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.

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.

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?

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.

Lowball Pricing in Construction

By Michael Stone – (Oct 14, 2020)

It’s not unusual to find a contractor who sells by deliberately underpricing or underbidding jobs and making up the difference with change work orders.

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.

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.

Time and Material Woes

By Michael Stone – (Feb 5, 2020)

Time and Material contracts are full of risk, especially on larger jobs.

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.

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.

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.

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.

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.

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?

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.

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.

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.

Lower Your Price, Gain Exposure

By Michael Stone – (Jun 6, 2018)

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

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.

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.

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.

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.

An Opinion on Itemized Estimates

By Michael Stone – (May 31, 2017)

A building owner challenges our statement that contractors shouldn’t itemize their estimates.

A Minimum Price

By Michael Stone – (May 10, 2017)

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

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.

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.”

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.

Markup Worries

By Michael Stone – (Jun 8, 2016)

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

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.

Bidding or Selling?

By Michael Stone – (Apr 13, 2016)

Are you bidding on jobs, or are you selling them? There’s a difference.

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.

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.

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.”

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.

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.

Owners Supplying Their Own Materials

By Michael Stone – (Jun 9, 2015)

Should you let a client furnish their own materials?

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.”

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.

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. 

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.

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.

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.

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.

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.

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.

Guidelines for Success

By Michael Stone – (Oct 30, 2012)

Guidelines to a more successful construction-related business.

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.


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.

A Bait and Switch Scam?

By Michael Stone – (Aug 5, 2011)

Last weekend I passed a billboard on the side of the road. It loudly declared, "We will build your new home for $32 a square foot."

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:

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.

Surprises on a Construction Job

By Michael Stone – (Jul 8, 2010)

A homeowner commented on a forum. He’d been told to add $3 – $5K to a job just to cover the extras that will come up. He was under the impression this is normal.

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.

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.

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.

Cost Plus: Bad for Government, Homeowners, Contractors

By Michael Stone – (Sep 30, 2008)

During a presidential debate, one of the …

Cost Plus: Bad for Government, Homeowners, Contractors Read More »

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.

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.

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 …

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 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.

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.

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.

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.

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?”

Scroll to Top