Mark-Up with Construction
Minimum Bottom Line Profit Should Average 9.4%!
For Trades & Subcontractors, at Least 11%
After Income Taxes Are Paid!
No other aspect of construction impacts the bottom line as much as mark-up. There is more misinformation and misunderstanding about this basic mathematical formula causing grief even for the most sophisticated contractor. This article will clarify mark-up with construction and help the contractor better understand how to apply the formula.
To grasp this concept, the reader must first understand some history associated with mark-up. Next, a modern approach is adopted which requires an understanding of hard and soft costs. Once the two types of construction costs are incorporated, the contractor will learn how to read and interpret a basic profit and loss statement. With this knowledge they then can calculate the mark-up needed to achieve financial success. It all begins with a little historical perspective.
History of Mark-Up in the Construction Industry
For years, the core formula for mark-up in the construction industry was a simple 10 and 10. This meant that the contractor would