Itemized Markup in Estimates
How should I show markup, in a construction project estimate?
Goldenseal estimating software isn't particular about how you handle markup on your estimates. You can use a single markup amount, or you can break it up into smaller components.
NOTE-- Click the link for more details, on how you can set up markup amounts to cover overhead and profit.
Some people use a single markup percentage, to cover all "soft costs" such as overhead, profit, contingencies and inflation. It is simple, and you can use a suggested "rule of thumb" markup percentage as mentioned in business books and classes.
After you have entered hard costs, follow these steps to enter a single markup percentage:
NOTE-- Use Percent of Total if you use a retail markup percentage (based on the final price including markup). In that case, a project with $100 of hard costs and 25% markup will charge out at $133.33. Use Percent of Hard if you want to add a simple percentage to your hard costs. In that case, a project with $100 of hard costs and 25% markup will charge out at $125.
If you use a single markup percentage, you'll probably want to hide overhead in the printed forms that you give to the customer.
Multiple Line Items
Many people find the markup calculation to be more understandable if it is broken up into its components. You can include any or all of the following items:
To add multiple markup items, follow these steps:
HINT-- Using multiple markup items is especially helpful if you print "open book" estimates, and show your markup percentages. Using many small percentages is less scary than one big one!
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