Replies

1. 
   Mickus | Mar 16, 2003 03:21am | #1

   Check him out at JLC {Journal of Light Construction}. I think he has a talk forum on it.

2. 
   BobKovacs | Mar 16, 2003 05:15am | #2

   Ace-

   Michael's book does have some solid ideas, and I know he practices what he preaches.  He and I both moderate forums over at the JLC site- he has the Markup & Profit forum, and I have the Estimating and Takeoff forum.

   The one flaw I see in Michael's system (especially for a new, one-man company), is that it bases markup percentages on an anticipated yearly volume.  If you can't accurately predict what your volume will be, which is tough when you have no historical data, you can fall flat on your face at the end of the year if you don't meet that volume goal since a portion of you overhead hasn't been covered. 

   I prefer to spread overhead and profit over labor hours, since they hopefully will remain constistent (I stress "hopefully) if you are working steady.  Regardless of whether you're self-performing all your labor, subbing everything, or mixing the two, if you allocate all of your hours to jobs at the proper rates, you've covered your overhead.  If instead you tie it to volume, and your volume dips (say on a job where the material costs decreased, or the customer supplied material), you're not covered.

   There have been extensive discussions on the forums about this very topic, but I'd be more than happy to re-start them here if you like.

   Bob Kovacs

1. 
   xMikeSmith | Mar 16, 2003 07:56am | #3

   i've been using the PROOF management system to allocate O&P since the '70's.. sonny lykos  uses PROOF also.. .. basically , it does the same thing Bob said.. applying O&P to labor hours....

   if you think you can actually get say 30 hours of field production out of yourself.. then those 1500 hours have to generate all of your salary, all of your overhead, and all of the company's profit..

   if you hire someone.. and you think you can get,  say, 1800 hours of production out  them.. now you have  3300 hours to generate  the money you need ..Mike Smith   Rhode Island : Design / Build / Repair / Restore

1. 
   BobKovacs | Mar 16, 2003 05:33pm | #4

   Mike-

   That's exactly what I was getting at.

   How's business up in RI?  I'm heading up to moderate at the JLC Live show in a few weeks, and was thinking about checking out the area- it's getting a bit crowded down here in NJ.

   Need an estimator? lol

   Bob

1. 
   xMikeSmith | Mar 16, 2003 05:49pm | #5

   bob.... business is good.. but why do i get the feeling we're dancing on the edge of a precipice ?

   what will you be moderating ?.. Deisel pig is going to be at JLC.. probably a lot of others.. i'd like to meet you....Mike Smith   Rhode Island : Design / Build / Repair / Restore

1. 
   BobKovacs | Mar 16, 2003 05:52pm | #6

   I'm doing a business clinic on the convention floor at 2pm on Saturday- just a little informal Q&A session.  Then I'm introducing the speakers for "Diversification for Remodelers" at 3pm.  I'm coming in Friday night, so I should be floating around the EXPO floor all day Saturday.  Look me up- I'll be the tall, good lookin' guy...lol.

   Bob

2. 
   Piffin | Mar 16, 2003 06:01pm | #7

   "Diversification for Remodelers"??????????

   Design/build?

   Rentals?

   Interior design?

   Home inspections?

   Consulting?

   Project Management contracts?

   or do you mean stuff like taking trips to the caribbean to check out the local talent for possible emmigration to solve the labor crisis? LOL.

   Excellence is its own reward!

3. 
   BobKovacs | Mar 16, 2003 06:10pm | #8

   Piffin-

   I believe it's on Insurance Repair and Handyman services- I'm just doing the intros- not the speaking.

   Personally, I'd rather look at diversification of stock portfolios and overseas account management...lol.

   Bob

2. 
   JeffBuck | Mar 27, 2003 09:17pm | #9

   hey Mike...I'm too lazy look this stuff up myself......any idea where I can get more info on the PROOF system?

   and is this a system U follow...like from a book somewhere...

   or is this a system ya buy into?

   If so..what's the costs invloved?

   Thanks,

   JeffBuck Construction   Pittsburgh,PA

    Fine Carpentery.....While U Waite                  

1. 
   JerraldHayes | Mar 27, 2003 10:17pm | #10

   Jeff, unfortunately there is no formally published "book" on PROOF. What happens

   is you take a one day seminar that they offer and they give you a loose leaf

   notebook manual on their system. At least that's what they did way back in

   1987 when I went. It was a seminar sponsored by New England Builder which is

   now called JLC. It was without a doubt the best $165 (1987 dollars) I ever

   spent on training (so

   far)

   I'd let you borrow my book only it never leaves my possession and I'm using

   it as a training guide with my people now too.

   You might try calling, visiting the web site, or emailing them at:

   View Image

   The program way back when I took it was called "How To Survive

   & Prosper in the Contracting Market" but there are also other good programs

   in their portfolio too (http://www.proofman.com/corporatebook.pdf).

   View Image

   "If you do what you always did, you're gonna get what you always got." --Yogi Berra

1. 
   JeffBuck | Mar 28, 2003 01:09am | #11

   I'll look them up.

   Sounds like that book should stay with ya...and the book without the training would probably only get ya halfway there.

   Thanks for the link.

   JeffBuck Construction   Pittsburgh,PA

    Fine Carpentery.....While U Waite                  

2. 
   JerraldHayes | Mar 28, 2003 01:45am | #12

   Well I dunno their manual is pretty good in and of itself however I think taking the seminar is about getting up to speed on it faster. I just heard a story once of a contractor who loaned his book out and never got it back.

   I've always been amazed how we as contractors will buy computer programs and then spend years learning Excel little bit by little bit whereas taking a one or two day class in how to use Microsoft Office would have us up and running as power users using all the products, Word Excel Outlook and Powerpoint, in integrated fashion in no time.

   A think a lot of people will be turned off on the PROOF system saying "I ain't gonna take no course in it".

   View Image

   "If you do what you always did, you're gonna get what you always got." --Yogi Berra

3. 
   xMikeSmith | Mar 28, 2003 04:31am | #14

   jerrald.. i think i took the course in the '70's.. and the guy was the original.. costains ?.. what ever.. you remember , he was a painting contractor.. sure made a lot of sense.. i don't use the manuals because i committed his system to everything i do... if i just maintain the discipline ...Mike Smith   Rhode Island : Design / Build / Repair / Restore

4. 
   JerraldHayes | Mar 28, 2003 04:58am | #15

   Yup Irv Chasen, and he was a painting contractor originally. I guess he's now retired and a another fellow Monroe Porter (who is listed as contributing editor in my notebook) I think now runs the business. While the Irv Chasen-How To Survive & Prosper in the Contracting Market seminar I attended was the most poignant and important I also went to several more that Monroe Porter taught most notably "How To Get the Job At Your Price".

   However I never got any tapes,... bummer.

   I don't really need the book for myself but I'm working with my guys and some of the other trade contractors I work with now talking about this as a better, smarter, more accurate, and safer form of markup methodology.

   View Image

   "If you do what you always did, you're gonna get what you always got." --Yogi Berra

2. 
   xMikeSmith | Mar 28, 2003 04:25am | #13

   jeff, i got all the tapes and the 3-ring binder  ... you're welcome to them..want me to drop them in the mail ?

   only if you promise to listen to 'em... keep you home at nights.... hah !Mike Smith   Rhode Island : Design / Build / Repair / Restore