0
Just realized my old way of bidding on city jobs was costing me money
A few months back, I was talking to a project manager from a bigger firm at a supply house. He looked over a bid I was working on for a small office build-out and said, 'You're still using the 15% overhead and profit blanket on everything, huh? That's leaving cash on the table for the complex stuff.' I argued that it was simple and fair, but he pushed back, saying some tasks, like the custom millwork or the new fire alarm tie-in, have way more risk and should carry a higher margin. I finally tried it on a job in Tempe last month, breaking out the high-skill items. I bumped those to 20% and kept the basic framing and drywall at 10%. The bid was more detailed, and we still got the job, but the profit was about $4,200 better. It felt wrong to charge different rates on one project, but the numbers don't lie. Has anyone else moved away from a flat markup and seen better results?
2 comments
Log in to join the discussion
Log In2 Comments
holly_sanchez7519h ago
Man, you are so right. I was stuck in that same flat rate mindset for years. We did a restaurant job where the hood vent setup and gas line work was a nightmare, but we were marking it up the same as hanging ceiling tiles. Started breaking out the risky, skilled work like you did, and it changed everything. Our last kitchen remodel had the plumbing and electrical at 18% and the basic demo at 8. The bid looked sharper and we made an extra three grand without even raising the total price much.
5
the_jenny14h agoTop Commenter
But doesn't that just make the client question the markup on the easier stuff?
3