Yep, that's right...missed out on another tender this week.
I was $40,000 more expensive than my underbidder.
The clients loved me, the architect loved me too...so one has to wonder why they didn't ring me and even try to haggle...
Sometimes I really HATE this industry. Another 4 weeks wasted.
I have 2 more tenders sitting on my desk waiting for my attention...so there's another 8 weeks worth of unpaid work I need to do for a slight hope of getting some more work!
Don't you just love it??
Thursday, March 22, 2012
Thursday, February 23, 2012
The Cost is the cost...
I had a bit of a disheartening day today.
About 2 weeks ago I received a referral as a result of some concentrated marketing activities I've been undertaking over the last little while. Once I received the referral I spoke with the prospective client, gave him a brief rundown on who we are, what we do etc etc...and he sounded really interested, and likewise, I was interested in his job.
His plans were awesome! Fantastic new home in a beautiful area surrounded by million dollar homes right on the bay. Double storey, pool, double garage, 4 bedrooms, study...nice....something they can really grow into.
So, I sent him our portfolio to review and we ended up making our appointment to meet today.
Now, before I agree to tender any job I always insist on meeting the prospective clients so they can get a feel for me and I can get a feel for them; afterall, they're about to potentially enter into a 12-plus month relationship with me so they need to be comfortable and I need to like them.
I spent 2 hours with them discussing every little thing about their new home from what sort of tiles they want to their appliances to their landscaping to the type of toilet the architect has designed into their plans, and of course, I'm diligently taking it all down to incorporate into my tender.
So, toward the end of the meeting I decide to give it a go....ask the unaskable (and rarely truthfully answered) question..."what's your budget"?
And...silence.
I continue, "I know you're thinking right now that you don't want to tell me your budget because you think I'll just squeeze my tender into your price so you'll not really get a true quote, but that couldn't be further from the truth. I'm about to invest 4 weeks of my time to do your tender, and if in the first week or so it looks as though your budget will be blown, I'll call you and discuss it with you, so it is important that I know so I don't waste your time and I don't waste my time".
This must have made sense to them because the husband says "if I can get the whole job done, including the pool (!!), basic landscaping, the driveway and the front fence for between $500 and $600,000 I'll be happy".
WHAT???
My heart sank.
Now here's the part that I can never work out...is he telling the truth or trying it on?
The house is 253sqm, and every single job I've done/am doing over the last 2 years has come in at between $3,000 and $3,500 per square metre...so, we're looking at $759,000 to $885,000 plus GST.
He claims he received a quotation for around $1,500 per square metre to lock up, which prompts me to wonder exactly what sort of corners will be cut and what sort of building the poor client will end up with, and then, what must the client think it's going to cost to fix out the home?
But, honestly, do people really think you can get a decent home built for this sort of money?
So now I have the awful job of telling this person that I won't be tendering his job unless he either re-adjusts his price expectations or comes clean with the truth about his real budget.
It was a cracker of a job, so it's really disappointing for me.
I just wish people would get a better grip of reality. I think I have to change my MO and only deal with architects from now on rather than the clients directly; at least architects may have a bit more realistic point of view that they can impart to their clients.
Till next time...
About 2 weeks ago I received a referral as a result of some concentrated marketing activities I've been undertaking over the last little while. Once I received the referral I spoke with the prospective client, gave him a brief rundown on who we are, what we do etc etc...and he sounded really interested, and likewise, I was interested in his job.
His plans were awesome! Fantastic new home in a beautiful area surrounded by million dollar homes right on the bay. Double storey, pool, double garage, 4 bedrooms, study...nice....something they can really grow into.
So, I sent him our portfolio to review and we ended up making our appointment to meet today.
Now, before I agree to tender any job I always insist on meeting the prospective clients so they can get a feel for me and I can get a feel for them; afterall, they're about to potentially enter into a 12-plus month relationship with me so they need to be comfortable and I need to like them.
I spent 2 hours with them discussing every little thing about their new home from what sort of tiles they want to their appliances to their landscaping to the type of toilet the architect has designed into their plans, and of course, I'm diligently taking it all down to incorporate into my tender.
So, toward the end of the meeting I decide to give it a go....ask the unaskable (and rarely truthfully answered) question..."what's your budget"?
And...silence.
I continue, "I know you're thinking right now that you don't want to tell me your budget because you think I'll just squeeze my tender into your price so you'll not really get a true quote, but that couldn't be further from the truth. I'm about to invest 4 weeks of my time to do your tender, and if in the first week or so it looks as though your budget will be blown, I'll call you and discuss it with you, so it is important that I know so I don't waste your time and I don't waste my time".
This must have made sense to them because the husband says "if I can get the whole job done, including the pool (!!), basic landscaping, the driveway and the front fence for between $500 and $600,000 I'll be happy".
WHAT???
My heart sank.
Now here's the part that I can never work out...is he telling the truth or trying it on?
The house is 253sqm, and every single job I've done/am doing over the last 2 years has come in at between $3,000 and $3,500 per square metre...so, we're looking at $759,000 to $885,000 plus GST.
He claims he received a quotation for around $1,500 per square metre to lock up, which prompts me to wonder exactly what sort of corners will be cut and what sort of building the poor client will end up with, and then, what must the client think it's going to cost to fix out the home?
But, honestly, do people really think you can get a decent home built for this sort of money?
So now I have the awful job of telling this person that I won't be tendering his job unless he either re-adjusts his price expectations or comes clean with the truth about his real budget.
It was a cracker of a job, so it's really disappointing for me.
I just wish people would get a better grip of reality. I think I have to change my MO and only deal with architects from now on rather than the clients directly; at least architects may have a bit more realistic point of view that they can impart to their clients.
Till next time...
Tuesday, February 14, 2012
CRM, ERP, XRM, Blah!...
Oh my goodness, someone shoot me!
I've been trialling various software products for CRM and it was driving me absolutely bonkers.
Initially I thought I just wanted CRM functionality because working off spreadsheets was driving me insane and honestly just putting me off all those things I had to do for my marketing endeavours.
Then I discovered something called ERP, which is like Project Management software (I think - this is all so gobbledegook to me), which I found appealing. Afterall, I'm working on projects that run for an extended period of time, and I'm looking to implement something now that can be used by others as well as myself in the not too distant future.
But then I started thinking, well, if I'm going to have a combined CRM/ERP solution, it's pretty dumb that I don't have the accounting functions integrated into it as well so when I'm working with my clients in the CRM I have a complete picture of their position in relation to my company....and this led me to XRM!
The X is basically anything you want it to be, as far as I can ascertain.
I thought I found something I liked that was the complete deal and it was specific to the construction industry which I rationalised was essential because of the nature of the way our industry works. I've bookmarked it for future reference as I think it was too big for us, if that makes sense.
Now, on top of all this I discovered things called SaaS, open source, on premises, hosted and managed, hosted and not managed....and I really meant it; someone just shoot me!
Why on earth couldn't I find something that I liked but I could also get on premises? Now, I'm not a ludite, and I'm ok with advances in technology, but I've got to say this whole Cloud technology doesn't quite sit so well with me yet. It hasn't been around long enough for me to be comfortable exporting my data to it and leaving it in someone elses hands to manage. Now, my data is really piddly compared to other companies out there, but still, it's my data and if something happens to it then I have to start again.
Simon (my business coach) thinks I'm crazy and says there's more chance of someone breaking into my home and stealing my laptop (where my data is stored) than there is someone hacking a cloud host and taking my data (and besides, there's not much they can do with my data anyway).
So, I did it. I purchased my first SaaS (software as a service for those uninitiated!) application yesterday.
I decided to go with a CRM that had a really "loose" style of Projects in it. I have to say it was the first one I trialled after I read someone elses blog who said she was using it too. I liked the looseness of the Projects because it really just lets me run things my way instead of how the software developers things things should be run. I trialled too many to remember but just kept coming back to this first one. It just felt better than the rest.
Next thing on the list is to see if I can work with Google Apps including GMail for Business as this CRM that I bought yesterday intergrates with Google Apps and it'll save me keeping 2 sets of contacts; one in Outlook and the other in my CRM.
On other fronts, my marketing efforts are going reasonably well and Simon and I are developing a rather good system for all the marketing I need to do. The only problem is I'm supposed to call the people I'm directly marketing to within 2 weeks of my initial marketing to them, and I hate it. I really, really hate it. I'm finding it so hard to get motivated to do it.
It's not so much the clients directly that I have an issue calling; it's the architects that I have the problem with. Simon laughs, I'm sure, at my logic. You see, in my mind, if I'm calling an architect enquiring about potential work, it's like I'm grovelling and it's a really uneven start to the relationship. I don't do uneven very well. I like even.
I really need to change my mindset somehow so that I can think to myself that I have something they need just as much as they have something I need. Easier said than done, though...
Anyway, till next time...
I've been trialling various software products for CRM and it was driving me absolutely bonkers.
Initially I thought I just wanted CRM functionality because working off spreadsheets was driving me insane and honestly just putting me off all those things I had to do for my marketing endeavours.
Then I discovered something called ERP, which is like Project Management software (I think - this is all so gobbledegook to me), which I found appealing. Afterall, I'm working on projects that run for an extended period of time, and I'm looking to implement something now that can be used by others as well as myself in the not too distant future.
But then I started thinking, well, if I'm going to have a combined CRM/ERP solution, it's pretty dumb that I don't have the accounting functions integrated into it as well so when I'm working with my clients in the CRM I have a complete picture of their position in relation to my company....and this led me to XRM!
The X is basically anything you want it to be, as far as I can ascertain.
I thought I found something I liked that was the complete deal and it was specific to the construction industry which I rationalised was essential because of the nature of the way our industry works. I've bookmarked it for future reference as I think it was too big for us, if that makes sense.
Now, on top of all this I discovered things called SaaS, open source, on premises, hosted and managed, hosted and not managed....and I really meant it; someone just shoot me!
Why on earth couldn't I find something that I liked but I could also get on premises? Now, I'm not a ludite, and I'm ok with advances in technology, but I've got to say this whole Cloud technology doesn't quite sit so well with me yet. It hasn't been around long enough for me to be comfortable exporting my data to it and leaving it in someone elses hands to manage. Now, my data is really piddly compared to other companies out there, but still, it's my data and if something happens to it then I have to start again.
Simon (my business coach) thinks I'm crazy and says there's more chance of someone breaking into my home and stealing my laptop (where my data is stored) than there is someone hacking a cloud host and taking my data (and besides, there's not much they can do with my data anyway).
So, I did it. I purchased my first SaaS (software as a service for those uninitiated!) application yesterday.
I decided to go with a CRM that had a really "loose" style of Projects in it. I have to say it was the first one I trialled after I read someone elses blog who said she was using it too. I liked the looseness of the Projects because it really just lets me run things my way instead of how the software developers things things should be run. I trialled too many to remember but just kept coming back to this first one. It just felt better than the rest.
Next thing on the list is to see if I can work with Google Apps including GMail for Business as this CRM that I bought yesterday intergrates with Google Apps and it'll save me keeping 2 sets of contacts; one in Outlook and the other in my CRM.
On other fronts, my marketing efforts are going reasonably well and Simon and I are developing a rather good system for all the marketing I need to do. The only problem is I'm supposed to call the people I'm directly marketing to within 2 weeks of my initial marketing to them, and I hate it. I really, really hate it. I'm finding it so hard to get motivated to do it.
It's not so much the clients directly that I have an issue calling; it's the architects that I have the problem with. Simon laughs, I'm sure, at my logic. You see, in my mind, if I'm calling an architect enquiring about potential work, it's like I'm grovelling and it's a really uneven start to the relationship. I don't do uneven very well. I like even.
I really need to change my mindset somehow so that I can think to myself that I have something they need just as much as they have something I need. Easier said than done, though...
Anyway, till next time...
Wednesday, January 25, 2012
"Get back on board, dammit"...
So, I was blog surfing this morning and came across this post. I thought it was apt so have decided to repost here.
Those were the words of Italian Coast Guard Gregorio de Falco to Captain Francesco Schettino while he was abandoning his ship, leaving 4,200 people on board to perish (at least 12 died).
When you “mess up” and difficulty strikes, how do you handle it?
Do you take responsibility, do whatever it takes to make it right, step up and take action (like the Coast Guard)… or do you shirk responsibility, leave the scene of the disaster you created and start looking for someone else to blame (like the Captain)?
The translated exchange between the Captain and Coast Guard is transcribed below. In parenthesis are examples of excuses we might use in our daily lives for not taking responsibility for common failures.
(This isn’t what I envisioned for my life. But I don’t really want to change, please…)
Captain: Please …
Coast Guard: There is no ‘please’ about it. Get back on board.
(But I send out résumés, I leave messages for my prospects, I mail letters…)
Captain: I am here to coordinate the rescue.
Coast Guard (interrupting): What are you coordinating there! Get on board! Coordinate the rescue from on board!
(It’s not my job, the president is supposed to fix it, when Monday comes…)
Captain: (inaudible)… there is another lifeboat…
Coast Guard (interrupting, yelling): You get back on board! That is an order! There is nothing else for you to consider. Now I am giving the orders. Get back on board, dammit! Is that clear? Don’t you hear me?
Captain: I am going aboard.
(The market is down, no one is hiring, our industry is in a recession…)
Captain: Look, chief, I want to go aboard but the other lifeboat here has stopped and is drifting. I have called …
Coast Guard (interrupting): You have been telling me this for an hour! Now, go aboard! Get on board!
The Captain never returned to the ship. According to the harbor master’s office, which notes the final exchange as occurring at 1:46 a.m., Capt. Schettino sought refuge on a rock at 12:30 a.m. Witnesses said he did not return to the ship to run the rescue operations, which went on until 6 a.m.
Tweet from an Italian boy named Salvatore Garzillo: “The next time someone asks me what I want to be when I grow up I am going to say: ‘a man like De Falco.’”
I’ve fallen off my diet. Get back on board!
I haven’t made my prospecting calls. Get back on board!
I haven’t been tracking my new success behaviors. Get back on board!
I stopped using the Living Your Best Year Ever Weekly Rhythm Register. Get back on board!
I’ve missed our weekly date night. Get back on board!
I haven’t been praising my team like I said I would. Get back on board!
I skipped a couple of workouts. Get back on board!
I’m off track on my goals. Get back on board!
Whatever mistakes you have made, how ever you have messed up, no matter what disaster your results might be right now, have Coast Guard Gregorio de Falco’s voice ring in your head, “Get back on board, dammit!”
Where have you abandoned ship in your life or on your goals? Tell us how you are going to “get back on board” in the comments below.
Link: http://darrenhardy.success.com/2012/01/get-back-on-board-dammit/?utm_source=Listrak&utm_medium=Email&utm_term=http%3a%2f%2fdarrenhardy.success.com%2f2012%2f01%2fget-back-on-board-dammit%2f%23more&utm_campaign=Seeds-2012-01-24&utm_content=Unlock+Your+Code+for+Success#more
Till next time...
Those were the words of Italian Coast Guard Gregorio de Falco to Captain Francesco Schettino while he was abandoning his ship, leaving 4,200 people on board to perish (at least 12 died).
When you “mess up” and difficulty strikes, how do you handle it?
Do you take responsibility, do whatever it takes to make it right, step up and take action (like the Coast Guard)… or do you shirk responsibility, leave the scene of the disaster you created and start looking for someone else to blame (like the Captain)?
The translated exchange between the Captain and Coast Guard is transcribed below. In parenthesis are examples of excuses we might use in our daily lives for not taking responsibility for common failures.
(This isn’t what I envisioned for my life. But I don’t really want to change, please…)
Captain: Please …
Coast Guard: There is no ‘please’ about it. Get back on board.
(But I send out résumés, I leave messages for my prospects, I mail letters…)
Captain: I am here to coordinate the rescue.
Coast Guard (interrupting): What are you coordinating there! Get on board! Coordinate the rescue from on board!
(It’s not my job, the president is supposed to fix it, when Monday comes…)
Captain: (inaudible)… there is another lifeboat…
Coast Guard (interrupting, yelling): You get back on board! That is an order! There is nothing else for you to consider. Now I am giving the orders. Get back on board, dammit! Is that clear? Don’t you hear me?
Captain: I am going aboard.
(The market is down, no one is hiring, our industry is in a recession…)
Captain: Look, chief, I want to go aboard but the other lifeboat here has stopped and is drifting. I have called …
Coast Guard (interrupting): You have been telling me this for an hour! Now, go aboard! Get on board!
The Captain never returned to the ship. According to the harbor master’s office, which notes the final exchange as occurring at 1:46 a.m., Capt. Schettino sought refuge on a rock at 12:30 a.m. Witnesses said he did not return to the ship to run the rescue operations, which went on until 6 a.m.
Tweet from an Italian boy named Salvatore Garzillo: “The next time someone asks me what I want to be when I grow up I am going to say: ‘a man like De Falco.’”
I’ve fallen off my diet. Get back on board!
I haven’t made my prospecting calls. Get back on board!
I haven’t been tracking my new success behaviors. Get back on board!
I stopped using the Living Your Best Year Ever Weekly Rhythm Register. Get back on board!
I’ve missed our weekly date night. Get back on board!
I haven’t been praising my team like I said I would. Get back on board!
I skipped a couple of workouts. Get back on board!
I’m off track on my goals. Get back on board!
Whatever mistakes you have made, how ever you have messed up, no matter what disaster your results might be right now, have Coast Guard Gregorio de Falco’s voice ring in your head, “Get back on board, dammit!”
Where have you abandoned ship in your life or on your goals? Tell us how you are going to “get back on board” in the comments below.
Link: http://darrenhardy.success.com/2012/01/get-back-on-board-dammit/?utm_source=Listrak&utm_medium=Email&utm_term=http%3a%2f%2fdarrenhardy.success.com%2f2012%2f01%2fget-back-on-board-dammit%2f%23more&utm_campaign=Seeds-2012-01-24&utm_content=Unlock+Your+Code+for+Success#more
Till next time...
Wednesday, January 11, 2012
Happy New Year...
Yes, and what a happy new year it will be!
I've decided to redirect this blog to encompass more of the journey I have embarked upon in rebuilding my life.
Rebuilding my life revolves, obviously, around business.
So, to give a bit of background that isn't mentioned elsewhere, I'm attempting to re-establish my family and myself via a construction company specialising in architecturally designed, higher value ($1m plus at this stage, but eventually $2m plus) residential new home construction and substantial renovation projects. My husband is the builder and the braun of the company and I am on the administration side of the company. So, essentially, I'm responsible for keeping the wheels of momentum in motion (read: getting the work).
In 2010 we secured our first job, and it was only by accident really. My husband was undertaking some detailed renovation work on a relative's home when one of the subcontractors asked my husband if he could help out his inlaws who'd engaged a project home builder who subsequently did a bit of a phoenix scheme. The inlaws didn't wish to enter into a new contract with the newly arisen company and the project sat idle for many months.
We submitted our price and eventually started work on the job in early 2010.
A few months into the job it dawned on us that we should be contracting our services out and creating a business out of it instead of wondering how the hell we can get back into property development.
Afterall, what else could we do? We were stone broke, just had our empire ripped out from under us and had to start again.
So we committed to this decision and have been banging away since then.
Since that first job, and because of that first job, we landed another job in the local area. A renovation project. We commenced and completed that job during 2011.
And again, because of that first job, we were contacted by a couple in September 2010 who were designing their new home in the local area. We worked with that couple throughout the following 12 months and in September 2011 finally signed a contract with them for us to construct their new home. Work commenced on this job in December 2011, just over a year after our initial contact with them!! What a time lag, huh?
And somewhere in between all that I picked up another job on the Northern Beaches; the client is an acquaintence of mine. We're due to hand over that job in the first quarter of this new year.
Anyway, so that's where we're at at the moment.
I've hired a business coach to keep me on track because I found that I had absolutely no clue about building a business.
When I was doing property development, it wasn't really business; it was more an entreprenuerial enterprise...
So, when it came time that I needed to go out and do marketing, and generate leads and start building my brand (which is the goal), I had no idea what I needed to do, how I needed to do it, what I needed to say or how to say it.
So, I've enlisted some help from Simon (the coach) and we've been working together since September last year. Essentially what we've been doing is working on all my marketing material, and getting some basic documentation down pat in terms of systems, which is great! I have a whole heap of systems in my head, but they're no use to anyone in my head. Everytime I thought about documenting the systems that I've implemented the task just seemed so bloody huge that it was overwhelming and nothing would ever get done. Simon helps me break it all down into bite sized chunks that I can get through relatively easily.
So, that's it.
Now, in 2012, I commence proper the marketing of my construction business and the establishment and growth of both my brand and my business.
Good luck to us, and happy new year to everyone!
I've decided to redirect this blog to encompass more of the journey I have embarked upon in rebuilding my life.
Rebuilding my life revolves, obviously, around business.
So, to give a bit of background that isn't mentioned elsewhere, I'm attempting to re-establish my family and myself via a construction company specialising in architecturally designed, higher value ($1m plus at this stage, but eventually $2m plus) residential new home construction and substantial renovation projects. My husband is the builder and the braun of the company and I am on the administration side of the company. So, essentially, I'm responsible for keeping the wheels of momentum in motion (read: getting the work).
In 2010 we secured our first job, and it was only by accident really. My husband was undertaking some detailed renovation work on a relative's home when one of the subcontractors asked my husband if he could help out his inlaws who'd engaged a project home builder who subsequently did a bit of a phoenix scheme. The inlaws didn't wish to enter into a new contract with the newly arisen company and the project sat idle for many months.
We submitted our price and eventually started work on the job in early 2010.
A few months into the job it dawned on us that we should be contracting our services out and creating a business out of it instead of wondering how the hell we can get back into property development.
Afterall, what else could we do? We were stone broke, just had our empire ripped out from under us and had to start again.
So we committed to this decision and have been banging away since then.
Since that first job, and because of that first job, we landed another job in the local area. A renovation project. We commenced and completed that job during 2011.
And again, because of that first job, we were contacted by a couple in September 2010 who were designing their new home in the local area. We worked with that couple throughout the following 12 months and in September 2011 finally signed a contract with them for us to construct their new home. Work commenced on this job in December 2011, just over a year after our initial contact with them!! What a time lag, huh?
And somewhere in between all that I picked up another job on the Northern Beaches; the client is an acquaintence of mine. We're due to hand over that job in the first quarter of this new year.
Anyway, so that's where we're at at the moment.
I've hired a business coach to keep me on track because I found that I had absolutely no clue about building a business.
When I was doing property development, it wasn't really business; it was more an entreprenuerial enterprise...
So, when it came time that I needed to go out and do marketing, and generate leads and start building my brand (which is the goal), I had no idea what I needed to do, how I needed to do it, what I needed to say or how to say it.
So, I've enlisted some help from Simon (the coach) and we've been working together since September last year. Essentially what we've been doing is working on all my marketing material, and getting some basic documentation down pat in terms of systems, which is great! I have a whole heap of systems in my head, but they're no use to anyone in my head. Everytime I thought about documenting the systems that I've implemented the task just seemed so bloody huge that it was overwhelming and nothing would ever get done. Simon helps me break it all down into bite sized chunks that I can get through relatively easily.
So, that's it.
Now, in 2012, I commence proper the marketing of my construction business and the establishment and growth of both my brand and my business.
Good luck to us, and happy new year to everyone!
Friday, November 4, 2011
Follow up...
Remember this post?
Well, I drove past this project last weekend and it's turned out to be a dog's breakfast!
Serves her right.
Well, I drove past this project last weekend and it's turned out to be a dog's breakfast!
Serves her right.
Sunday, September 25, 2011
E-Myth...
I have just read this book...I swear Mr Gerber was writing about me, my life, my experiences!!
What an eye-opener.
I have alot, lot, lot of work to do...so much that it's daunting; overwhelming even; yet exhilirating and exciting at the same time.
Stay tuned...
What an eye-opener.
I have alot, lot, lot of work to do...so much that it's daunting; overwhelming even; yet exhilirating and exciting at the same time.
Stay tuned...
Thursday, September 8, 2011
Mark Up versus Gross Profit Margin...
I stumbled across something very interesting today and just had to record it here.
Source: http://www.mrhvac.com/2010/03/26/margin-versus-markup/
Markup Versus Gross Profit Margin
We’re glad you took an interest in this topic. This topic explains the difference in gross profit margin (or profit margin) and price markup.
There is a big difference between markup and gross profit. In fact, this is one of the most common errors contractors make and it can cost you big.
Markup and margin, what’s the difference?
Short Answer
Markup is a percentage of the cost.
Margin is the same dollar amount expressed as a percentage of the selling price.
Margin is the same dollar amount expressed as a percentage of the selling price.
Example
Item costs $1.00 Items sells for $1.50.
Markup is .50 or 50 percent of the cost.
Margin is .50 or 33 a percent of the selling price.
Item costs $1.00 Items sells for $1.50.
Markup is .50 or 50 percent of the cost.
Margin is .50 or 33 a percent of the selling price.
Long Answer
Markup Defined
Markup is the difference between invoice cost and selling price. It may be expressed either as a percentage of the selling price or the cost price and is supposed to cover all the costs of doing business plus a profit. Whether markup is based on the selling price or the cost price, the base is always equal to 100 percent. Markup is the additional amount added to a sales proposal (bid) or price and which contain overhead, profit, excess costs, etc.
Markup is the difference between invoice cost and selling price. It may be expressed either as a percentage of the selling price or the cost price and is supposed to cover all the costs of doing business plus a profit. Whether markup is based on the selling price or the cost price, the base is always equal to 100 percent. Markup is the additional amount added to a sales proposal (bid) or price and which contain overhead, profit, excess costs, etc.
Margin Defined
The difference between net sales and the cost of goods sold. It is also referred to as gross profit. Gross Profit/Total Sales. The percentage of every dollar earned that can be used to pay general and administrative expenses.
The difference between net sales and the cost of goods sold. It is also referred to as gross profit. Gross Profit/Total Sales. The percentage of every dollar earned that can be used to pay general and administrative expenses.
Margin Versus Markup Formula
Applying a simple formula will determine how much the margin will be based on a percentage that the contractor expects to make. The contractor will set a margin that ensures that they will be competitive in the local market. It may or may not reflect the actual value of an item. In your example, we are looking to make an 60% margin assuming that our item costs $10. To figure out our sales price we use the following formula, expressing the margin as a decimal (i.e., 60% = .60):
Retail Price = (Cost of item)/(1 – desired margin)
Markup Versus Margin Table
| Markup % | Gross Profit Margin % | Multiplier % |
| 20 | 16.67% | 120 |
| 21 | 17.36% | 121 |
| 22 | 18.03% | 122 |
| 23 | 18.70% | 123 |
| 24 | 19.35% | 124 |
| 25 | 20.00% | 125 |
| 26 | 20.63% | 126 |
| 27 | 21.26% | 127 |
| 28 | 21.88% | 128 |
| 29 | 22.48% | 129 |
| 30 | 23.08% | 130 |
| 31 | 23.66% | 131 |
| 32 | 24.24% | 132 |
| 33 | 24.81% | 133 |
| 34 | 25.37% | 134 |
| 35 | 25.93% | 135 |
| 36 | 26.47% | 136 |
| 37 | 27.01% | 137 |
| 38 | 27.54% | 138 |
| 39 | 28.06% | 139 |
| 40 | 28.57% | 140 |
| 41 | 29.08% | 141 |
| 42 | 29.58% | 142 |
| 43 | 30.07% | 143 |
| 44 | 30.56% | 144 |
| 45 | 31.03% | 145 |
| 46 | 31.51% | 146 |
| 47 | 31.97% | 147 |
| 48 | 32.43% | 148 |
| 49 | 32.89% | 149 |
| 50 | 33.33% | 150 |
| 51 | 33.77% | 151 |
| 52 | 34.21% | 152 |
| 53 | 34.64% | 153 |
| 54 | 35.06% | 154 |
| 55 | 35.48% | 155 |
| 56 | 35.90% | 156 |
| 57 | 36.31% | 157 |
| 58 | 36.71% | 158 |
| 59 | 37.11% | 159 |
| 60 | 37.50% | 160 |
| 61 | 37.89% | 161 |
| 62 | 38.27% | 162 |
| 63 | 38.65% | 163 |
| 64 | 39.02% | 164 |
| 65 | 39.39% | 165 |
| 66 | 39.76% | 166 |
| 67 | 40.12% | 167 |
| 68 | 40.48% | 168 |
| 69 | 40.83% | 169 |
| 70 | 41.18% | 170 |
| 71 | 41.52% | 171 |
| 72 | 41.86% | 172 |
| 73 | 42.20% | 173 |
| 74 | 42.53% | 174 |
| 75 | 42.86% | 175 |
Source: http://www.mrhvac.com/2010/03/26/margin-versus-markup/
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