Markup and Profit

Markup and Profit

A typical formula for a contractors markup to apply to all your construction jobs, according to the book Markup & Profit: A Contactor's Guide is: Markup = Total Volume Sold divided by job costs. This is supposedly a time-tested formula that's been proven again and again.

To establish an effective markup, you need to combine your job costs, your overhead and your profit into one final figure called "Sales Price" or "Volume Sold".

Use that figure to come up with a markup that's right for your business. Then use the markup number you arrive at. The trick is to use the number that you arrive at on all jobs -- if you want to make a profit and stay in business.

To find out more, check out the book. It tells how to understand markup, write contracts, how to establish markup, sliding scale markup, problems to watch out for in markup and much more.

You can find it here. http://craftsman-book.com/products/index.php?main_page=cbc_product_book_info&cPath=4&products_id=117

Free Construction Legal Forms

FREE Construction Legal Forms

Free Construction legal forms and contracts for contractors exist out there on the Web. You just have to know where to find them.

If you're looking for free construction forms that include the following:
Contract to Build a House
Lein Waiver
Notice of Commencement to Start Work
Addendum to Contract
Notice of Intent to Stop Work
then check out the little-known part of the craftsman website: http://craftsman-book.com/downloads/download.php?download_id=5

These construction legal forms and contracts were written by a lawyer and author: Quenda Behler Story, who has written many legal articles for Journal of Light Construction Online: http://www.jlconline.com/cgi-bin/jlconline.storefront . She also wrote a book filled with legal advice for contractors titled Contractor's Plain-English Legal Guide http://craftsman-book.com/products/index.php?main_page=cbc_product_book_info&cPath=15&products_id=72 The book also contains a CD-ROM filled with legal forms and contracts that you can load on your conputer and use at will to protect yourself and your business.

Construction Estimating

Construction Estimating

Good construction estimating is being thorough. Always check over your plans for things ommited by carelessness, or mistakes the designer may have included. Begin estimating in your mind-- step-by-step, as though your crews were about to do the work. It's good practice to write everything down as you follow through the sequence from the ground up. Imagine each construction task and the time it would take your crew to complete it. Make notes of any complications or areas likely to bog you down.

If you are remodeling or doing insurance repair work, construction is likely to start with removing or demolition. Are you going to be able to salvage any materials? Are you providing hauling or a dumpster?

If you are replacing you'll need to figure the amounts of material from the estimate. Calculate the lineal and square foot measurements. Many online pricing services can give you replacement material prices at no charge. Check out http://www.get-a-quote.net . Here you'll find prices for just about all materials you'll need on most construction or remodeling jobs. Of course, you can always call your local building material dealer and get a quote over the phone. But if you are like most of us, your construction estimating may be getting done after your building material dealer has gone home for the day.

Another site I've found with construction estimating software at a great price is http://www.craftsmansitelicense.com . It does cost about $55. But offers the best buy on construction software I've seen. The program is a little clunky, but the construction database is top notch and abundant. Just about any job your likely to tackle has been estimated there. I've even heard that they have plans for creating a back up disk with everything the download offers for only $10 -- to people who have already downloaded the program.

Estimating Construction Starts With the Plans

Estimating Construction Starts With the Plans

Estimating construction from the plans should be done in a systematic method. Like a logical sequence. This method helps you eliminate missing some detail that will later end up costing you money.

Most people start estimating from the basement or foundation. Are the dimensions on the plan measured from the inside of one wall to the inside of the opposite wall? How thick will the concrete footings be? Check the dimensions now to make sure that there's no error in the plans before you start calculating. Check the figures on the plan sheets. Many times you'll find errors that the architect or plan designer made. This is the time to find any errors -- not when your concrete truck arrives with a hot batch. Look carefully at the foundation plan. Examine the placement of supporting columns and piers. Are they to Code? Will more columns be required? Will more rebar or wider footings be required? Everyone makes mistakes and if you're able to find a mistake at this stage it can save you a lot of money.

Once you are satisfied with the basement or foundation plans, move on to the first floor. Are all the windows and doors shown on the plan listed in the schedule? Usually a reference number will relate them to the separate schedule. Are the switches and outlets placed to code and in places that seem to make sense? Is the plumbing in the right place?

After you've looked over the floor plans move to the elevations. These are designed to give you the big picture of the project. You may find section details that will give you detailed information of how the designer wants something built. You'll have to figure your time and materials for all of these.

Finding mistakes in the plans before you begin can save you thousands of dollars, and eliminates time-wasting squabbles between subs, city officials, and owners.

For a really good book on this subject take a look at Estimating & Bidding for Builders and Remodelers.http://craftsman-book.com/products/index.php?main_page=cbc_product_book_info&cPath=11&products_id=194

Estimating Demolition

Estimating Demolition Cost is Difficult

If you've ever had to estimate demolition you soon relize how many varibles can shape your construction estimate. Even a careful walk before estimating thru cannot locate all the hidden time-consuming chores that make estimating demolition a harder chore than it already is.

Some questions to consider in taking on a demolition job:
Will there be problems in sequring a permit for the job?
Is there a noise ordinance that will limit your work hours?
Can the trash box be located near the job?
Can a trencher or backhoe get access to the site?
Will you need to move around gas or water lines?
Will you have to remove trees or plants?
Will you have to remove or re-install a fence or gate?
Does a septic tank or drainfield extend into the demolition area?
Will you be required to recycle materials.

A great reference on estimating demolition is the National Home Improvement Estimator. It has demolition estimates for many areas of construction. The 500-page book also includes FREE software to help your estimating. You can find more information at:
http://craftsman-book.com/products/index.php?main_page=cbc_product_book_info&cPath=22&products_id=174

Estimating Demolition

If you’ve been in construction awhile you know how difficult it is to estimate demolition. There are so many unseen variables and so many things that can, and often do, go wrong. I recently found a website that list demolition prices for home repair. I found the figures a little on the high side, but pretty much within the ballpark. What’s amazing is that they’re absolutely FREE. Try them out and see if you agree.

The address is: http://get-a-quote.net/QuoteEngine/costbook.asp?WCI=CostIntroFrameSet

Site License for Construction Estimating

Site License for Construction Estimating

An unbelievable bargain for anyone seeking a site license for construction estimating software can be found online at the Craftsman Website. They allow you to download over 100,000 construction estimates for only $54.99. Quite a bargain! Once they're in your computer you can use the Craftsman software to change the descriptions add quantities, and output to Excel or to QuickBooks Pro.

But these figures from the Site License are not perfect. There are other considerations in construction estimating -- such as:

Jobsite temperature: Add 10% to 15% to your estimate when working temperatures are below 40 degrees or above 95 degrees.

Working on high places: add 15% to 25% to your estimate when working on a ladder, or scaffolding.

Deduct 10% from your estimate when work is in a large area with good light.

Add 1% of your estimate for each 10 feet of lumber when it has to be lifted above ground level.

Add 5% to 50% to your estimate for tradesman with below average skills.

Deduct 10% to 20% when the same task is repeated over and over and your crew is developing speed thru learning on-the-job shortcuts.

To find out more about the Craftsman Site License go to:
http://craftsman-book.com/products/info/sl5.htm

Or you can head to their home page at: http://www.craftsman-book.com

Craftsman Site License

Craftsman Book Company has made it possible to download all eight of their 2005 construction cost estimating programs as you need them at one crazy low price of $54.99.

If you estimate the price of your jobs you'll be pleased to know that these downloads include the easy-to-use estimating software National Estimator, as well as the complete databases of all their costbooks including: National Construction Estimator, National Home Improvement Estimator, National Repair & Remodeling Estimator, National Renovation and Insurance Repair Estimator, National Electrical Estimator, National Painting Cost Estimator, National Plumbing and HVAC Estimator, and CD Estimator Heavy.

I can't figure out why they want to cannabilize sales of their best-selling CD Estimator product with a download product that costs less and offers more? It doesn't make sense to me, but it must make sense to the people at Craftsman. To find out more about the Site License go to:
http://www.craftsmansitelicense.com/
or
http://craftsman-book.com/products/info/sl5.htm