Quick answer: Normal overhead for most contractors runs about 10% to 20% of annual revenue and normal net profit runs about 5% to 10% of the selling price. Together, that usually means a markup of roughly 15% to 40% on direct cost, depending on your trade, risk and competition. The “10 and 10” rule (10% overhead plus 10% profit) is […]
To price a construction job for profit, add up your direct costs (labor, materials, subcontractors and equipment), add a contingency for unknowns, recover your overhead and then apply your target profit margin by dividing total cost by one minus that margin. Do not just multiply cost by a markup. A 25% markup gives you only a 20% margin and that […]
Why Contractors Lose Bids: Contractors lose bids mainly because of inaccurate takeoffs, prices that are too high or too low, missed addenda, incomplete bid packages, missed deadlines, bonding or licensing gaps and proposals that fail to show value. Most of these problems are preventable with a repeatable estimating and bid review process. Losing a bid hurts because you spent hours […]
Quick answer: To write a construction bid, review the drawings and specifications, complete a quantity takeoff, price labor, materials, equipment and subcontractors, add overhead, contingency and profit, attach any required bid bond, then present the scope, price, schedule and exclusions in a clear document before the deadline. The best bids are accurate, easy to compare and honest about what is […]
