When we talk about making money, it’s rarely about big chunks of change. Few contractors ever land a multi-million dollar project, and many who do know they can lose money on those jobs, too. Making money in construction is done one dime at a time.

One overlooked item that costs money is rounding numbers. For instance, your markup.

We’ll assume that you’ve calculated a markup for your business of 1.4927. Too many will look at that figure and round it down to 1.49. That is close enough, right?

Let’s see what it does to your bottom line. It won’t have a drastic effect on a small job. If you estimate job costs of \$11,623, a 1.49 markup will give you a sales price of \$17,318.27. You’ll probably round that down to \$17,318.

But if you rounded your markup up to 1.50, as you should, your sales price on this job would be \$17,434.50. That is \$116.23 more. Not worth worrying about, right? Maybe, maybe not. But let’s see what it does over the course of a year for an average remodeling contractor. The typical contractor might have annual job costs of \$450,000.

Doing the math, using a 1.49 markup: \$450,000 x 1.49 = \$670,500 sales price for the years work.

Doing the math, using a 1.50 markup: \$450,000 x 1.50 = \$675,000 sales price for the years work.

It looks to me like the contractor who rounded his markup down to 1.49 left \$4,500 on the table.