I had a local contractor tell me 10%. I don't think that's a very good return on your investment in todays world , I try to figure 30%
As much as possible! For me it depends on the job. I have put anywhere from 10% to 35% on jobs. It just depends on the complexity of the job, the amount of the project that I will be financing till I get paid and whether or not I need a place for my guys to go. Of course you also have those jobs you bid really high hoping you don't get them.
after all bills/taxes/suppliers/employees are paid, i'm paid..i'm very happy w/ 10%
What I aim to do is very little....and get paid squillions I try and keep my cost of production below 60% on large walls and much less for earthworks so that overall (overheads) I'm about 22% PROFIT. If I don't get there on average then its just not worth it. 10% is hardly cutting it but is OK for large jobs or big turnover. A lot of my jobs are tween 10 and 20K so I really have to keep an eye on things.
Last I heard nationwide average (USA) profit was 1%. Of course many companys do better than that.
OK lets brake it down to hourly work. Say you have a dozer or excavator working by the hour @ $160.00 per hour, 10% would be $16 profit, your hired help is probably making $20-$25, are you satisfied with the $16 ?
It needs to be kept relavent to company size, turnover etc.....For example. A 20K job for me will generally take about 1 1/2 to 2 weeks.....10% profit for two weeks work is gunna break me real fast. Thats why I need to get my production cost below 60%. I have raised my prices, reduced labour and stuck to smaller tasks in order increase my profit margin....it seems to be working.
like i said earlier...when EVERYTHING is paid, including operating costs, on equipment, and including myself....i'm content w/10%
I would say that $160.00 per hour doesn't include an operator?
I'll take $160 an hour for a komatsu pc-09. Where and when...
I used to try to figure it as if I was going to put the money in the bank. But since the interest is next to nothing now I try for 8 to 10%.
Profit depends on how you figure it. On one hand I made no profit last year. Paid expenses and paid on equipment and salary. On the other hand 18% of the gross went into equity on equipment. About 1/4 of that is lost by the value of equipment going down. If profit is defined as asset appreciation, then about 14% of gross last year went to that. But my gross isn't all that high. If I were doing big jobs 10% would look good I'd say.
33% wage, 33% overhead, 33% profit. I haven't figured out what to do with the other 1% Most of my equipment is billed out at $150/hr. That is $50 for overhead (anything I can write off with the IRS, including book keeping), $50 for wages which includes there withholdings (SS, unemployment insurance), And $50 for profit. (which is all mine for anything I want). By the way when I do the work I also get the wage. Otherwise why would anyone want to invest over 1 million in a business and take a chance on loosing it.
Profit and loss are defined about 9 million ways by accountants. As a small business man you have to define your parameters. I am managing a job now that has an 11% net margin; however the job is over a period of 2 years and a dollar value of over 7m. That is good for that job. If on the other hand I am doing a 10,000.00 job that takes 2 weeks that is terrible. I typically bid jobs of over 2m:crazy, in those cases I revert back a long ways and use the out of date method, which is comprised of 2 columns, a red column (what you spend on the project) and a black column (what your revenue is on the project) and then give it to the CFO and let him worry about margins. However in a smaller bid (say under 100k) I like to see at least 75% on top of labor cost (what I call a 1.75 multiplier), 25% on top of equipment cost and 25% on top of the of cost and supplies and materials. You have to remember that every thing you use in relation to the project you have to pay for at one time or another, I don’t care if it is fuel for your wife’s car to go to Kinko’s or a #2 pencil, you have to buy to keep project notes in order to track cost, what ever is necessary for that project. So many contractors feel the need to cut it to the bone to get work, cash flow, ect., ect, none of that is important if you have one slipup and can’t pay the bills. You may have a couple of lean years, but if you do a quality job and maintain a good client attitude/relationship the word will get a round and you will be busy and you will be able to pay the bills (wife’s Macy’s bill ) have a good life (with what little time you have left over from running the business, roughly 15 minutes a day, but what the hell you’re a contractor right?:notworthy) People will pay for a quality contractor that can get the job done and save them from the heartache of “the bottom line contractor:Banghead” Figure your project cost (and I mean every thing it takes to do the project including your wages from start to finish) let your accountant (and yes as a small business you need one) figure depreciation, taxes and all the other BS that he needs to make sure you will not make a profit, but have the new jet boat, kids college paid for, new pickup, ect., ect., ect., ect.:drinkup. Like it or not we all have to pay the game:duh Add that into your bid and go to work, cause at that point its all up to you! There ain’t no better feeling than when you complete a good job and have money in the bank!!