I’m about to contract out some of the wiring on a job for the first time. What does everyone use as a markup for their contractors? The stuff I’ve been able to find has been about general construction, and they’re talking around 50% markup. That seems a little high to me.
There is not really any simple answer, you mark up with what the market will tolerate. Keep in mind with some large construction projects part of the reason for a high markup is because payments can take 90+ days.
50% seems right. Consider this - the risk is still all on you for less profit (generally) - if the client is unhappy you will hear about it, not the contractor.
Also, how much time does this save you to focus on other work? Good comm w/the contractor is VITAL, IE a walk through of the facility, specs, documentation & pix as they go along,etc.
Might be good to meet with them at the end of each day while still onsite, or at the very least touch base telephonically.
50% is general rule but other factors should be considered such as the amount of business done with a client the total cost of job, project etc. One offs get the higher mark unless your firm is the project manager in which case you are already make a substantial fee.
Thanks for the input everyone. Some good food for thought.
I would be more concerned with how much your client is willing to pay. From there how much margin makes it worthwhile for you, from there negotiate with contractors.
The nice thing is I can markup the contractor rate by 33% and make it the same as mine. The client still hasn’t approved the project. So we’ll see.