# How much profit do you guys look for on 300 sq



## chrisp87 (Sep 14, 2012)

i have a 300 sq job 
1 layer tear off wood shake 
install new 1/2 osb
install 30 year comp
2 stories high

everybodys overhead and labor costs are differnt with that said how much profit would you guys am for? me personally if i cant clear between 25 or 30 k it doenst seem worth it ?? there guys around here who would take $15,000 profit it doesnt seem worth it to me when you crunch the numbers and time involved


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## Grumpy (Oct 29, 2008)

As your accountant, not us. I know how much it costs me to run my business per day. You can figure your overhead and profit as a percentage of revenue only if you have a very reasonable idea of how long the job will take you.

I will not throw out any magic numbers. I won't say 20% or 33% or 60%, all of it is meaningless. If the job takes 10 days to complete, and your business costs you $1,000 per day to operate, you need $10k gross profit just o break even. That's actually just overhead and has nothing to do with profit. 

So if I were doing your job, I would figure not less than 25% markup on top of COGS, but that's meaningless to you, at the end of the job I would end up with about $27,000 gross profit. This would be split between company (overhead), shareholder (me) and salesman. A job like this wold take 15-20 days depending on crew size (5 man crew) and hours worked per day. So if we figure the salesman gets $10k, and the job takes 15 days to complete I am right on target for my $1k per day for overhead and profit.

Here in lies a conundrum though. If you double your crew size should you reduce your profit by half? If it takes half as many days.... Chances are that's what your competitors are doing. I wouldn't entertain this idea though unless I knew I had work lined up for awhile after this job were complete. No sense rushing one job adding extra men just to sit at home when it's done.


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## chrisp87 (Sep 14, 2012)

We're on the same page. How much overhead you running per month I am at about min 6500 per month


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## Grumpy (Oct 29, 2008)

I figure my overhead including my salary is $1k per day or $20k per month. That is actually not my true actual overhead at this moment it is much less actually. However that's what it used to be and is where I would like to be at again in the very near future so I still use it.


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## dDubya (Dec 21, 2012)

$1k per day overhead? I assume that includes WC for your men? 

I shoot for $1k profit above all expenses on a 5 man crew per day. I like it to be more when I actually work w/ them(which is most of the time), but it doesn't always happen. It used to happen more, but for some reason I'm still getting the same prices I did in '08.

Take 300 squares, divide by ten, and then figure it up. See if you'd be happy with the same percentage on a 30sq job.


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## John's Roofing (Nov 16, 2011)

Grumpy..........You shouldn't have any problem finding a salesman...If they make 30 % on each job.... Seems high to me....Interested in what your roofers make?


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## Grumpy (Oct 29, 2008)

dDubya said:


> $1k per day overhead? I assume that includes WC for your men?
> 
> I shoot for $1k profit above all expenses on a 5 man crew per day. I like it to be more when I actually work w/ them(which is most of the time), but it doesn't always happen. It used to happen more, but for some reason I'm still getting the same prices I did in '08.
> 
> Take 300 squares, divide by ten, and then figure it up. See if you'd be happy with the same percentage on a 30sq job.



Nope. That's $1k after all COGS (Costs Of Goods Sold). WC is billed to the job since it is not incurred unless the guys are working, therefore is COGS. There are two types of over head. Fixed, office, phones, advertising, vehicles, etc... Then there is job related overhead, and WC & taxes are job related. 


$20k a month is actually pretty cheap for a "real" company, not a guy working out of his garage with subs or maybe 1 crew. Salesman needs $1k per month advertising per salesman. $1k per month or MORE for office, internet, gas, electric. Part time Assistant/secretary $1k a month (plus burdens). Part time book keeper $750 per month incl burdens. General Manager salary (that's me) $1.5k a month before bonuses. Trucks, $150 a day per NRCA suggestion. Cell phones $500 a month. 

What about computers, office supplies, Christmas bonuses, vehicular maintenance, office maintenance, employee perks (lunches), ink/toner, lost/stolen/missing tools and equipment? What about Production Manager and/or Gopher? 

Remember to budget 12 months of overhead in a 10 month work year. So all overhead needs to be marked up ~200 working days*1.75. This is so you can pay your overhead bills in the winter time the same as the summer and not fall behind. There is 365 days in a year but only 200 working days on average.


If you are charging 5 year old prices, perhaps you should ask for more, because I can tell you I am getting ALOT more than I was 5 years ago. I would be out of business charging 5 year old prices. Everything has gone up except my overhead in the last 5 years. My insurance went up a wee bit, wages went up a little bit, materials went up ALOT. It would be collusion to tell you what you should be charging, so that's not what I am doing. I'm just saying you should take another look at your pricing structure and your earnings if you are charging the same as you did 5 years ago. As my costs go up, so do my prices period. Have you tried asking for more? What happens? It goes back to salesmanship. I can tell you on the average single family house I am $2kish or more than the low bidder. Sometimes 25% or higher than the low guy.

What I have noticed since 2007 is everyones prices pre 2007 were roughly the same plus or minus 10%. Now if someone gets 5 bids you will sometimes see a 30% difference from high to low bidder for similar work.


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## Grumpy (Oct 29, 2008)

John's Roofing said:


> Grumpy..........You shouldn't have any problem finding a salesman...If they make 30 % on each job.... Seems high to me....Interested in what your roofers make?


Just hired a new salesguy, paying 40% of gross profit with a 500 a week draw (not salary) and company truck and gas allowance. He started last week. Obviously prices will need to go up to cover his increase in pay. 

Finding a sales guy isn't hard. Finding a sales guy I trust with my customers and my reputation is down right difficult. 

Not to pull topic off thread we can talk more about this in another thread.


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## Grumpy (Oct 29, 2008)

The key to making more is asking for more and knowing you are worth it.

My brother's boss just quit. Typical sub, good at his trade but shouldn't be running a business. He went and got a job after 12 or so years running his sub business because he wasn't making as much as he used to.

The root of the problem, he wasn't asking enough. When units of sale go down to achieve the same level of profit one must increase their profit percentage. They went from doing 2 jobs a day to 1 job a day but kept their profit percentage the same, enough though in essence it doubled since in reality their jobs were cut in half. So same over head but half as much gross profit to support it. That's a recipe for failure no matter how you look at it. 

If you do a great job you deserve more than the average. Since the average (going rate) is the going out of business rate, damned near everyone deserves more than the average.


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## nmarshall603 (Mar 25, 2012)

Grumpy, Its also hard to find someone who isnt broke and wanting a draw or this or that everytime its slow getting the insurance check or customers to pay. 

We've come to the conclusion that great sales reps will come to companies that have a solid reputation of customer service and high quality. When we get hailstorms this year the owner, a friend who sold for me but got out of the business because of bad business practices at a few denver fooing companies and I will be handling sales. In the meantime we have a huge housing authority contract and will be focused on that as well as bidding on commercial and government jobs. 





Grumpy said:


> Just hired a new salesguy, paying 40% of gross profit with a 500 a week draw (not salary) and company truck and gas allowance. He started last week. Obviously prices will need to go up to cover his increase in pay.
> 
> Finding a sales guy isn't hard. Finding a sales guy I trust with my customers and my reputation is down right difficult.
> 
> Not to pull topic off thread we can talk more about this in another thread.


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## Grumpy (Oct 29, 2008)

I don't do alot of insurance work, as little as possible, and seldom have a hard time to get customers to pay. I know what you are saying though, I have told sales guys in the past "If you spent as much effort asking customers for sales as you do asking me for draws/advances, you wouldn't need an advance."

New sales guys is doing pretty well. He's sold 5 jobs so far, so he is above my level of expectation. I do have some complaints that his way of doing things is way too "sales" for me. I'm accepting his differences for now until it starts to have a negative affect on my company reputation. Then I will put a stop to it. For now I am trying to keep him on a short leash. 

I really don't like the stereotypical sales guy.


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## nmarshall603 (Mar 25, 2012)

Im just using guys I know and trust right now and only for storm sales. So much of our business is from bidding on govt contracts and people coming to us because we've built a good reputation for quality. 

We're building slowly for the long haul. Keep overhead contained to essentials and plan for year round expenditures. Have to account for expenses from October through March in Colorado. We get more sunny days than people think. Last year we lost the entire month of February. This year we lost about 2 weeks this month. But have to be prepared for what comes next year.

Most companies fail because they fail to plan for the future and fail to see when they are getting behind or could have a catastrophic event or a major contract fall through.

You can also control costs by outsourcing.


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