Construction Industry Standards

The construction industry has standards of performance and cost ratios. These standards and ratios are evaluated to determine if your business is performing well or below what is considered reasonable.   Use construction industry standards to improve your contracting company.

Using Cash in Construction

Debt or Equity

There is a notion in business that using cash to pay for materials or service is illegal.  IT IS NOT ILLEGAL TO PAY FOR MATERIALS OR SERVICE WITH CASH.  It is illegal to do this if you do not properly document the transaction.  This is especially true in the construction industry.

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Branching Out in Construction

Branching Out in Construction

To reduce risk and provide greater security to all parties the small construction company should consider branching out.  What I mean is adding an additional class or line of construction work to the company’s portfolio so that in hard times there are more opportunities for work.

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Contractor’s Profitability

Contractor's Profitability

It costs a lot more than you realize to build a home or perform residential repairs. This article looks at both the homeowner's and contractor's perspective of what one perceives and the other actually incurs.

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Construction Draw Schedule – Ranch Model Home

Contractor's Draw Schedule

This is a basic draw schedule explanation for an A-frame ranch model home.  This article details the draw schedule format illustrated below.  It details the approximate percentages for the respective phases of construction and explains how the draw schedule is laid out and works.

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How to Calculate the Best Markup for a Construction Project

Markup for a Construction Project

Every construction project has costs beyond the direct costs and the contractor wants to earn a profit.  To cover these costs he must have an appropriate markup.  The contractor must give consideration to many variables and circumstances to calculate the best markup for a construction project.  To determine the best markup percentage on costs, the contractor should consider his indirect costs, overhead, taxes, and final profit desired. 

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How to Use Class Accounting in Construction

Markup Calculator

Class accounting is a form of accounting whereby the revenues and direct costs are grouped into divisions within the company.  It is a very effective form of accounting in construction.  Learning how to use class accounting in construction is easy and works extremely well with phase accounting.

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