How much to mark-up on subs for a proposal
How much should I mark-up on top of a sub’s cost on a proposal.
Let’s say your plumbing sub cost is $20,000. I’m only “managing” the sub, not doing any of the hands-on work, just scheduling, meeting with the client, etc.
My business is headed more and more in this direction, where I don’t actual do the physical labor anymore, and I am totally unsure how to make money doing this.
Thx
Replies
The first step in figuring this markup is to decide what you want and how you are going to run your business.
Are you turning into a general contractor? Are you supplying the subcontractors in addition to scheduling, monitoring, and assuming responsibility for their work?
How bout materials? Contractors insurance and perhaps workmanship comp? Licensing, advertising, office supplies, and tool/vehicle repair and relplacement?
You should set your goals and rewards, put a figure to it and divide by the number of hours you plan to work at this.
dont forget the other costs of doing business above.
How you allocate this to the job is your business.......
Too many times an individual was getting 16.00 an hour and seems tickled pink when he's gonna charge out at 25.00.
Way too many times do they find out it's costing them 45.00 for the pleasure.
If you can search here on the board and they didn't shitcan the threads, there was a whole lot of discussion about this thing called bizness. Mike Smith and Gerald ( last name escapes me ).
Is the sub working for you?
Typically I would not mark up the sub at all as a line item cost. If there is some contingency for unforeseen circumstances I would add that in. I would also add in my time for managing the sub at my normal billing rate. Then the bottom line on the cost breakdown would be for overhead and profit. I use 12.5% to 15% of the job total including subcontract costs and my time and all other costs on the job.
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