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#157326 - 10/10/05 09:21 PM Markup and Profit  
BobbyHo  Offline
Member
Joined: Jul 2005
Posts: 33
CT
I am wondering if anyone has read "Markup and Profit" by Mike Stone. If so,has anyone applied the formula and does it work? I just attended a conference and he was a speaker.


Business, Office, Estimating, Legal:

#157327 - 10/16/05 06:16 PM Re: Markup and Profit  
Active 1  Offline
Member
Joined: Feb 2003
Posts: 687
Grayslake IL, USA
I remember I liked his book and the general ideas made sence. Tring to understand the formulas was hard for me so I can't say about them.


#157328 - 10/17/05 03:53 PM Re: Markup and Profit  
Steve McKinney  Offline
Member
Joined: Apr 2004
Posts: 79
Marion, Illinois
I thoroughly enjoyed his book. It made alot of sense to me.

You can tell he has "boot-strapped" his way up.

Highly recommend it.

Just curious, was it his seminar?

What did it cost to hear him?

thnx,

Steve


#157329 - 10/18/05 09:12 AM Re: Markup and Profit  
LearJet9  Offline
Member
Joined: Apr 2005
Posts: 197
Millis, MA USA
I accidently posted this under "pricing increases."
What is the average (if there is one) mark-up? We are limited by some contracts to cost plus 25%. Otherwise we use keystone mark-up. Our local union shops use contractor net +50%.


#157330 - 10/18/05 09:35 PM Re: Markup and Profit  
BobbyHo  Offline
Member
Joined: Jul 2005
Posts: 33
CT
No,it wasn't his seminar,It was an IEC conference and he was one of the speakers. I went to his seminar years ago but never applied his formula.The basis of what he says is that there are no free estimates, you give a "firm price quotation". What we should be shooting for is a basic net profit of 8% on all jobs. Typically you would take all the associated job costs for the job and multiply it by your "markup" (which is built on your companies numbers) but typically for electricians it is 1.4. So if a job was $1000.00 including material and labor you would multiply it by 1.4 and that is your selling price $1400.00. This is only part of what he says, and I may have even gotten this wrong but it is definately eye-opening. I would recommend his seminar. It would be great if all contractors could sell jobs this way.


#157331 - 10/21/05 05:09 AM Re: Markup and Profit  
LearJet9  Offline
Member
Joined: Apr 2005
Posts: 197
Millis, MA USA
Sorry, I forgot what a sensitive area this is.

[This message has been edited by LearJet9 (edited 10-21-2005).]


#157332 - 10/21/05 06:36 AM Re: Markup and Profit  
Redsy  Offline
Member
Joined: Mar 2001
Posts: 2,056
Bucks County PA
I just received his book last night.
I'll let you all know what I think when I'm done.


#157333 - 10/24/05 06:45 PM Re: Markup and Profit  
Tiger  Offline
Member
Joined: May 2005
Posts: 706
Crystal Lake, IL USA
I'm reading this book also and have a point of confusion if anyone can help. The formula for markup includes Job Cost. As a one-man shop I'm not sure how to apply my salary in the job cost. Would it be full salary, tech's salary per hour? Would it also include taxes and benefits?

Thanks
Dave


#157334 - 10/26/05 05:59 AM Re: Markup and Profit  
LearJet9  Offline
Member
Joined: Apr 2005
Posts: 197
Millis, MA USA
Dave - Material mark-up is a very sensitive subject on this forum, and elsewhere. Most EC's don't want to reveal their mark-up % for fear of sounding bad. [just a guess] We are up front with our material mark up as previously noted. If you ask, as I did here, you will likely get no response. I belong to another local group of EC's and it's the same there.


#157335 - 10/26/05 05:21 PM Re: Markup and Profit  
Redsy  Offline
Member
Joined: Mar 2001
Posts: 2,056
Bucks County PA
Tiger,

I don't want to get into it too much, but as a 2-man shop, I already think his book & most of the methods don't apply to me.
There are some good ideas, but it seems to me that this book is for larger, GC-type outfits, and I believe the principles may work better for that type of business.



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