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Discussion Starter · #41 ·
Michael stone uses numbers like 8% and 10% of sales for remodeling contractor compensation. I fall within his guide lines (I'm at 13% right now). But man this just seems too low.

Exactly what you guys are saying... To much burden for 60k salary. Actually should be about 43k salary and 19k to net profit for company.

I guess it goes back to me having to be in the field In order for me to really make the money that I want to make but then that would leave no time for my family (bidding after hours etc).

Remodeling contractors!! What is the scoop?
 

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Discussion Starter · #42 ·
lawndart said:
Just a couple of quick observations based off the information you provided: 1. Seventy percent COGS is too high, and will limit your potential for growth unless, you reduce it by 10-20%. 2. Thirty percent GPM is a bit low. Successful businesses usually have 40% GPM's and above. Charging more money for your services will help COGS and GPM improve. 3. Are you figuring your weekly salary into overhead? 4. Based on the above numbers and information you provided, I'm going to assume the 13% net is your salary. 5. How are you putting money away (nest egg) into the company for growth, and hidden expenses? This is what a true net is. Looks like your net is 0%, am I correct?
Yes you are correct.
 

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Would like some feedback for my company. I have been in business for 3 years. Last year we did 426k and this year we ended up at 482k in sales. I currently have a guy that helps with me bids (@17$ per hour) and also watches 2 jobsites while I do bigger bids and watch that job site. We also have an office manager (@13$per hour works 25 hours per week). I have 6-7 guys working for me. This last Quarter we have averaged 53k per month in sells (since I brought on the office manager and brought my main guy up to do bids.

Here are my numbers as a summary. Cost of goods Sold is at 69.7%, expenses at 16.9%, and net profit at 13.4%. This leaves my gpm at about 30.3% for the year. This last quarter our focus has been gpm and we averaged 39% gpm.

I have never had to go looking for work really. This year I am looking to really turn up the heat on our volume. Especially since I have and office manager and this guy helping me with bids and production. I am looking to project 700k in sales

do you all see any problems with these numbers? just trying to see what everyone else is doing. I realize pricing numbers are frowned upon but this is a different question. I know my overhead and I know what my mark up should be. Just would like any feedback in regards to my company. Its time to start making some dang money!!

Other Info
1. for jobs under 2000$ i try to hit 60-70% gpm
2. for jobs $2000-30,000 i try to hit 44% gpm
3. for jobs 30k and above its 32-40%
Your sales are WAY to low to have 6-7 employees let alone a guy running bids to you. Between labor and what your materials costs are Id be surprised if you actually made any money at all..

Id fired everybody, put my bid guy back in the field managing projects, and start working because with those small numbers you should be wearing a belt 3 days a week.

Youre doing under 10k a week. Your payroll must be 5k, then materials, and overhead is leaving you with not much.

It sounds to me like you must be getting tons of very small jobs. Those are the ones when managed properly can make you the money.

Happy New Years pink slips are in order for errebody...
 

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ohiohomedoctor said:
Your sales are WAY to low to have 6-7 employees let alone a guy running bids to you. Between labor and what your materials costs are Id be surprised if you actually made any money at all.. Id fired everybody, put my bid guy back in the field managing projects, and start working because with those small numbers you should be wearing a belt 3 days a week. Youre doing under 10k a week. Your payroll must be 5k, then materials, and overhead is leaving you with not much. It sounds to me like you must be getting tons of very small jobs. Those are the ones when managed properly can make you the money. Happy New Years pink slips are in order for errebody...
Agreed.
 

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Sophisticated Siding Guy.
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Your sales are WAY to low to have 6-7 employees let alone a guy running bids to you. Between labor and what your materials costs are Id be surprised if you actually made any money at all..

Id fired everybody, put my bid guy back in the field managing projects, and start working because with those small numbers you should be wearing a belt 3 days a week.

You're doing under 10k a week. Your payroll must be 5k, then materials, and overhead is leaving you with not much.

It sounds to me like you must be getting tons of very small jobs. Those are the ones when managed properly can make you the money.

Happy New Years pink slips are in order for errebody...
I agree.

I can't see why 1 person could not manage 1mil/annually by themselves.

I think that sales volume is a good area to start looking at hiring a office manager which would still leaving you managing jobs and estimating. The office manager would handle payroll, purchase orders, etc and get that off your plate.

The 1mil/anual is also imo the most difficult to manage. You don't quite have enough sales to afford a full office staff but you got more than 1 person can handle. Choppy water for sure. Get up to 1.5mil and things start to pay for themselves.
 

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I agree.

I can't see why 1 person could not manage 1mil/annually by themselves.

I think that sales volume is a good area to start looking at hiring a office manager which would still leaving you managing jobs and estimating. The office manager would handle payroll, purchase orders, etc and get that off your plate.

The 1mil/anual is also imo the most difficult to manage. You don't quite have enough sales to afford a full office staff but you got more than 1 person can handle. Choppy water for sure. Get up to 1.5mil and things start to pay for themselves.
I misread the OP and thought he was doing 600k. We had 4 carpenters and one guy doing estimates and shop work at 600k.

How in God's name can you do a million dollars of any kind of work alone? Must be real fast...... unless your a paper contractor.

Also, some guys have more than one trade in house. When we were around half a million to 750k we had 4 painter/drywall guys (one of which was also a tile guy), me and three other carpenters. We made money, more than if I had subbed everything.
 

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if your a business owner with employees and your only making a working mans salary something is wrong...why have all the risk and have to stress out over employees only to make $60,000....id rather work for someone else

you need to get your salary/profit to $100,000....that's what a small business man should make(or more)

I still think you have too many employees for the $ of sales.......maybe double what you need
 

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Sophisticated Siding Guy.
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I misread the OP and thought he was doing 600k. We had 4 carpenters and one guy doing estimates and shop work at 600k.

How in God's name can you do a million dollars of any kind of work alone? Must be real fast...... unless your a paper contractor.

Also, some guys have more than one trade in house. When we were around half a million to 750k we had 4 painter/drywall guys (one of which was also a tile guy), me and three other carpenters. We made money, more than if I had subbed everything.
I didn't mean alone. I meant having employee's that are not working in the field such as office managers, estimator, sales reps. Etc. Sorry for the confusion I didn't define "manage".
 

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I didn't mean alone. I meant having employee's that are not working in the field such as office managers, estimator, sales reps. Etc. Sorry for the confusion I didn't define "manage".
I agree. It was one guy 75% office/ 25% field at those numbers. I was running the crew with my bags on:thumbsup:
 

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if your a business owner with employees and your only making a working mans salary something is wrong...why have all the risk and have to stress out over employees only to make $60,000....id rather work for someone else

you need to get your salary/profit to $100,000....that's what a small business man should make(or more)

I still think you have too many employees for the $ of sales.......maybe double what you need
It's not all about money.

I would rather work for myself and make half the money i made this year. Screw having a boss.
 

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It's not all about money.
That's true until you mismanaged yours until there is none left. Then it becomes all about the money real quick..

Screw having a boss.
Agreed. Id be a terrible employee at this point. For instance I haven't gone in since the Friday before Christmas..
 

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That's true until you mismanaged yours until there is none left. Then it becomes all about the money real quick..



Agreed. Id be a terrible employee at this point. For instance I haven't gone in since the Friday before Christmas..
doubt that will happen to me. I watch the bottom line. Stuff gets tight, tighten the belt and scale way back while networking in my free time to get back up. It will happen again and again to me I'm sure. Part of what it is all about.
 

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doubt that will happen to me. I watch the bottom line. Stuff gets tight, tightenthe belt and scale way back while nnetworking in my free time to get back up. It will happen again and again to me I'm sure. Part of what it is all about.
Without doubt. I am the same way. I have a set number in the business account when we get bellow that the full audits kick in and I start going balls to the walls to improve processes and collect receivables.

Every year I raise that number to a new bar increasing the level of increase from the year prior. The first few months of every year are stressful for me attempting to get to the new bar.

This is my own self imposed fail safe to keep myself from complacency which is the kiss of death in my opinion...
 

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Sure the op might have a low take home right now. I also think he os very close to having a self sustaining business. Like others have said Get it over a million and the money will start rolling in. Then the key will be adjusting to any downturn in the construction cycle. Say at the end of tje obama administration.
 

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Without doubt. I am the same way. I have a set number in the business account when we get bellow that the full audits kick in and I start going balls to the walls to improve processes and collect receivables.

Every year I raise that number to a new bar increasing the level of increase from the year prior. The first few months of every year are stressful for me attempting to get to the new bar.

This is my own self imposed fail safe to keep myself from complacency which is the kiss of death in my opinion...
My favorite time of the year is December, business wise. We buy tools, vehicles equipment, take bonuses and credit operating capital (if funds available of course)

January is my second favorite and my least favorite all at once. :laughing: You start from zero (other than operating capital) and have the I have to sell ------ amount of work. We tighten up spending in all areas, I network harder, hunt for leads. Almost feel like your backed into a corner, and I like it :thumbsup: At least as long as there is some funds in the bank :laughing:

Every sale feels like a TD in January and February.

Unfortunately last January and February sucked for me. Already booked into March loosely, need some smaller projects to fill it all the way up to make any real money though.

Happy New Years, boys. Hope it's a banner year :thumbup:
 

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Discussion Starter · #57 · (Edited)
Metro M & L said:
Sure the op might have a low take home right now. I also think he os very close to having a self sustaining business. Like others have said Get it over a million and the money will start rolling in. Then the key will be adjusting to any downturn in the construction cycle. Say at the end of tje obama administration.
That's exactly what I feel. This is the year for tracking numbers. I just hired the office manager and I just moved one of my main guys to the office. I also just hired 2 more hands this last qtr. I haven't been like this all year I am just getting everything ready and in place. I actually paid out 14k to these people this last qtr so I guess that could have been my money but this year it's on! Happy new year to all!
 

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lshomesolutions said:
That's exactly what I feel. This is the year for tracking numbers. I just hired the office manager and I just moved one of my main guys to the office. I also just hired 2 more hands this last qtr. I haven't been like this all year I am just getting everything ready and in place. I actually paid out 14k to these people this last qtr so I guess that could have been my money but this year it's on! Happy new year to all!
I can't figure out how you can pay wages to that many people when your gross sales are 400k. What does everyone make a year? 15k?
 

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Probably staffs up and down. Might have 6 currently.

It's not like the 10 grand comes in steady every month....
 
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