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.
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Employees and Cash Flow
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.
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Cash Flow Needs
It’s important to know how much cash your business needs, and when, so you can plan ahead and have that cash available.
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Overhead Differences: New Homes and Remodeling
A construction company building both new homes and remodeling needs to calculate a separate markup for each type of work.
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Taxes and Profit and Markup
Michael addresses a few different questions we’ve heard recently, primarily dealing with taxes and profit and calculating your markup.
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Know Your Numbers: Current Ratio
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.
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Profit and Loss and Markup
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.
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Bookkeeping, Markup, Taxes, Advertising
This week I want to catch up on a few things that have been bothering me.
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Accounting – Keeping Track of Your Jobs
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.
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Watch Your Overhead
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.