Markup & Profit: A Contractor's Guide -
Revisited
By: Michael C. Stone
At last, a book on
how to figure the right markup for a construction company!
Few construction companies fail because of
poor building practice; they fail because of poor pricing practice.
To succeed in a construction business, you
have to price your jobs to cover all labor, material and overhead
expenses, pay yourself a decent salary, and make a profit that will
keep your company thriving. And a large part of that is knowing how
to figure the correct markup for your business.
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
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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.
Contents:
So You Want to be a
Successful Contractor
Success is not Easy
Reasons for Failure
The Path to Success
Five Basics for Survival
Building a Financial
Foundation
The Basic Formulas
Defining the Terms
Determining Your Financial Requirements
Estimating Job Costs
Setting Your Profit
Figuring Overhead Expenses
Projecting Volume
The Right Markup for
Your Business
What Type of
Business?
Calculating Markup for a Remodeling Company
Calculating Markup for New Construction
Combining New Construction and remodeling
Commercial Work
Specialty Contracting
Sliding Scale Markup
Adjusting Your Markup
Margins vs. Markup
Pricing Your
Services
Cost Plus Contracts
Time & Material Pricing
Job Supervision
Avoid Financial
Pitfalls
The Relationship
Between Overhead and Volume
Make Adjustments When Increasing Overhead
Know Your Cash Flow Needs
Keep a Reserve Account
Never Use Someone Else's' Numbers
Be Profitable, Not Competitive
Build the Work
Profitably
Subs or Employees?
Ratio of Employees to Dollar Volume
Hiring Employees
Hiring Subcontractors
Training Your Employees
Paying Your Employees
Good Contracts
Protect Your Assets
The Importance of a
Detailed Contract
Writing Your Contract Documents
Contract Language That Will Keep You Out of Trouble
Doing Business With Government Agencies
Good Contracts Have Well-Defined Pay Schedules
Special Contract Types
Contract Software
Deal With Changes
Properly
Using Change Work
Order Forms
No Change Work Order, No Change!
Pricing Change Work Orders
Subcontractors & Change Work Orders
Get Leads, Get Jobs
Advertising
Know Your Job Cycle
The Basics of Attracting Leads
Surviving Without Advertising
Profitable Sales
When to Say No
Better Business
Practices
Communication
Honesty
Make Clients a Priority
Building Quality Jobs
Classes, Seminars and Conventions
Recognizing Problems
in Your Business
An Unhappy Client
Making it Through the Tough Times
Are You Making Money?
Preventing Business Failure
The Warning Signs
Working With
Professionals
Bookkeepers
Accountants
Your Attorney
Lender and/or Mortgage Broker
Architects
Marketing and/or Advertising Professionals
Coach or Business Consultant
Professional Relationships Bring Referrals
Insurance Companies
Increasing Your Expertise in Your Field
Tools for Your
Business
Time Management
Cell Phones
Computers
Computer Software
Digital Cameras & Video Recorders
Management Tools
Rent or Purchase
Tools & Equipment?
Do it Yourself or Hire it Done?
Formulas You Should Know
Forms for Your Business
Starting a New
Business
Operate Within the
Law
Consider Your Spouse & Your Family
Buying a Construction-Related Business
Franchises
Enter a Partnership With Eyes Wide Open
Write a Business Plan
Build Your List of Specialty Contractors
Joining an Association
Fall in Love With Your Business, Not Your Jobs
Appendix A: Ten
Cardinal Rules...
Appendix B:
Problems for Readers...
Appendix C:
Construction Resources...
Index...
336 Pages,
8-1/2 x 11
Copyright 2012
Related:
Cost Guides
Estimating Guides
Business / Legal Related
Construction Related
HVAC/R Related
Electrical Related
Plumbing Related
9781572182714
1572180714
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