10/21/2026
I recently was aggressively questioned by a client, on a large job, what makes me think I can charge over cost.
Is this a serious question? Do people actually think this way? The answer is yes…..not all, but I would love to explain.
Things are expensive, everything….. everything we do, everything we buy, every experience, it is all as expensive as it’s ever been. What are you that the majority of the people saying these things have never owned a business, so I would like to explain.
We are not in business for practice. We are not in business to lose money and spend money on things that you want and will benefit from on an investment. There is no such thing as a sustainable business without covering Overhead and Profit. We, as Builders are entitled to make profits, besides the fact that we complete the work one way or another, we are also responsible for all warranties, and everything that happens on that job during the present time and in the future for a specific period of time.
Right off the bat, for Contractors, or for any business really there’s a factor amount of Overhead that goes into any sort of revenue that comes into your company …. For us there’s a specific and required percentage to cover over, generally somewhere around 10 to 15% …. These things cover Insurance, workers comp, job supervision, fuel costs, Time, etc…..they cost money…. So before you’re even entering any sort of profit with a contractor there has to be cost plus at least 10%…. Then, a standard is 10 to 15% additional for profit. The problem is it’s very rare for that 10 to 15% of profit to be there at the end after mistakes or time delays or things that are beyond our control that we somehow are responsible for. Many customers like to make changes and not pay for them and that’s a fact.
On a 300k job, if a contractor is super efficient with zero mistakes and no cost rising in between (which is unheard of), what contractor might walk away with $30,000 on a job like this….. a job of that caliber is probably somewhere around eight months of actual construction time and probably about six months of planning so you’re talking about over a year for this type of profit….. now calculate that most small construction companies with an office and a payroll probably needs somewhere around $40-$50,000 a month just to operate. $150 thousand plus in insurances for the year, and so on and so forth.
So yes, General Contractors 100% charge profit Overhead on the jobs they complete….. and no, it’s not just making a call and sending someone to do the job and making money. We are responsible, liable, and in charge of getting things done. If all of these subcontractors were able to do these job jobs without supervision and guidance then there wouldn’t be General Contractors at all. Just the amount of babysitting and follow up. We have to do a loan makes us worth our weight in gold. What kind of a business person would throw something in on a job, lose money by not charging Overhead, and then be responsible for a product material and labor for nothing?
Just like anywhere else in the world, if you want something, you have to pay for it, and every single manufacturer, Store, vendor, Restaraunt, and any retailer in the world makes a profit….. I have no idea why a lot of people think that general contractors are not entitled to do the same thing.
Rant over
Have a lovely day and thank you to our special group of amazing customers that treat us with respect and dignity (and actually pay their bills)
