Should I Change My Markup If I’m Not Making Sales?

By Michael Stone – (Oct 13, 2021)

Should you change your markup method if you aren’t making sales? Don’t spend hours fiddling with numbers; invest the time in your sales skills.

Finding and Hiring Construction Employees

By Devon Stone – (Sep 16, 2021)

This one-hour presentation by Contractor Staffing Source explains how to find and hire employees for your construction business.

Make Time by Delegating

By Michael Stone – (Aug 18, 2021)

It’s easy to fool yourself into believing it’s better to do it yourself, until you realize the things you’re supposed to do aren’t getting done.

Character Matters

By Michael Stone – (Aug 4, 2021)

You can’t always determine if the person you are about to do business with is ethical, but you do know your own behavior. Choosing to operate your business with integrity is within your control.

Make Construction Work for You

By Michael Stone – (Jul 21, 2021)

Construction can be a tough business, dealing with clients who don’t realize what we’re worth, while our bodies take a beating to make their homes better.

Beliefs That Limit Your Profit

By Michael Stone – (Jul 7, 2021)

Owning and operating a construction business requires a strong will and self-direction, but those qualities can also lead you to hold on to beliefs that limit your profit.

Definition of Terms

By Michael Stone – (Jun 23, 2021)

What does a general contractor do? What is a specialty contractor? How do remodeling and new construction differ?

How Do You Measure Success in Construction?

By Michael Stone – (Jun 9, 2021)

Our goal is to help contractors build more profitable businesses, but how do you measure success? How do you know your pricing will result in a profit?

Purchasing Commercial Insurance

By Michael Stone – (May 26, 2021)

Purchasing commercial insurance can be a frustrating experience for many construction businesses.

Handling Customer Complaints

By Michael Stone – (Apr 28, 2021)

No matter how careful you are, you, your crew, or one of your subcontractors will upset a client. How you handle customer complaints says a lot about your business and your character.

Construction Cash Flow and Business Success

By Michael Stone – (Mar 17, 2021)

Construction cash flow is like every other business; there must be more cash flowing in than flowing out or the business won’t survive.

The Cost of Callbacks

By Michael Stone – (Feb 3, 2021)

Having to return to a previous job and fix something that’s wrong costs money. Knowing the cost of a callback helps you or your crew to be more diligent to avoid them in the future.

Habits for Success

By Michael Stone – (Jan 6, 2021)

Are your habits helping your company grow, or are they holding you back?

Financial Plan for Success and Survival

By Michael Stone – (Dec 16, 2020)

If you thought you were the captain of your ship, 2020 taught otherwise.

Charging a Fair Price

By Michael Stone – (Oct 28, 2020)

You can be the most ethical person in the world and if you aren’t charging enough for your work, you stand a good chance of cheating someone else.

Specialty Contractors and Down Payments

By Michael Stone – (Sep 30, 2020)

Should specialty contractors require down payments even when working through a General Contractor?

The Skinny on Change Work Orders

By Michael Stone – (Sep 2, 2020)

A compendium on change work orders on a new home, remodeling or renovation project; why they matter, how to price them, what to include, and more.

Building a Successful Construction Business

By Michael Stone – (Aug 19, 2020)

I take many calls from contractors whose business is more like a low-paying job than a successful construction business. Some ask, “Is it even possible in today’s economic climate? Can my business make money?”

Family Matters More Than Business

By Michael Stone – (Aug 5, 2020)

Our goal is to help construction-related business owners build a better business. We receive many phone calls and notes from our clients, and most of the time we hear good things. Sometimes we hear another side of the story.

Clients and Your Job Schedule

By Michael Stone – (Jul 8, 2020)

One of the concerns a homeowner has when they’ve hired a contractor is whether they’ll do what they said they’ll do. It is a legitimate concern. They don’t know what’s going on in your head, only what’s happening with their job.

Who Pays for On-the-Job Training?

By Michael Stone – (Jun 24, 2020)

Training in construction is important, especially with a shortage of employees. A general contractor asked about a subcontractor who is training an apprentice.

Cost Plus Contracts

By Michael Stone – (Jun 5, 2020)

Why cost plus and time & material contracts should be avoided, for both contractors and building owners.

Shady Contractors

By Michael Stone – (May 27, 2020)

If you’re doing residential construction, you’ve met all kinds of people. There are also all kinds of contractors, and some of them don’t operate ethically.

When Business Returns

By Michael Stone – (Apr 15, 2020)

At some point this health crisis will slow down and go away. When it does, there’s a good chance we’ll be doing some things differently. But some things won’t change.

When Business Dries Up

By Michael Stone – (Apr 1, 2020)

If sales have dropped off significantly or you’re under a stay-at-home order, here are 3 things that you need to do now for both your business and your family.

Hang On – Getting Through These Times

By Devon Stone – (Mar 17, 2020)

Michael Stone offers suggestions on how to keep your construction business strong during this Coronavirus emergency.

It’s Not For Us

By Michael Stone – (Mar 4, 2020)

Michael Stone shares about a note from a contractor who initially found the Markup & Profit Revisited book “too extreme” and “not for us” – but now realizes it makes sense.

Unclear Change Work Orders

By Michael Stone – (Feb 19, 2020)

Pricing changes for a change work order isn’t easy when the scope of work isn’t clear.

Investing in Your Business

By Michael Stone – (Jan 22, 2020)

Constant input from others is necessary if you want to stay on top of both your business and your personal life.

Business or Charity?

By Michael Stone – (Jan 8, 2020)

If you’re a business owner and take on a project out of the goodness of your heart, recognize you might not get paid and will be funding the project.

Borrowing Jacks

By Michael Stone – (Dec 18, 2019)

I recently had to face what I thought would be an uncomfortable personal conversation. I fussed all morning, then went to visit the person involved.

Payment Methods

By Michael Stone – (Dec 11, 2019)

I don’t think writing a check is old fashioned, but there are so many advantages to using a credit or debit card that it’s become the preferred payment method for many.

What the Future Holds

By Michael Stone – (Dec 4, 2019)

If you were a mouse in my pocket, you’d hear the complaints I hear about both general and specialty contractors who don’t answer the phone or return phone calls.

Protect Your Time

By Michael Stone – (Nov 20, 2019)

Some people are used to snapping their fingers and having others jump. It’s irritating, but you have to remember that they’re writing the checks.

Let’s Discuss an Acceptable Hourly Rate . . .

By Michael Stone – (Oct 30, 2019)

This note is a painfully perfect example of why you shouldn’t provide details on your pricing.

About Your Exorbitant Markup . . .

By Michael Stone – (Oct 23, 2019)

From a contractor: “I am definitely going to do a better job in pre-selecting my clients after this one.”

What You Do in Practice

By Michael Stone – (Oct 16, 2019)

We want to see contractors build stronger businesses and in the process improve the reputation of our industry.

Year-End Planning, Part 1

By Michael Stone – (Oct 15, 2019)

Business planning isn’t exciting. But the effort you put into it has much to do with the results you’ll see next year and in years to come.

Year-End Planning, Part 2

By Michael Stone – (Oct 15, 2019)

This is part two of our year-end planning paper. We’re going to pick this up by continuing an indepth look at your overhead budget for the coming year.

Insurance Quotes – Getting Paid

By Michael Stone – (Sep 18, 2019)

Insurance work can be good business, but it can also waste your time if the insurance company is playing the three bids game.

A Yardstick for Success

By Michael Stone – (Aug 28, 2019)

It’s the last Wednesday of the summer, which is a great time to look back and see how your business fared.

What Happens To Your Business If You Can’t Be There?

By Michael Stone – (Aug 21, 2019)

If you own a business, your illness or death will create business problems for your families and your employees.

Why Do You Need To Make A Profit?

By Michael Stone – (Aug 14, 2019)

Don’t confuse profit with salary or hourly wages. Making a profit isn’t optional: Your business needs profit to survive.

Overhead Differences: New Homes and Remodeling

By Michael Stone – (Jul 24, 2019)

A construction company building both new homes and remodeling needs to calculate a separate markup for each type of work.

Honest Relationships

By Michael Stone – (Jul 17, 2019)

There are always at least two sides to any scenario, but if you want to stay in business, consider this a lesson on how not to treat a subcontractor.

Taxes and Profit and Markup

By Michael Stone – (Jun 26, 2019)

Michael addresses a few different questions we’ve heard recently, primarily dealing with taxes and profit and calculating your markup.

When Success Looks Impossible

By Michael Stone – (Jun 19, 2019)

After reading our books and trying to do things right, why is he still not making any money?

Spare Topics

By Michael Stone – (Jun 5, 2019)

It’s time to catch up on some spare topics I have lying around. These aren’t earth shaking but they can and will impact your bottom line.

Contract Language That Puts You at Risk

By Michael Stone – (May 21, 2019)

Over the years, I’ve seen contract language evolve, shifting more and more responsibility to general and specialty contractors.

Subs: Take Care of Business

By Michael Stone – (May 15, 2019)

A contractor friend called to complain about problems he’s having with specialty contractors in his area. This isn’t a one-time complaint; I’ve heard the same from others around the country.

Transparency and Partnerships

By Michael Stone – (May 8, 2019)

What do you do when your partner is listening to someone who knows nothing about construction, but still thinks they knows what’s best?

Know Your Numbers: Current Ratio

By Michael Stone – (May 2, 2019)

There is a measure you can use to determine how financially solid your company is at any given point in time. It’s called the current ratio, and it’s a good idea to check it regularly.

Estimating, Labor Burden, and Cost of Goods Sold

By Devon Stone – (Apr 17, 2019)

When you own a small business you wear a lot of hats. Understanding the numbers might not be your favorite hat, but numbers are important because they show where you stand financially.

How to Calculate Markup

By Michael Stone – (Apr 3, 2019)

When I teach a class or webinar, sometimes I wonder if my listeners understand what I’m trying to say. After reading some of the questions that came in during a recent webinar, I realized I missed the mark.

Pricing Mistakes

By Michael Stone – (Mar 20, 2019)

Everyone, and I do mean everyone, who has ever compiled an estimate has made a math error that put knots in their stomach once it was realized.

Liability Insurance Tangle

By Michael Stone – (Feb 20, 2019)

Some time back we received a well-written letter about liability insurance from a contractor in Washington state.

Protect Your Business – Change Work Orders

By Michael Stone – (Feb 6, 2019)

Michael discusses a ploy some building owners use to not pay for all of their change work orders. It happens in both residential and commercial projects.

Overhead and Profit on Change Orders

By Michael Stone – (Jan 9, 2019)

You shouldn’t sign a contract that stipulates what you can charge, even if it’s just on the change orders.

The Economy and Your Business

By Michael Stone – (Jan 2, 2019)

As business owners, we need to keep an eye on what’s going on with the economy because it should influence our business decisions.

Watch Improvement Happen

By Michael Stone – (Dec 19, 2018)

As we wrap up 2018, we want to share two notes we received this year.

Writing a Business Plan for a Construction Business

By Michael Stone – (Nov 28, 2018)

A business plan is different than year-end planning. A business plan looks at the big picture. It’s a roadmap for the whole journey.

Make Things Happen

By Michael Stone – (Nov 14, 2018)

Without looking, how do you think your business did this year? Are you feeling more profitable or less? Is your business running more smoothly or are the problems overwhelming?

Training an Architect

By Michael Stone – (Nov 7, 2018)

A contractor we’ve known and worked with for many years sent us a note about his experience working with a new architect. Ideally, the architect would have been working with the contractor from the beginning so he could have educated the client as well.

What Should You Do With Your Profit?

By Michael Stone – (Oct 23, 2018)

The best way to avoid paying taxes is to not make a profit at all, but it’s a rough way to live. 

Avoiding Jobs That Don’t Fit

By Michael Stone – (Sep 19, 2018)

It’s smart to specialize on the work that makes you the most money. It’s even better if you know contractors who can pick up the leads outside your specialty.

Setting and Keeping a Schedule

By Michael Stone – (Sep 5, 2018)

The job is sold, schedule is set, project gets started, and suddenly it’s behind schedule. When it happens, it eats into your profit and upsets your clients.

Doing What’s Right

By Michael Stone – (Aug 1, 2018)

How should you handle a mistake? What if it’s a mistake you made over a decade ago?

Breaking Down Price Detail

By Michael Stone – (Jul 25, 2018)

Since the end goal for both the architect and the contractor is a satisfied client, how about working together from the beginning?

Making The Trades More Attractive

By Michael Stone – (Jul 18, 2018)

If you want to attract the best people, you need to make the a good offer.

Share The Satisfaction of Working in the Trades

By Michael Stone – (Jul 11, 2018)

There’s a reason that working in the trades isn’t appealing. But if you do the work, you know there are positives that outweigh the negatives.

Profit and Loss and Markup

By Michael Stone – (Jun 27, 2018)

When your books are set up properly, it’s easy to calculate your markup, and it’s also easy to compare your actual results to your estimates.

Calculating for Taxes

By Michael Stone – (Jun 20, 2018)

Taxes are the price you pay for being profitable. It’s a good thing when your business is in the black and you need to pay taxes on it. It’s not good when you’re taken by surprise.

Making Money or Keeping Busy?

By Michael Stone – (Jun 13, 2018)

When everyone but your family benefits from your business, it’s time for a reality check.

Lower Your Price, Gain Exposure

By Michael Stone – (Jun 6, 2018)

Should you take every opportunity to increase exposure for your business? 

Getting Ahead

By Michael Stone – (May 23, 2018)

As we head into Memorial Day weekend, we want to share an upbeat note we received in April from a client.

Working With a Designer

By Michael Stone – (May 9, 2018)

Is there a common ground or way that the designer and contractor can do business together, each make the money they need to, and not overcharge the customer?

Construction Business Safeguards: Fraud and Embezzlement

By Michael Stone – (Apr 25, 2018)

We hear many stories from business owners who have had to recover from the theft of funds by their own employees. Today we’re sharing a list of things you can do to protect yourself and your business.

Hiring Friends and Family

By Michael Stone – (Apr 18, 2018)

When you own a small business you’re often asked to hire family or friends. Sometimes it works out great, but not always.

Pricing Handyman and Service Work

By Michael Stone – (Apr 11, 2018)

There are two schools of thought on pricing handyman projects and service work: T&M or flat rate pricing. They both have advantages and disadvantages.

Does This Apply to My Business?

By Michael Stone – (Apr 4, 2018)

We received a note from a contractor asking if what we talk about applies to his business.

Single Discipline Leads, Referral Fees

By Michael Stone – (Mar 21, 2018)

The note stated, “Because I’m the middle man, my subcontractor loses out a potential project.” That’s true, and it’s one reason you shouldn’t get into the position of being a middle man.

Do Your Work

By Michael Stone – (Mar 7, 2018)

For the past few years I’ve had general contractors tell me that they can’t get specialty contractors to return their calls, show up on time or show up at all for a job. Now I’m hearing from generals who are getting calls from subs, looking for work.

Justifying Your Price

By Michael Stone – (Jan 24, 2018)

If your lawyer believes you have to justify your pricing just because someone doesn’t want to pay their bill, it’s time to find another lawyer.

Transparency – Or Maybe Not

By Michael Stone – (Nov 29, 2017)

Is transparency the way to go when selling? Be careful who you listen to.

Planning for Profit

By Michael Stone – (Nov 15, 2017)

We recommend setting goals every year, beginning the process about now. If making a profit is one of your goals, Michael outlines practices that will help.  

Loaning Your License

By Michael Stone – (Oct 4, 2017)

It’s interesting how friends, relatives, and other contractors try to rope you into their schemes by asking to borrow your license to build their jobs.

Subcontractor Payment Schedules

By Michael Stone – (Sep 27, 2017)

Payment schedules need to be in writing, that includes between a general and specialty contractor.

Collecting Payment from a Dishonest Homeowner – Updated

By Michael Stone – (Sep 20, 2017)

Not all of your clients are honest. There are even a few who have no intention of paying you for the work you do.

Markup or Margin: Be Logical

By Michael Stone – (Sep 6, 2017)

If they tell you the formula to use will make you more profit, that’s baloney. It’s the numbers you use that determines your profit.

Profit Leaks

By Michael Stone – (Aug 23, 2017)

These aren’t earthshaking topics, but they are the things that cause problems on jobs, leading to disgruntled clients, lost referrals, and lower profit margins.

Should You Purchase a Construction-Related Franchise?

By Michael Stone – (Jun 28, 2017)

If you’re considering purchasing a franchise, or if you’ve been contacted by a franchisor because of your success, put your emotions on hold and evaluate it carefully.

Making a Positive First Impression

By Michael Stone – (Jun 21, 2017)

Building trust always starts when you are first contacted by a potential client. Michael discusses how to do it right, and how to do it wrong.

A Minimum Price

By Michael Stone – (May 10, 2017)

Being profitable doesn’t mean getting rich off your clients.

Job Costs and Overhead

By Michael Stone – (May 3, 2017)

I’ve seen contractors try to apportion overhead on a daily, weekly, monthly or per job basis when compiling their estimates. I don’t recommend any of those approaches.

Are You Worth It?

By Michael Stone – (Feb 22, 2017)

Construction is a tough industry. For some, the hardest part is making the sale. They’re out of their comfort zone. They don’t want to talk about money or ask for the sale.

How to Be Profitable

By Michael Stone – (Feb 15, 2017)

It’s important to be focused on profitability. You’re in business because you want to keep a roof over your head and food on your table; you can’t do that when your business is losing money.

Can You Be Both Competitive and Profitable?

By Michael Stone – (Feb 8, 2017)

You can’t lower your price and expect to make up for it by selling more, because there is a limit to how much you can produce. Every job needs to be profitable.

Finding The Path to Success

By Michael Stone – (Feb 1, 2017)

You had ambition and energy. Then reality set in.

Who Generated The Lead?

By Michael Stone – (Jan 18, 2017)

When subcontractors or employees are approached, they are obligated to notify the general contractor who brought them there, and let him handle the lead.

Contractor Issues with Architects & Designers

By Michael Stone – (Dec 7, 2016)

These relationships can be profitable for both parties, but they can also quickly become squabbles if the relationships aren’t valued.

Pricing Without Plans

By Michael Stone – (Nov 9, 2016)

It’s important to remember you aren’t in business to drive around and give out numbers. If you’re a specialty contractor, you also aren’t in business to provide numbers to architects or general contractors.

I Don’t Need Any Leads!

By Michael Stone – (Nov 2, 2016)

“I have more work than I can do. I tell new leads to call me after the first of the year.”

Business Owner, or Hired Labor?

By Michael Stone – (Oct 12, 2016)

Ever heard the old saying that something “pushed your buttons”? It’s an emotional reaction, usually not positive. Well, Devon took a phone call last week that pushed my buttons.

Growing Pains

By Michael Stone – (Sep 14, 2016)

If you’re running your business like a business and not a hobby, you’ll start getting more leads, and it’s exciting to watch your business grow.

Pricing Small Jobs

By Michael Stone – (Aug 24, 2016)

It’s hard to remember what you’re worth, especially if you’re spending time on jobs that cost you money.

An Unbalanced Partnership

By Michael Stone – (Aug 10, 2016)

I’ve written before about middlemen in the construction industry: I’m not fond of them. There is another type of middleman in the construction industry, facility and property management companies.

Construction Allowances: What They Are, How to Use Them

By Michael Stone – (Jul 27, 2016)

A construction allowance is a dollar amount included in the contract for a particular item. There are two types of construction allowances: material and installed.

Working for Big Box Stores

By Michael Stone – (Jul 20, 2016)

A young guy asked if signing on with one of the big box stores was a good idea. He hasn’t discovered yet that getting a lot of work doesn’t mean you’ll make lots of money.

Sales Issues: We Want the Lowest Bid

By Michael Stone – (Jun 22, 2016)

Some clients want the lowest bid for their project, and nothing else matters. It’s your job to try to educate them.

Markup Worries

By Michael Stone – (Jun 8, 2016)

Remember, you’re in business to provide a service and make a profit doing it.

Subs or Employees – Are Subs More Expensive?

By Michael Stone – (Jun 1, 2016)

Does subcontracting raise the price of the project?

Don’t Be This Contractor

By Michael Stone – (May 25, 2016)

 Please don’t be this contractor. Please don’t be that homeowner. 

Your Labor Rate and Your Markup

By Michael Stone – (May 18, 2016)

Using the wrong labor rate, or using someone else’s markup when you don’t know their assumptions, is one of the biggest mistakes we see and the difference can be thousands of dollars.

Adjusting Your Markup

By Michael Stone – (May 11, 2016)

In Markup & Profit Revisited, we explain how to calculate your markup. We’re often asked if you can adjust your markup based on the length of the job.

Hiring A Contractor: Truth vs. Myths

By Michael Stone – (May 4, 2016)

Some advice on hiring a contractor is just plain wrong.

Keep it Simple

By Michael Stone – (Apr 6, 2016)

When it comes to pricing your jobs, you need to keep it simple, especially if you want to make the sale.

Be Prepared

By Michael Stone – (Mar 9, 2016)

When things are good, it’s smart to ask yourself a critical question: Are you prepared for the next downturn?

Lowering Another Contractor’s Overhead

By Michael Stone – (Mar 2, 2016)

Business needs to be win-win. If the services of the contractor are needed and provide value, the contractor needs to be paid accordingly

Insurance Repair Projects

By Michael Stone – (Feb 10, 2016)

A coaching client shared two recent experiences while doing insurance repair projects. One was positive, one wasn’t.

When Your Client Sets the Price

By Michael Stone – (Jan 27, 2016)

When your client wants a lower price, something has to change. It shouldn’t be just your price.

Getting Quotes from Subs

By Michael Stone – (Jan 13, 2016)

Without a paid design agreement from the client, you aren’t sure you’ll get the job. Your subs are even less sure they’ll get the job.

Practice Listening

By Michael Stone – (Nov 25, 2015)

It’s the beginning of the holiday season, and I’d like to talk about a topic that can change both your sales ratio and your family relationships.

Documenting Jobs

By Michael Stone – (Nov 18, 2015)

There are two benefits to documenting your jobs. One is protecting yourself in case there is a disagreement about the project. The other is providing information that will help you when you’re promoting your business.

Continuing Your Education

By Michael Stone – (Oct 21, 2015)

One of the pitfalls of graduating from high school and/or college is the belief that you’ve finished your education. I close my classes with a slide that says, “To Keep Your Money In Your Company,” with an arrow pointing to “Education.”

Cutting Prices

By Michael Stone – (Sep 30, 2015)

I can’t tell you how many times in the past few weeks I’ve had contractors tell me they are cutting their prices to get work. I even took a call from a contractor who told me we should come to his town “because all the NARI members are busy cutting their prices.”

Stay the Course

By Michael Stone – (Sep 9, 2015)

Ever had a day, maybe a week, where you said, “That’s it, I’m done. Enough already.” You wanted to put a sign in the front window: “FOR SALE: One Construction Company, CHEAP! (I’ll pay you to take this stupid thing off my hands.)”

Pricing Too Low

By Michael Stone – (Sep 2, 2015)

It is a fact of life that when you sell construction-related services, you’ll have clients tell you that your price is too high. Bless their hearts. They have no idea what would be a fair price for the work they want done, they just know that your price is too high.

Low-Value Jobs

By Michael Stone – (Aug 26, 2015)

I read many articles on the construction industry looking for, among other things, information on how the construction industry is doing and what we can expect in the immediate and near future. One statistic that always interests me is the size of the average remodeling job.

It’s Time to Stop Being Superman

By Michael Stone – (Aug 19, 2015)

In every business, some things we do eat into our profitability. Do you run your business or does your business run you?

Markup on Subs

By Michael Stone – (Aug 12, 2015)

A lot of contractors don’t believe they need to use their full markup on subcontractor quotes. Let me explain why that can be a mistake.

Proprietary Business Information

By Michael Stone – (Aug 5, 2015)

An architect he knew asked him to meet with the owners of a proposed new home. As they were discussing the project, the architect asked our friend, in front of the clients, “What’s your overhead and profit percentage?”

Know Before You Quote

By Michael Stone – (Jul 22, 2015)

It’s cheaper to ask questions than pay for mistakes. A coaching client is trying to fix the problem created by an former salesperson’s expensive omission.

Bookkeeping, Markup, Taxes, Advertising

By Michael Stone – (Jul 15, 2015)

This week I want to catch up on a few things that have been bothering me.

Owners Supplying Their Own Materials

By Michael Stone – (Jun 9, 2015)

Should you let a client furnish their own materials?

Dishonest Clients; Collecting the Final Payment

By Michael Stone – (May 27, 2015)

How do you deal with a dishonest client? I recently corresponded with a contractor concerning this issue.

Who should do the talking?

By Michael Stone – (Mar 25, 2015)

I was asked recently by an electrical supplier, “Why do general contractors often not want their subcontractors to have any communication with the home owner?”

Another Myth: Lower Your Markup for Larger Jobs

By Michael Stone – (Mar 18, 2015)

“I am working on designing a few jobs with the job costs starting around $125,000 and up. What is your opinion on markup when the job costs are getting bigger? I want to make sure I am staying competitive.”

Owner Deserves a Salary

By Michael Stone – (Mar 11, 2015)

I applaud this person’s efforts, helping someone else with the business side of business so the craftsman can continue being a craftsman. But this craftsman is going to have to either learn how to run a business or start charging enough for his work to both feed himself and pay an office manager.

Work Product Exclusion, Hiring Subcontractors

By Michael Stone – (Mar 4, 2015)

Last week’s article discussed the pros and cons of using employees or subcontractors to get jobs built. This week, Myles Corcoran of Myles F. Corcoran Construction Consulting Inc., presents another point of view.

Subs or Employees, That is the Question

By Michael Stone – (Feb 25, 2015)

Recently I’ve had a number of discussions with company owners about how to get their jobs built. It all comes down to using subs or employees, or as some like to say, “Should I be a paper contractor or a real contractor?”

Conduct Business Like a Business Owner

By Michael Stone – (Feb 4, 2015)

One of our coaching clients was telling me about his problems finding a subcontractor for a job. If you’re a general contractor, this might sound all too familiar.

Generals and Subs: Working Together

By Michael Stone – (Dec 10, 2014)

It’s important to define the ground rules of your relationship.

Accounting – Keeping Track of Your Jobs

By Michael Stone – (Aug 27, 2014)

It’s easy to know if you’ve made a profit when every transaction is complete in a day. It isn’t as easy in construction, where a job might take a week, a month, or even more than a year to complete.

Supply and Demand

By Michael Stone – (Jul 16, 2014)

The services offered by construction businesses are in high demand right now. Can we look at this industry from another viewpoint?

The Games People Play

By Michael Stone – (Jul 9, 2014)

Why would a developer ask for a cost plus quote to replace a fixed price quote? Because he wants the very same work done at a lower price.

Getting Involved with a Storm Chaser

By Michael Stone – (Jun 18, 2014)

Last week, a contractor called to ask my opinion on getting involved with storm chasers that were in his area.

Getting Business as a Sub

By Michael Stone – (Jun 4, 2014)

One of the questions we’re asked most often is how a subcontractor can get jobs. How do you go about meeting general contractors and letting them know you’re available to build their jobs?

When Clients Do an End Run

By Michael Stone – (May 28, 2014)

Stay ahead of your clients. Write a detailed contract that protects you from as many unpleasant scenarios as possible, and work from written agreements with both your subcontractors and your employees. 

Most Profitable Construction Business Model: Do You Need Employees?

By Michael Stone – (May 21, 2014)

What is the most profitable construction business model? Do you need employees? /p>

When Should You Cut Your Markup?

By Michael Stone – (Apr 30, 2014)

As the economy slowly improves, we are being asked to revisit issues we haven’t discussed for many years. 

Can You Afford to Hire?

By Devon Stone – (Apr 11, 2014)

Can you afford to hire a new office employee, or take on any overhead increase? (video)

Things That Cause Problems, or, How to Upset Your Clients

By Michael Stone – (Mar 20, 2014)

Seven issues that upset clients. And when clients are upset, either you won’t make the sale or you might not get paid.

Making Money, Losing Money or Breaking Even? What Now?

By Michael Stone – (Mar 12, 2014)

Last week we discussed knowing where you stand financially, whether you are making money, losing money, or breaking even.  What now?

Making Money, Breaking Even, Losing Money

By Michael Stone – (Mar 5, 2014)

This is the criteria I use to tell if a company is making money. It isn’t the only measure, but it’ll give you an idea of how your business is doing.

Markup Materials Only?

By Michael Stone – (Feb 13, 2014)

In a perfect world, estimated costs will match actual job costs. At the end of a perfect year, total job costs will equal projected job costs. It’s not a perfect world.

It’s Time to Change Our Image

By Michael Stone – (Jan 8, 2014)

I have an audacious goal. I’d like to see a shift in the public perception of the construction industry.

Race to the Bottom, or “How Low Can I Price This Job?”

By Michael Stone – (Sep 25, 2013)

Cutting your price to get a job is a money losing approach. Over time, you won’t be making a profit and you’re only working yourself into debt.

How Much Should a Contractor Charge?

By Michael Stone – (Sep 10, 2013)

Many of our website visitors aren’t contractors, they’re clients looking for help with a Cost Plus project gone wrong, or wondering if their contractor is overcharging.

Employees – Three Details that Cost Money

By Michael Stone – (Aug 7, 2013)

You’re in business to provide a service and make a profit doing it. Three employee issues that cost your construction company money.

Adjusting Your Markup Based on the Job

By Michael Stone – (Jul 31, 2013)

Many contractors use a variable markup or margin to price jobs. They believe that in the construction industry you have to reduce the price to get the job.

What’s the Right Contractor Salary?

By Michael Stone – (Jul 10, 2013)

If you’re a contractor, how much should you be paid to own and run your own construction company? How much should a construction company owner be paid as salary?

State by State Guide to General Contractor Bond Amounts

By Brian Javeline – (Jun 28, 2013)

General contractor licensing and surety bond requirements by state to help prepare for running a sound business.

You Can’t Make This Stuff Up!

By Michael Stone – (Jun 26, 2013)

We use Google Analytics on our website. It tells us how many visitors we’ve had and what brought them to our website.

As Rude or Opinionated as you can afford to be

By Michael Stone – (Jun 19, 2013)

You don’t want to lose business because of a comment that you post or email. Even if you think it’s hidden in a dark corner, it can cause a problem

Markup and Margin Calculations

By Devon Stone – (Jun 13, 2013)

Our newest six-hour class, based on the book “Markup & Profit, A Contractor’s Guide Revisited”, second hour, on markup and margin calculations.

Paying Owner’s Salary

By Devon Stone – (Jun 11, 2013)

Our newest six-hour class, based on the book “Markup & Profit, A Contractor’s Guide Revisited”, is now available. This clip is from the first part on financial requirements.

Pricing Jobs Right

By Michael Stone – (May 29, 2013)

Not charging enough for your work is the major reason construction companies fail. Here are some of the mistakes contractors make when pricing their jobs.

Markup and Profit Recording

By Michael Stone – (May 28, 2013)

Michael Stone discusses why contractors go out of business, the correct formula for markup, charging for change orders, employees and cash flow, and payment schedules.

Hire Your Own Subs

By Michael Stone – (May 3, 2013)

From time to time, you will go out to see a potential client about doing work for them and they’ll ask if they can choose their own subs for their job.

Letter From an Architect

By Michael Stone – (Feb 13, 2013)

By providing background, Michael Beck helps us understand how the relationship between architects and contractors has developed over the years.

It’s Your Business

By Michael Stone – (Feb 6, 2013)

A contractor on the east coast was frustrated with how he was being treated by architects. For starters, they were requesting a list of all his subcontractors.

I Have to Be Competitive!

By Michael Stone – (Feb 5, 2013)

You don’t have to be competitive. You have to be profitable. If you aren’t profitable, your business won’t last.

All that Glitters . . .

By Michael Stone – (Jan 23, 2013)

Is buying a construction business franchise a smart idea? The sales pitch is good, promising a proven method to run your business and a proven path to wealth.

Paying Yourself

By Michael Stone – (Jan 9, 2013)

You’re in business to provide a service and make a profit doing it. Having the financial info you need to make decisions is critical for your business success.

Insurance Repair Work

By Michael Stone – (Oct 31, 2012)

A construction magazine said half of their subscribers were in the path of a hurricane. How many of those contractors are taking advantage of the potential new business?

There is No Industry Standard

By Michael Stone – (Oct 30, 2012)

Don’t take any job where the client tells you how much you can charge for your work.

“I Work in a Competitive Market”

By Michael Stone – (Oct 30, 2012)

Don’t worry about what “the other guy” is charging.

Your Price is Too High

By Michael Stone – (Oct 30, 2012)

“Your price is too high” means you haven’t done your job as a salesperson.

How to Start Your Website

By Devon Stone – (Oct 30, 2012)

Building a website for your small business doesn’t have to be expensive, and it isn’t that complicated when you understand how it works..

Guidelines for Success

By Michael Stone – (Oct 30, 2012)

Guidelines to a more successful construction-related business.

Ten Cardinal Rules for Construction Business Owners

By Michael Stone – (Oct 30, 2012)

Ten Cardinal Rules for a successful construction-related business.

Building Quality Jobs

By Michael Stone – (Oct 27, 2012)

How do you define quality? Who sets the standard?

Close Out Package

By Michael Stone – (Oct 11, 2012)

As you’re walking out the door on a finished project, you want your clients to remember you as the company that went the extra step for them.

Construction Pricing is Cost Based

By Michael Stone – (Sep 28, 2012)

One of my coaching clients told me recently about a client who is quite affluent and apparently has been taken advantage of by several contractors over the years.

Overhead Creep

By Michael Stone – (Sep 12, 2012)

Overhead creep is one of those subtle things that business owners often don’t notice. It leads to cash flow problems real quick.

What It Costs to Be Lowest Bidder

By Michael Stone – (Jul 25, 2012)

Why would any serious construction-related business owner want to be the lowest bidder on a project? Let’s look at what that means.

Rounding Up, not Down

By Michael Stone – (Jul 18, 2012)

When we talk about making money, it's rarely about big chunks of change. One overlooked item that costs money is rounding numbers. For instance, your markup.

Employees to Volume Ratio

By Michael Stone – (Jul 16, 2012)

In our book we talk about the ratio of employees to dollar volume of business. Many contractors ignore this ratio and get caught up in the urgency of building a job.

Know Your Cash Flow Needs

By Michael Stone – (Jul 11, 2012)

Contractors have cash flow problems for two major reasons: poor money management, and poor payment schedules.

Business is business

By Michael Stone – (Apr 9, 2012)

We’ve noticed the same problem that we’ve seen with other specialties. They believe that because their work is focused on one thing, their business operates differently.

How Not to Do Business

By Michael Stone – (Mar 15, 2012)

A friend called today with a problem. He subbed his work to a general contractor from the east coast to do a job here on the west coast at a government facility.


By Michael Stone – (Mar 1, 2012)

Transparency, as I understand it, is opening your books to your potential clients and showing them all the numbers pertaining to a job you are quoting.

Your Clients and Your Subs

By Michael Stone – (Oct 17, 2011)

Now, if you are a subcontractor, it doesn't matter what trade, if a general contractor has hired you to work on a job your obligation is to that general contractor only.

Be Debt Free

By Michael Stone – (Oct 6, 2011)

The final item on our list of things you can do to assure positive cash flow is to avoid debt. If you are in debt, set the goal of becoming debt-free.

Be Prepared to Pay Taxes

By Michael Stone – (Oct 4, 2011)

Far too often when contractors come to us for help they are behind paying one or more of their taxes. Don’t let this happen to you.

Watch Your Overhead

By Michael Stone – (Sep 29, 2011)

It's important to set goals for your business. It's also important to track, on a month by month basis, how close your actual finances are to those goals.

Know What You Need, and When

By Michael Stone – (Sep 22, 2011)

In order to have a positive cash flow, it helps to know what your cash needs are today, in six months, and a year from now.

Volume Built per Employee

By Michael Stone – (Sep 20, 2011)

If you find yourself struggling to make payroll, there could be a lot of things wrong and one of them might be that you have too many people on that payroll.

Use the Right Payment Schedule

By Michael Stone – (Sep 13, 2011)

If you want positive cash flow in your construction business, make sure you're using the right payment schedule on your contracts.

Your Opportunity Clock

By Michael Stone – (Aug 25, 2011)

Are you getting the most out of your day? Are you taking advantage of your time here, to do your best, both for yourself and your family?

Sending Invoices for Construction or Handyman Work

By Michael Stone – (May 16, 2011)

Invoicing is one way clients delay paying. "Thanks for doing that work, send me an invoice, okay?" Why do contractors agree? Maybe they believe everyone does it.

Plus Overhead Plus Profit

By Michael Stone – (Apr 13, 2011)

A reader recently sent in a note asking for my input on this statement that a government agency attached to a "bid package" for work they want done.

Bigger doesn’t always mean more profitable

By Michael Stone – (Mar 1, 2011)

Often when I talk with contractors, I hear, "I want to grow my company so I can make more money." Consider this, if size mattered, dinosaurs would still be here.

The Job Price Isn’t Negotiable

By Michael Stone – (Feb 24, 2011)

I wrote a Blog post for another company recently stating that I didn't think it very smart to negotiate the price of your work. A reader agreed with me and said:

Who Pays Your Salary?

By Michael Stone – (Nov 23, 2010)

The next time anyone, including yourself, wants to complain about how much money you make, think about this quote from Henry Ford.

Your Price Isn’t Negotiable

By Michael Stone – (Sep 21, 2010)

I heard about a scam a local building owner is pulling on his subs. He has several properties and is apparently worth a considerable sum.

Recover Overhead and Profit in your Labor Rate

By Michael Stone – (Sep 15, 2010)

There are four basic ways to charge for construction services. These are fixed fee or lump sum pricing, Time & Material pricing, Cost Plus, and using an hourly rate.

Unlicensed Contractor

By Michael Stone – (Jul 20, 2010)

The old law said that the owner could recover 100% of the money they had paid a contractor if it was found that the contractor did not have a valid license.

Audits Happen. Be Prepared.

By Michael Stone – (Jul 16, 2010)

A contractor friend just went through an IRS audit. After going through all his records and asking a ton of questions, they said, "In my opinion, you owe us $22,000."

Owning a Residential Remodeling Business isn’t Easy

By Michael Stone – (May 27, 2010)

He expected to make "millions". He wanted me to teach him how to do estimating "easily". That, he claimed was the only thing that he didn't know about this business.

Relationship Between Sales and Owner’s Salary

By Michael Stone – (Mar 18, 2010)

We had a question come in this week from a contractor asking about how to calculate the volume of business a company needs to support the owner’s salary.

Construction Company Turnaround

By Michael Stone – (Jan 19, 2010)

Do you wonder if the book, Markup & Profit; A Contractor’s Guide can help your business, even in today’s economy? Check out a note we received earlier this month.

What Makes the Most Money?

By Michael Stone – (Jan 14, 2010)

I’ve talked about focusing your attention on the 1, 2, or maybe 3 things you do well and make the most profit on. Doing a good job of advertising and promoting those.

Do You Have Business Interruption Insurance?

By Michael Stone – (Jan 5, 2010)

Business Interruption Insurance is among the least understood and often most poorly written coverage.

Price Your Services Fairly – Then Hold Your Ground

By Michael Stone – (Dec 28, 2009)

She got a call from a guy about cleaning 300 feet of his driveway. When she told him her minimum trip charge ($300), she heard the famous, "Your rates are too high!"

Selling On Price Alone

By Michael Stone – (Sep 3, 2009)

I was reminded again recently of the need for in-house training on what it takes to pay the bills in a construction related company.

Becoming a Construction Business Owner?

By Michael Stone – (Jul 9, 2009)

When people lose their jobs, many decide to start their own business

Competitive Bidding on Construction Projects

By Michael Stone – (Jul 8, 2009)

Bidding work just to keep busy and keep employees working is financial suicide.

“Transparency” or Proprietary Information?

By Michael Stone – (Jun 29, 2009)

Someone once said, “No man’s business is safe while the legislature is in session.” Here is another example.

Price Fixing in Construction

By Michael Stone – (May 28, 2009)

During a recent survey, comments were made about price fixing. They referenced the Sherman Antitrust Act and association warnings about the appearance of price fixing.

Markup, Margin . . . Does it really matter?

By Michael Stone – (May 21, 2009)

If you read the two previous blog posts you know markup and gross margin. Today we'll look at one of the major mistakes made when calculating the sales price.

Using Gross Margin to Price Jobs? Better Use It Correctly

By Michael Stone – (May 21, 2009)

Yesterday markup – today gross margin. Let's look at using your gross margin to calculate the correct sales price for your work.

Markup vs Margin and Why You Should Care

By Michael Stone – (May 19, 2009)

There’s a lot of confusion over using markup vs margin to price jobs.

Is a Trade Association Worthwhile?

By Michael Stone – (Apr 23, 2009)

An association exec said, "Many associations are now struggling to get through the recession, and losing members and sponsorships."

Don’t Cut Corners – Someone will have to fix your mess!

By Michael Stone – (Apr 21, 2009)

Do your work. He would go on to explain the meaning of that phrase and part is if you do something, do it right. Don't cut corners, don't do it good enough, do it right.

Selling a Construction-Related Business

By Michael Stone – (Apr 13, 2009)

I’ve heard any number of people say they are going to build their business up, then sell it. Let’s talk a bit of reality.

Run a Profitable Construction Business

By Devon Stone – (Apr 4, 2009)

Michael takes a minute to talk about the value of making a profit. (video)

Every day, in every way, I’m getting better and better

By Michael Stone – (Jan 23, 2009)

The housing economy leaves a little to be desired. Don't count on the government to solve that problem. We have to take responsibility for and solve it ourselves.

The Pain of Discipline

By Michael Stone – (Jan 19, 2009)

This quote from Jim Rohn is particularly true for construction business owners. There are a lot of things that need to be done and we need the discipline to do them.

Labor Rate for Construction

By Michael Stone – (Oct 28, 2008)

I’m frequently asked for the “industry standard” rate per hour for various types of work. There isn’t an industry standard markup, and there isn’t an industry standard hourly labor rate.

Is It Gouging or a Fair Price?

By Michael Stone – (Aug 7, 2008)

An earlier post of ours is getting a few homeowners riled up. The post discusses homeowners who have contacted us, unhappy about the prices their contractor is charging.

Is a Contractor’s License Important?

By Michael Stone – (Aug 5, 2008)

Why would you choose someone that has chosen to work without a business license for 30 years?

Construction Company Clothing

By Michael Stone – (Jul 15, 2008)

Had a two-part question from one of our …

Construction Company Clothing Read More »

Running a Business or Being a Craftsman?

By Michael Stone – (Jul 1, 2008)

Earlier this year I had the opportunity to interview with Brian Javeline for The Contractor Show. Our episode was just posted.

Markup for Insurance Work – What’s Fair?

By Michael Stone – (Jun 12, 2008)

The truth is, no contractor can survive on 10% overhead and 10% profit.

Construction Company Structure

By Michael Stone – (May 29, 2008)

Are you an LLC? S-Corp? C-Corp? Does it matter?

Focus Your Construction Business on the Profitable Jobs

By Michael Stone – (Apr 15, 2008)

The ancient Chinese philosopher Confucius said, "The man who chases two rabbits catches neither."

General and Specialty Contractor relationships

By Michael Stone – (Feb 28, 2008)

In the last month I’ve heard from more specialty contractors having problems being paid by generals than I’ve heard in years.

Fixed Price Quotations or Itemization?

By Michael Stone – (Feb 26, 2008)

I read an article telling general and specialty contractors to give itemized estimates. Oh joy. It talks about goodwill, trust, comparing estimates, and other tripe.

Choosing a Contractor – Dealing with a Bad One

By Michael Stone – (Jan 17, 2008)

There is no way on God’s green earth I could pretend there aren’t unethical contractors.

Using a Variable Markup to calculate Construction Job Price

By Michael Stone – (Jan 7, 2008)

A young lady told me her husband is using a variable markup on jobs. He marks up labor 3 or 3.5 times and materials 1.5 times. He adds 10% to subcontractor quotes …

Overhead Expenses in Accounting Software

By Michael Stone – (Jul 7, 2007)

I was reminded again this week by a dear friend who is an expert in the use of QuickBooks of the necessary care that needs to be taken when you set up your accounting.

Security on a Residential Construction Job

By Michael Stone – (Jul 6, 2007)

While working on a new residential walkway project last week, we were confronted with an irate neighbor. The crew had just begun using a jack hammer and concrete saw…

Construction-Related Franchises

By Michael Stone – (Jun 9, 2007)

“I was wondering if you had any advice for contractors when approached about a franchise opportunity.”

Finding and Keeping Good Subs

By Michael Stone – (May 12, 2007)

My biggest challenge as a residential remodeler is obtaining and keeping qualified and experienced sub-contractors willing to do smaller type projects.

Spec Homes / Custom Homes

By Michael Stone – (Apr 14, 2007)

I was asked for information on the diffe …

Spec Homes / Custom Homes Read More »

Business Education and Construction – Willing to Learn

By Michael Stone – (Jan 23, 2007)

At a recent class, I was covering the basics of getting paid for additional work orders. I gave an example to emphasize the necessity of getting paid for your work.

OH&P in Construction – Using Figures Wrong Hurts Your Business

By Michael Stone – (Jan 17, 2007)

Adding overhead and profit to job costs to calculate sales price is a mistake. Contractors should use a markup calculated for their construction business.

Is it a Construction Business, or a Hobby?

By Michael Stone – (Dec 11, 2006)

Question came from a friend the other day. He said, "Michael, how do you determine whether someone in construction has a business or a hobby?"

Is My Contractor Overcharging Me?

By Michael Stone – (Nov 15, 2006)

We have had two e-mails in the past week from homeowners asking about the “Industry Standard” for pricing, wondering if their contractor is overcharging them.

Provide a Service, Make a Profit

By Michael Stone – (Oct 19, 2006)

A young businessman called. He was in a state of shock after checking his books over the weekend and found over $11,000 in receivables, much of it over 30 days.

Price Your Construction Jobs Correctly

By Michael Stone – (Aug 30, 2006)

If you are tired of starving because you have enough work but don’t have the money to pay your bills, heed these words.

Cost Plus, Cost+, Time and Materials, T & M

By Michael Stone – (Aug 21, 2006)

A coaching client was working with a potential customer who wanted a remodeling job on a cost plus basis instead of a fixed fee contract.

Salary and Markup

By Michael Stone – (Aug 2, 2006)

One of our clients called with cash flow problems. Leads were coming in, sales and production was good, correct number of employees for the volume of work, but no money.

Be Fair to your Customers – and Yourself

By Michael Stone – (Jul 18, 2006)

I talked with a young guy the other day who called about our coaching service. His company was upside down and I could tell he was hurting.

Estimated Time for a Construction Project

By Michael Stone – (Jul 6, 2006)

If your employees consistently take longer than you estimated, you need to change your method of estimating. The human body can only work so fast.

Getting Paid for Quotes – Part 2

By Michael Stone – (Apr 27, 2006)

Respect your time – get paid for the work you do.

Definition of Terms – Construction Accounting

By Michael Stone – (Apr 10, 2006)

Time for a quick review of some terms: gross profit, net profit, owner’s salary, owner’s wages. Owner’s salary is overhead, owner’s wages are a job cost.

How Much Do You Pay the Owner?

By Michael Stone – (Apr 5, 2006)

During a recent class I taught, it was clear many in the audience didn’t understand that their sales volume must be enough to support the salary of the company owner. 

Sub-Contractor, General Contractor Relationships

By Michael Stone – (Mar 17, 2006)

We keep hearing complaints about sub-contractors that don't show up on time, if at all. You need to take the time to explain the importance of being on time.

Play By The Rules

By Michael Stone – (Feb 24, 2006)

I was recently involved as an expert witness for a contractor who wasn’t getting paid for work completed. The hardest part will be proving actual expenses for the job.

Rent or Purchase Construction Equipment?

By Michael Stone – (Feb 1, 2006)

Do you rent or buy your tools or equipment? Here is a quick and dirty rule to follow. Don’t tie up money in tools and equipment that seldom gets used.

Customer Furnished Materials

By Michael Stone – (Nov 9, 2005)

A recent note said, "The client wants to furnish all the materials. They are going to give me the money to go buy the materials, should I add my markup on the materials?"

Underbidding a Job

By Michael Stone – (Aug 17, 2005)

“I’m a contractor and underbid a house. I’m almost done and just figured that out. I can’t afford this loss. What can I do besides bankruptcy?”

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