there are thousands of other people I'm talking to, not just you.

I was trying to show that some guys are fine with having a less "independent" type of business, and would trade that independence for a simpler business style. Please don't take offense, like you just said, I don't know you, therefore, im not trying to insult you.

Let start off again on a different foot. I've been a sub before, in the painting business, I know it's not all roses. I actually changed my business to have less headaches, and just deal with homeowners. Some guys think the exact opposite, so I was trying to accommodate them and draw them into the conversation.

What about you, what is the "less headache" style you prefer?
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Old 02-10-2013, 08:49 PM   #28
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Originally Posted by Jaws

That is ridiculous. Subs dont work for wages any more than builders, at least the good ones.

Why would there be less headaches as a sub? Most builders are azz's, makes for a demanding client base.
Subs don't work for wages any more than builders? I agree with only the second part of that, the good ones. Around here though, the good subs all either become builders, or transition out of new construction into homeowner driven businesses if they are good.

I'm north of Atlanta, semi rural. I know it's different in the city, and in Hilton Head where my cousin builds, the subs commonly make more than we do here working for homeowners.

Still, saying that most, or all subs make a profit, and wages, that's ridiculous, and I'd say most can't prove a profit if they tried. Just sayin, maybe you do, but the majority out there, nope.
Maybe the majority here since they are here to learn, even. But not out in the real world.
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Old 02-10-2013, 08:50 PM   #29
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Re: Your Costs As A Percentage Of Gross Income? Please Share!!


I think the "less headache" style is all self made. I know framers who go into a job not knowing or caring about anything, which in turn leads to headaches. Same holds true for any other trade, sub or not. Your initial post only made reference to costs as a percentage of gross income. I pointed out that those ratios are gonna be all over the place depending on many factors. I still have no idea how mine or anybody elses ratios would affect or help your bottom line. I agree that each person needs to track their own ratios to determine how they can improve or maintain their profits.
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Old 02-10-2013, 09:02 PM   #30
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Quote:
Originally Posted by Warren
I think the "less headache" style is all self made. I know framers who go into a job not knowing or caring about anything, which in turn leads to headaches. Same holds true for any other trade, sub or not. Your initial post only made reference to costs as a percentage of gross income. I pointed out that those ratios are gonna be all over the place depending on many factors. I still have no idea how mine or anybody elses ratios would affect or help your bottom line. I agree that each person needs to track their own ratios to determine how they can improve or maintain their profits.
Ah, I follow. You are thinking I'm asking for advice, because I asked a question.

I'm actually trying to get guys that don't track their ratios, to realize that they aren't. If you are that's great.

Every single contractor I've ever talked to that's grossing under $1m annual, doesn't know what they are doing, or what they are shooting for. Still waiting to be proved wrong, lol.

Not by you, of course, I know you just don't want to share, which I understand.

How about just the goal, not the actual, maybe I'll get more there? That's for everyone, not Warren, not gonna put him on the spot when he's willing to keep the conversation going.
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Old 02-10-2013, 09:12 PM   #31
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Re: Your Costs As A Percentage Of Gross Income? Please Share!!


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Subs don't work for wages any more than builders? I agree with only the second part of that, the good ones. Around here though, the good subs all either become builders, or transition out of new construction into homeowner driven businesses if they are good.

I'm north of Atlanta, semi rural. I know it's different in the city, and in Hilton Head where my cousin builds, the subs commonly make more than we do here working for homeowners.

Still, saying that most, or all subs make a profit, and wages, that's ridiculous, and I'd say most can't prove a profit if they tried. Just sayin, maybe you do, but the majority out there, nope.
Maybe the majority here since they are here to learn, even. But not out in the real world.
Im a builder, not a sub.

My plumber lives in a nicer house than many attorneys here.

One of our electricians has a lot of overhead and says he struggles to make a profit. The other has two guys and does very well.

My masonry contractor is a friend, he paid his house off (nice house) before he was 35, he went to africa last year to hunt, with my septic sub. Granted the mason has 30-35 employees and the septic guy has 2 crews.

My ex electrician lives like a drug dealer, has started and sold two electrical companies.

It is very rural here as well.

Not saying all subs make a profit, just most of the ones I use.
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Old 02-10-2013, 09:12 PM   #32
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I know a couple of those guys to which you speak. One was a GC who also built custom cabinets. He did really nice work, but I know his profits were dismal. I encouraged him to pursue the cabinet aspect more, because for him it was a better fit and more profitable. He left the trades two years ago and went back to school. Another guy, while still in business, is equally bad. He has built several homes, many additions, and also does some nice remodels. His scheduling is his downfall, but he is oblivious to it.

I am sure that neither of these guys tracked their costs very well. But in the end, other factors were also working against them. I know a few other guys who don't track very well, but are very profitable due to their strengths in other aspects. I probably fall somewhere in between. I track pretty well, can manage jobs well, but I just happen to specialize in a trade that is tough to be profitable in.
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Old 02-10-2013, 09:14 PM   #33
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It's been my experience that high overhead is the antithesis to profit. If you want to turn a profit you have to keep the overhead down, weather sub or GC.
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Old 02-10-2013, 09:18 PM   #34
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In fact, Id bet money most of my subs make more actual money than I do, salary or otherwise.

Besides, many people say they make a profit and only pay themselves 600$ a week, and some say they struggle to paying themselves 2,000$ a week.
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Old 02-10-2013, 09:20 PM   #35
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Originally Posted by Jaws
In fact, Id bet money most of my subs make more actual money than I do, salary or otherwise.

Besides, many people say they make a profit and only pay themselves 600$ a week, and some say they struggle to paying themselves 2,000$ a week.
Shoot- I'm happy paying myself $2000 a month
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Old 02-10-2013, 09:24 PM   #36
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Ah, I follow. You are thinking I'm asking for advice, because I asked a question.

I'm actually trying to get guys that don't track their ratios, to realize that they aren't. If you are that's great.

Every single contractor I've ever talked to that's grossing under $1m annual, doesn't know what they are doing, or what they are shooting for. Still waiting to be proved wrong, lol.

Not by you, of course, I know you just don't want to share, which I understand.

How about just the goal, not the actual, maybe I'll get more there? That's for everyone, not Warren, not gonna put him on the spot when he's willing to keep the conversation going.
1 mil is subjective, for a builder its not very high, a bathroom remodeler would make a killing.

Remodeling Magazines Big 50 boasts several firms under a mil every year.
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Old 02-10-2013, 09:29 PM   #37
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I hit about $800,000 last year and was freakin ecstatic about it- I bought my first house and first brand new truck. I have low overhead. 3 new homes a year is plenty for me to turn a reasonable profit. I made about 80k last year so that's 10% of my gross sales.
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Old 02-10-2013, 09:34 PM   #38
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Most under a million dont know what they are doing? I agree that many dont know the difference between a margin and mark up, or how how to make a Gant chart tracking overhead costs, or develop a critical path schedule that would pass on a major commercial project.


But I know a few nail bag GCs who can build a bad azz project, keep a schedule in a spiral notebook, manage cash flow and balance a check book. They dump a shoe box of receipts on their CPAs desk come March. There has been quite a few like that here long before you or I started up, probably be here when we hang it up.
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Old 02-10-2013, 09:36 PM   #39
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I hit about $800,000 last year and was frea ecstatic about it- I bought my first house and first brand new truck. I have low overhead. 3 new homes a year is plenty for me to turn a reasonable profit. I made about 80k last year so that's 10% of my gross sales.
Net profit is calculated after you pay your self a salary.

But it all spends the same
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Old 02-10-2013, 09:38 PM   #40
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Net profit is calculated after you pay your self a salary.

But it all spends the same
Oh- then I made about $0

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