By: Michael C. Stone
At last, a book on
how to figure the right markup for a construction company!
Construction contracting businesses have the
highest rate of failure of any type of business in America today.
Why? Because too many contractors undercharge for their work. They
don't calculate their true costs of doing business, they don't
consider their investment of capital, and they don't allow for
"surprises." In other words, they don't work out how much they need
to have left over after covering all their costs to make sure they
stay in business.
In this guide, Michael Stone, a
highly-successful contractor, lecturer and consultant, explains the
importance of setting your own markup - and not just picking a
markup figure that someone else uses, or a number you found in an
estimating book!
Every business is unique, with different labor
costs, different overhead costs, different profit requirements - so
their markup should be different, too. Mr. Stone gives you the
background and calculations you need to correctly figure markup
based on your individual business.
He writes in simple layman's language and
includes examples, formulas and sample problems to help you. When
you've read this book, you'll thoroughly understand what markup is
and how to arrive at it. And just as important, you'll know how and
why you should apply it to your job costs to arrive at the right
sales price for your work. And that's the secret to success in this
industry.
Mr. Stone reviews the basics of what it takes
to survive in the construction business. You'll learn how to :
- Calculate your full overhead
- Price your work at the proper markup
- Forecast increases in your overhead
- Set and keep a budget
- Figure all your job costs
- Sell yourself and your work
- Estimate your break-even point
- Recognize an unprofitable job
- Compute a fair wage for yourself
- Write a good contract
This book gives you the key to operating a
profitable, contracting business - figuring and using the correct
markup on every job. It gives the simple mathematical principles and
formulas that you can use, regardless of the type of work you do.
Learn from the book yourself, and then use it
to train your sales staff, in marketing techniques and calculating
markup on their sales. Use the sample problems in the back of the
book to test your own understanding, and to check your employees'
grasp of how to figure markup.
To help you keep your company organized, the
book includes sample worksheets and sales contracts, lead sheets,
subcontract forms, notification forms, job schedules, checklists,
and other blank forms. Add your company's name, address, or logo,
then photocopy them as you need them. Or, use the
FREE CD-ROM included inside the
back cover. Open the forms you need in Word, WordPerfect or Word for
Macintosh, change them to suit your needs, fill them out, then
print.
Contents:
1. Looking at Markup in the Construction
Business, 5
So You Want to Be a Successful
Contractor, 6
And If You're Already a Contractor? 11
And the Formula Is, 18
2. Understanding Markup, 19
Symptoms of Impending Failure,
19
Three Major Causes of Business Failure, 23
The Terminology of the Industry, 26
Determining Your Financial Requirements, 27
3. Establishing the Correct Markup for
Your Company, 53
The Basic Formula for Markup, 53
Let’s Do Some Sample Problems, 54
Sliding Scale Markup, 67
A Review of Volume, Overhead and Markup, 69
Problems to Watch Out For, 81
Job Supervision and Markup, 85
4. Sell Your Services – at a Profit, 89
The Basics of Attracting Sales,
89
Your Telephone Is Ringing, Now What? 96
The Basic Steps of the Sale, 100
Some Final Notes About Sales, 115
5. Writing Contracts, 121
The Importance of a Detailed
Contract, 122
Writing Your Contract Documents, 126
Good Contracts Have Well-Defined Pay Schedules, 137
6. Change Work Orders, Other
Forms and Your Markup, 149
Using Change Order Forms, 149
Other Forms, 160
7. The Mathematics of Your
Business, 169
Setting and Keeping a Budget,
169
Margins vs. Markup, 178
Break Even, 180
Math, Formulas and Ratios for Your Company, 183
Computers, 189
8. Bean Counters and Your
Business, 197
Dealing with the Bean-Counter
Mentality, 197
Financing with Two Bankers and One Broker, 199
Working for Bankers, 202
Insurance Companies, Their Pay Schedule and Your Markup, 203
9. Justify Your Markup, 207
Communication, 207
Classes, Seminars and Conventions, 211
10. Employees and Your Markup, 213
Training, 213
Productivity, 214
Schooling on Markup, 217
11. Listening to the Experts, 219
Recognizing the Export, 219
Increasing Your Expertise in Your Field, 221
Hiring Consultants, 223
Some Good Advice, 224
In Conclusion, May I Say Thank You, 228
12. Problems to Solve, 229
Problem 1: Getting Started, 230
Problem 2: A Fourth-Year Business, 232
Problem 3: Correcting a Disaster, 236
Problem 4: All That Glitters Is Not Gold!!! 242
Problem 5: Evaluating a Quarterly Review, 247
Problem 6 Boom & Bang Construction, 251
Congratulations! 263
Appendix
Bank Forms, 265
Educational and Construction Resources, 305
Index, 312
320 Pages,
8-1/2 x 11
Related:
Cost Guides
Estimating
Business / Legal Related
Construction Related
HVAC/R Related
Electrical Related
Plumbing Related
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