Is the Markup & Profit Book Still Relevant?
Published in 2012, “Markup & Profit Revisited” teaches principles that don’t change, that are valid regardless of your economy. But some figures do change.
Published in 2012, “Markup & Profit Revisited” teaches principles that don’t change, that are valid regardless of your economy. But some figures do change.
Three things can quickly cause cash flow problems in construction. The first is not charging enough for your work or service. The second is using a payment schedule that uses your funds, not theirs, to build jobs. The third is too many employees.
It’s important to know how much cash your business needs, and when, so you can plan ahead and have that cash available.
A construction company building both new homes and remodeling needs to calculate a separate markup for each type of work.
Michael addresses a few different questions we’ve heard recently, primarily dealing with taxes and profit and calculating your markup.
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.
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.
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.
This week I want to catch up on a few things that have been bothering me.
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.
Overhead creep is one of those subtle things that business owners often don’t notice. It leads to cash flow problems real quick.
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.
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.
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