T&M

Hi All, What is your typical markup on materials in a T&M situation?

Thanks>>>

Customers know well ahead of time that when they buy products from the roofing co. (in a repair bid ,etc) that there are always going to be a mark-up. Charge them anyways, they are most concern with how much time you spend because of the labor rate, that is where the cost can get out of control. I would mark-up 30% on materials (NOTE: it would be very smart to create a price list with mark-up built in if they ask, alomost never do though). Then charge $80 an hr, bill from port to port to the minute and the onsite time bill by the quarter hour, customers will have a sence that they are getting what they paid for.

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As Jed said........>>>

What is the big deal? I buy the material and pass on the savings to the customer. My labor is billed out at $65 to $85 per hour depending on the job. I bill for all of my associated costs, Scaffold, tools trucks etc., add it all up and add 13 to 15%. COST +. If you can't make good money at the end of the year at 13 to 15% gross after everything is covered, something is wrong. It is a no brainer. If you are not making money, you don't have your "time" billed at a high enough rate. Know your costs!>>>

Adding 10-15% on to materials is something that is common and should be expected. Your responsible to get the right materials on the job site at the right time, you deserve it.>>>

I trust that your G&A expenses are included. Learned an interesting item in a class conducted by the Fails Institute, sponsored by OCF about 30 years ago. Materials purchase can vary from year to year, from 25 to 60% of your costs of doing business, so they claimed it is only logical to assign a similar portion of your G&A. This requires a tight handle on month to month operations. These academics were experts in construction costing, and provided interesting formulas on how to conduct a profitable business.>>>

In an economy that forces homeowners to look into every aspect of their sources of information regarding costs, quality, expected lifetime, and installer credentials, One thing I find commonly is homeowners that have a few bucks stored away for home improvements offer this scenarion...."If I can buy my materials at Home Depot or Lowes, I don't have to pay anything until April 2011. This allows me to use the cash I have... to pay you, and pay for material later." Anyone here NOT want that business? residential guys especially. Same with some commercial stuff.....property owners want to set up an account with a wholesale supplier for a huge amount of purchases. You know that your distributor will sell to anyone with a business card....and your portion of their purchase order with this distributor might be minimal, compared to other items... 'windows, doors, millwork, siding gutters etc. So...do you refuse to do business with this guy....especially if he wants a special order item that you know your going to need to pay for it possibly from a distributor that you don't have an account with. One thing I'm noticing, especially from ABC is, previously...before their corporate re-organization....they would special order anything you wanted....now.....it's "nope...all we carry is Ideal Metal roofing...no more Fabral, or Armaclad, or whatever." And I'm talking as a cash contractor....I would pay right there on the spot ...in full for the purchase order to go thru....not the old 50% down...payment when delivered.

And with the newer WIFY programs...."we install it for you", owners have a newer option in front of them where or competition in supplys is now courting our installation business as well. What's a guy to do?

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That's a good point, I would'nt use t&m with homeowners.>>>

Why let them look over your shoulder and time you with a stopwatch? Nary T&M for me. I put it in a number, roll the dice, and hope I make my margin. Of course, that's why all my profits are marginal.>>>

I sell retail, for retail, even if I pay wholesale, I don't charge more than you can buy it for, I just don't give up my discount.>>>

Materials at whatever they cost (with reciepts) Labor rates at agreed upon amount plus 13 or 15% depending on the job. I don't care who knows, because all of our work is referals!>>>

No mark up, materials at cost, time at set rate per hour.>>>