Tag: Indirect Costs
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Residential Roofing Contractors – Financial Performance Standards
The national average sales for residential roofing contractors are slightly greater than $3 Million per year. A typical small roofing contractor will have a couple of crews working various projects and frequently sub out jobs. In addition, the owner acts as a project manager and there are one to two estimators depending on the volume…
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Estimating in Construction – Part IV (Concepts, Tenets, and Principles)
With estimating in construction, well developed, accurate and timely estimates are the best tool ensuring profitability in the construction industry.
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Construction Management Fee – What is a Good Rate to Charge?
Charging a construction management fee is one of several different construction production styles. The most common is the traditional build and sell style. Here the contractor puts up the capital to build the house and sells the house while under construction. A common term used with this style is ‘Spec’ house. Another style involves shifting…
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Roofer – Business Dynamics
Business dynamics for roofers depend heavily on labor to accomplish their task. They are also highly susceptible to weather conditions and dangerous variables.
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Markup Percentage for Remodelers
In the construction industry, remodelers face a different set of criteria than your traditional new home builder. Because of these issues the markup percentage on costs is generally much higher than other forms of construction.
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Construction Accounting Terminology
In construction accounting, accountants and bookkeepers use certain terms and there are distinct meanings associated with these terms. This article is designed to introduce beginner accountants and contractors to these terms from the perspective of financial reporting.
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Margins in Construction
I’ve been asked to identify the average margins in the construction industry. Honestly, there is no such thing. I tried and after several hours of research I couldn’t even get one of the types of contractors to have consistency in their numbers.
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How to Calculate the Best 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…
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What is a Reasonable Profit in Construction?
For any company, profit is based on the risk reward concept. With construction, what should be the profit (reward) given the risk? What is a reasonable expectation given the industry and the particular business? There is no single correct answer. The construction industry is divided into several significant branches. This article is focused on the residential contractor. From…
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Best Format for the Construction Profit and Loss Statement
As a construction company owner, you need a profit and loss statement that conveys information in a format that will identify how much you are truly making as a profit. The best format is a construction profit and loss statement identifying contract revenues, direct costs, indirect costs and the overhead expenses. This format most closely matches the…