We realize that many of our website visitors aren't contractors, they are the clients of a contractor. They are generally either looking for help with their Cost Plus project that's gone wrong, or they're trying to figure out if the price they were quoted (or charged) is reasonable. They frequently confuse Markup with Profit, and we want to set the record straight.

• Construction Price Guide

Markup isn't profit. Markup is a general term that applies to the overhead and profit that any business needs to realize if the business wants to stay in business. It is the amount a business charges above their direct cost. If your contractor has a 1.50 markup (which is reasonable for a remodeling contractor), that means that if the estimated cost for a job is $10,000, they'll multiply the $10,000 x 1.50 and arrive at a $15,000 sales price. Now many people who know little about business and even less about the costs of running a business will say, 'Oh, look at that crook. He is making $5,000 profit on my job.' Nope, not true.

Construction Price Guide

Use the following information to get a good idea of the costs associated with this comprehensive list of small to large renovation and construction projects. If you have any other prices you think should be added or changed, please email us with any updates and or changes. Most use a mix of unit-pricing, stick estimating, and human judgement for intangibles. To generate a materials list, contractors do a takeoff from the plans – either. For complex jobs or anything out of the ordinary, the general contractor. This Remodeling Costs Guide, updated for 2018, will help you research accurate pricing for the most common home renovation and construction projects. Our comprehensive list includes the cost of over 40 popular Interior Remodeling, Exterior Construction, Electrical, Mechanical (HVAC / Plumbing) projects, grouped by type.

Your contractor gets $5,000 to pay their overhead expenses (which includes salary) and make a reasonable profit. I just heard those same people say, 'But wait, contractors don't have any overhead!' They have overhead. Advertising, sales commission, job supervision (which isn't usually a job cost), office expenses (even if they work out of their home), insurance, accounting and legal fees, licenses, taxes, employee expenses, and their own salary are just a few of their overhead expenses. The typical remodeling contractor will have overhead expenses ranging from 25% to 54% of their revenue – that means every $15,000 job could have overhead expenses of $3,750 to $8,100. Somewhere along the line, people started believing that a 10% overhead and 10% profit is the industry standard for construction jobs. Or that a 20% markup is all a contractor needs.

Armed with that knowledge, owners try to get their contractor to reduce the price of the job they want done. If you think it through, it's not a smart move. Would you ask your surgeon to reduce his price before doing open heart surgery? Would you ask your auto repair shop to reduce their price before rebuilding the engine on your car?

Do you really want them to go cheap? For most homeowners, your home is your largest single investment.

Why do you want to use a cut rate contractor to improve or repair your major investment? Every business must make a profit or it will go away. It must price the work or services to include the cost of its goods or services as well as cover its overhead expenses and make a reasonable profit. It needs a reasonable profit to build and maintain the business, keeping it viable during the down times. Profit is what insures a business's longevity – if it doesn't make a profit, it might not be in business in six months. 2006 volvo xc70 manual.

If it can't cover overhead expenses and make a reasonable profit, it might not even be in business long enough to finish your project. The National Association of Home Builders published a report a few years ago that stated that their 'best' remodeling contractors averaged something under 4% net profit.

I can tell you that in my experience, too many contractors make no profit at all. That's why so many construction-related businesses fail. So, if you're focused on finding the cheapest contractor to do your job, you have a very good chance of selecting a contractor who will go out of business while trying to build your job. There's an old saying, 'A fool and their money are soon parted.' Any owner who selects a contractor based on their price has no one but themselves to blame when things go sideways.

Markup isn't profit, it is the money needed to make sure the contractor can complete your job, pay his bills and if he's doing things right, make a profit on the job as well. Just like your doctor, your mechanic, your grocer and every other business. I just wanted to say thanks for all you do. I've read both your books and taken a seminar and one online class. I also look forward to your newsletters – there's always something for me to learn.

I'm not a native to the construction industry. I didn't grow up in the trades, so starting a handyman & light remodeling business has been a long journey for me.

I'm still putting one foot in front of the other, but the things I've learned from you have helped me avoid many pitfalls. Thank you so much! Hey there - ordering the Estimating Training to complement the Fast Track Estimating software I purchased last week. I worked through it a little and am impressed at the ease of use - so much so that I decided that the best way to get up to speed quickly and take full advantage of the system would be to leverage your expertise through the training. Thank you for honoring the discount even though I am ordering the packages a few days apart. I'm excited to get my first estimate completed through using your system and expertise.

If you're interested in our two-day class, don't wait for it to come to you. Our speaker, Michael Stone, author of Markup & Profit; A Contractor's Guide Revisited and Profitable Sales, A Contractor's Guide, isn't as young as he used to be.

He's younger than fifteen U.S. Senators but we'll wager he's done more physical work in his lifetime than all fifteen put together. It's taken a toll on him. We plan six months at a time. We've scheduled five two-day classes for the fall of 2018 and will start looking at the spring of 2019 in November. We might continue these classes around the country for years or this fall might be the last round; we don't know. One option we're considering is to hold future classes only in Portland, Oregon.

So if you want to attend, make the effort. You might have to wait for an airport shuttle and sleep in a strange bed, but your business will thank you.