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%.
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.
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?
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.
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.