Take the last year's sales or income and divide by 52 or just guess.
This is the TOTAL SALES number, including sub work and maintenance, etc.
Enter the average cost for materials as a percentage of your in-house Gross Income.
NOTE: EXCLUDE MATERIALS PURCHASED BY SUBS
*In-House means what your guys produce, as opposed to subs.
Enter your average hourly rate for your crew before taxes, worker's comp and overtime.
NOTE: payroll taxes, workers comp and overtime amount are automatically calculated.
How many men work in the field?
Only count your men who are doing the installing.
A MAN DAY (MD) is 8 hours of labor.
If a man works for 8 hours in one calendar day, he has worked 1 Man Day.
Tuesday:8 am - 12 pm = 4 hours12pm - 5 pm = 4 hours
Total = 8 hours
If a man works for 10 hours in one calendar day, he has worked 1.25 Man Days.
Tuesday:7 am - 12 pm = 5 hours1pm - 6 pm = 5 hours
Total = 10 hours
If you have a 4-man crew, and each man works 10 hours in one calendar day (for example Tuesday), they worked a total of 5 Man Days.
Tuesday1.25 Man Days x 4 men = 5 Man Days
You need to know how many Man Days your guys work on average each week. This is automatically calculated for you below, based on the average weekly hours each man puts in.
If you use subcontractors, what percentage of your sales do they make up?
Anywhere from 0% to 100%
The Sub markup % is the percentage you add to the Sub’s cost.
How much do you mark up your subs?
If you pay no sales commission, enter 0.
Commission is usually paid off of the gross profit (also called job profit) and not off of the sales price.
It is usually between 5% to 10% of the gross profit.
If you pay a commission % on Gross Sales, enter half that value in the box. For example, if you pay a commission that is 10% of the sale, enter 5% in the above box.
Although this is not 100% accurate, it will be close enough for the sake of these calculations.
Next we need your overhead. We look at the overhead as a bin that you must fill with money from the gross (job) profit every week. It empties out every week and you need to fill it up again. In the example below the contractor is not making it.
These are the 6 categories of money that fall into the overhead.
1. ADMIN PAY (includes owner’s, (*) supervisors’ and managers’ pay plus employer’s payroll taxes & workers comp)
2. INSURANCE COST (vehicle insurance, general liability insurance, etc.)
NOTE: workers comp for crew has already been added for you under crew labor
3. MARKETING COST
4. SMALL TOOLS & EQUIPMENT
5. TRUCKS & EQUIPMENT REPLACEMENT SET-ASIDES
6. GENERAL OFFICE EXPENSES
(*) Make sure to include your average weekly take-home pay into the overhead, even if you don't get a paycheck.
You will need to know these numbers very well
GPMD Stands for Gross Profit per Man Day.
Basically, it’s the Gross (Job) Profit each man had made you in 8 hours of work.
8 am - 12 pm = 4 hours
1 pm - 5 pm = 4 hours
When you use both subs and your own crew, the subs fill part of the overhead bin with sub GP and each man on the crew adds GP every Man Day they work (GPMD).
Assuming you have 4 men working each calendar day, your Gross Profit per calendar day at $700 GPMD would be $2,800
Assuming you have 4 men working each calendar day, your Gross Profit per calendar day at $700 GPMD would be $1,120
Assuming you have 4 men working each calendar day, your Gross Profit per calendar day at $700 GPMD would be $932
THIS is your GPMD.
YOUR DAILY LABOR RATE +
YOUR GPMD =
YOUR MAN DAY CHARGE
or YOUR HOURLY CHARGE
On our way from 4 to over 50 men and a hundred total employees, we have overcome innumerable obstacles and have built a road map everyone can use. We are now ready to share it!
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