Hi Guys,
After having been in business for a while know and struggling year after year guessing trying to estimate jobs some successfully and some not, I have a window between jobs right now so I decided to sit down and once for all eliminate this problem.
Thanks for the great info you can find here on CT, I stumbled upon the Sticky: Material Cost+Labor Cost+Overhead+Profit
I will appreciate your output based on your experience, as I got confused with the numerous info online with the Total Revnues and Margins etc.
1.Material Cost: A lot of contractors mark up the materials, Why? and How do I determine the %?
2.Labor Cost: in most instances if it is an employee he will cost in taxes about 40% in addition to his wage.
I was also confused about the labor markup, Why? and How? do I get the %
3.Overhead is pretty straightforward but the thing is my salary is included in the overhead and in my case that's the biggest item in my company overhead.
My company is small and I work in the field with my crew quite a lot, so should I pay myself as a skilled worker($$) which is at least 40 hours a week and in the same time owners salary ($$)?
4.Profit. I guess the most common number and the lowest I guess would be 10%. So in that case is it something that is related to the amount of my sales, and again I've heard on multiple occasions the Total Revenue which I can't possibly calculate as we built different projects and quite often provide just labor to big builders and GCs.
I'd like to stay competitive but I'd also want to be in charge and have a thorough numerical understanding of where I am going, so I understand these will sound like silly questions to most of you, but I am ok to look like a dummy now instead of 10 years later)
So, to recap 1. I am calculating materials+sales tax+??Mark up??
add 2. How many hours it will take my crew to do the job ( salary + 40%) I don't mark up the labor, but should I? Isn't it in the profit already, what's up with the labor mark up talk?
Add my billable hours working on the job site?
add 3. Overhead( insurances, licensing,gas, ?my Salary calculated salaryx40x300?)
add 4. Profit I guess whatever the market is willing to pay but no less than 10%
I do a lot of labor only jobs, and the jobs vary from decks to custom house framing so, Total Revenue is really, I'd say impossible to plan.
What am I doing wrong?
After having been in business for a while know and struggling year after year guessing trying to estimate jobs some successfully and some not, I have a window between jobs right now so I decided to sit down and once for all eliminate this problem.
Thanks for the great info you can find here on CT, I stumbled upon the Sticky: Material Cost+Labor Cost+Overhead+Profit
I will appreciate your output based on your experience, as I got confused with the numerous info online with the Total Revnues and Margins etc.
1.Material Cost: A lot of contractors mark up the materials, Why? and How do I determine the %?
2.Labor Cost: in most instances if it is an employee he will cost in taxes about 40% in addition to his wage.
I was also confused about the labor markup, Why? and How? do I get the %
3.Overhead is pretty straightforward but the thing is my salary is included in the overhead and in my case that's the biggest item in my company overhead.
My company is small and I work in the field with my crew quite a lot, so should I pay myself as a skilled worker($$) which is at least 40 hours a week and in the same time owners salary ($$)?
4.Profit. I guess the most common number and the lowest I guess would be 10%. So in that case is it something that is related to the amount of my sales, and again I've heard on multiple occasions the Total Revenue which I can't possibly calculate as we built different projects and quite often provide just labor to big builders and GCs.
I'd like to stay competitive but I'd also want to be in charge and have a thorough numerical understanding of where I am going, so I understand these will sound like silly questions to most of you, but I am ok to look like a dummy now instead of 10 years later)
So, to recap 1. I am calculating materials+sales tax+??Mark up??
add 2. How many hours it will take my crew to do the job ( salary + 40%) I don't mark up the labor, but should I? Isn't it in the profit already, what's up with the labor mark up talk?
Add my billable hours working on the job site?
add 3. Overhead( insurances, licensing,gas, ?my Salary calculated salaryx40x300?)
add 4. Profit I guess whatever the market is willing to pay but no less than 10%
I do a lot of labor only jobs, and the jobs vary from decks to custom house framing so, Total Revenue is really, I'd say impossible to plan.
What am I doing wrong?