Are You Shorting Yourself on Bids?

(If you don't consider this, you probably are!)

So, you're putting together a bid for a customer on a series of new windows. Once you calculate the cost of materials and  labor and it adds up to $8,000 before you calculate profit (we are keeping with easy round numbers for this example.) You want your profit margin to be 20% on this job.

Using your calculator you add (+) 20%, right?  (WRONG!)

Too many contractors short themselves on their bids and do not even realize it. Using a mutation of what they believe is the cost plus method (this is not the actual cost plus method, as that is a way of calculating labor expense), they take the overall job cost and add a percentage of that for-profit say 20% in this case.
 
$8,000 (job cost) x 1.2 (the supposed profit) = $9,600  (WRONG!)
 
You want 20% of the overall bid to be profit in your pocket right? Well at this rate you have just SHORTED YOURSELF $400.00 on a $10,000 job. That’s a new power tool at a minimum and could even have been a new deer rifle in your gun safe. So how are you supposed to calculate 20% of your bid as profit?
 
It’s so simple your gonna laugh, to keep yourself from tearing up.
 
$8,000 / .8 = $10,000  (CORRECT!)

You have taken the job cost, $8,000 and made this 80% of your total bid by dividing the job cost by.8.  By dividing your total job cost by .8, you have just made that $8,000 into 80% of your total bid, and you are left with a profit margin that is 20% of your total bid. PFM? (PURE FRIGGEN MAGIC), Nah, just math!

"It's not that big of a deal,” you say…. Well, let’s try it on a little bigger project.

Let's say you are bidding a whole house. Total cost with labor included is $258,000. Your old method 258,000 x 1.2 = $309,600 gives you 51,600 in total profit (if all goes well).

Now let's try it using the correct math.

258,000 / .8 = $322,500 giving you $64,500.00 in profit. Thats $12,900 more than your old method.

So if you want a 25% profit margin, just divide by .75. Or, maybe you're looking to be a really nice guy and only take a 15% profit margin, then divide by .85.
Whatever you want your profit margin to be, just take 1, minus the margin .2 for 20%.18 for 18% and so on. And what you are left with is the divisor. Be it .8 for 20% or .82 for 18%.
 
It’s that easy!

No need for applause, but if you found this interesting, check out the training courses that are available online at licensetobuild.com. We will help you win more jobs, make more money, and sleep better at night, period.


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Watch for these Trends in 2018

If you run a construction company (large or small) it's probably a challenge to keep on top of the latest trends. Trends come and go, but maybe you should start taking some of them more seriously. It's not always technology that continually improves the construction industry. Other trends concern labor issues, spending, and hiring.

You'll also want to look at the future of sales and profits which may tend to shift as a new decade approaches.

Here's a look at what you can expect in the construction field in 2018, and how you can prepare now before that time arrives.

  1. Advances in Technology
    There isn't any doubt that technological advancements have already improved construction tenfold, expect more virtual reality and augmented reality use allowing people to tour construction sites without having to do so in person. Also look out for technologies like 3D printing, more drone use, self-driving vehicles, and more efficient coatings for specific surfaces.
  1. Modular Construction
    Pop-ups and permanent modular buildings for big-name companies will continue to be hot construction ideas. They’re also becoming more energy-efficient is always attractive to home-buyers and commercial businesses. Modular and Pop-up buildings are also growing in popularity in the disaster-ravaged portions of the US where Hurricanes, Floods, and Fires require the quick installation of permanent and temporary housing and business facilities.
  1. Cost-Saving Measures
    Price increases for supplies and skilled labor shortages are current concerns. Construction companies like yours will likely feel the need to incorporate more cost-saving measures to stay competitive. Explore the benefits of turning yourself into a design-build company to reduce middlemen. For those of you that need to keep up with your architecture license, there are online alternatives to classroom courses. Consider creating internships to train more skilled laborers to avoid heavier workloads on your other builders.
  1. Increased Safety Measures
    Construction leads the industry in workplace accidents. This is slowly beginning to improve with better technologies and procedures. It's time to take action yourself if you're still experiencing too many on-site injuries lately. Educate your employees on proper safety precautions

 

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Homes Made with Recycled Materials

Photo by Ossip van Duivenbode, courtesy of Architectuur Maken

Build a home with recycled materials? Some builders have done just that!  Check out these innovative and creative homes built entirely from reclaimed and recycled materials.  This just proves that one man’s junk is another man's treasured home. Let's start with one of the more conventional examples.

The above structure looks brand-new, but its bricks are made of waste and rubble, ceramics, glass and clay. The building was designed by Architectuur Maken who utilized a Dutch company called StoneCycling who ground up waste products and formed them into bricks.

 

Photo by Chris Cooper, Courtesy of Poteet Architects

Container Guest House in San Antonio, Texas

This house was designed by Poteet Architects for a client who wished to reuse a one-way shipping container. This eco-friendly structure sits on a foundation of recycled telephone poles and has a deck created from recycled soda bottles.

 

Photo courtesy of The Bottle Houses

And for the more eclectic homeowners, The Bottle Houses – Cap-Egmont, Prince Edward Island

These structures have a fairytale-like quality. Built by Edouard Arsenault out of more than 25,000 recycled glass bottles gathered from around the community. The three buildings took almost four years to construct and are open to the public as a tourist attraction. The three structures consist of a Six-Gabled house, a tavern, and a chapel.  Arsenault died in 1984 before completing the final details of the chapel.


 

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3 Ways to Optimize Downtime

It’s the beginning of the winter season and many of you will experience a bit of downtime between jobs.  Here are 3 ways to maximize your free time benefitting you and your business. 

#1 Create a marketing strategy for the coming year

Spending a little time planning for the future will benefit you and your business.  Put together a customized, cost-effective marketing program that will work year after year. Even seasoned contractors will learn how to build a strong marketing program and cost-effective methods of generating leads.  If you are unsure where to begin, Builders License Training Institute has created an online video course “Marketing for Contractors” that will walk you through the process and you could also earn continuing education credits for license renewal in the process.  WIN! WIN!

#2 Research the latest technological advances and equipment and how they can benefit your business specifically.  Learn to utilize them to enhance your services and increase your income and productivity. One of the more recent technological advances in the use of Drones in the construction industry.  Commercial drone usage is gaining in popularity and the demand continues to grow. Once used exclusively for military purposes, the drone is now utilized in a variety of industries. Join instructor Greg MacMaster and explore the advantages of using drone technology for Construction and Real Estate purposes.

#3 Broaden your knowledge base, learn new skills and meet continuing education requirements in the process.  Many states require a varying amount of continuing education each license renewal cycle.  Why not get a jumpstart on your education requirements and beat the deadline!  Even if you are not required to take continuing education to renew your license, you can always learn something new to enhance your skillset.  Check out the wide variety of General Education Courses available online.  While you are at it, how about providing a little education for your employees as well. 

 


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Michigan Lead Paint Certification Course

Who needs to be a Certified Renovator?

Renovation work completed for compensation (including painting), which disturbs painted surfaces in residential dwellings or child-occupied facilities built before 1978, must be performed by an EPA certified company, using an individual trained in lead-safe work practices (testing, signage, work set-up and clean-up). Each job site is required to have a Certified Renovator on site to perform specific responsibilities.

How do I become a Certified Renovator?

You must complete an EPA-approved 8-hour training course.

Where can I take an 8-Hour EPA-Approved Certified Renovator course?

The Grand Traverse Area Home Builders Association in partnership with Builders License Training Institute is offering an EPA-approved 8-hour Certified Renovator course on Friday, December 8th of 2017 from 8am-5pm. The class will cost HBA members $185 and non-members $225.

Register Now

Class Location:

HBA of the Grand Traverse Area
3040 Sunset Lane
Traverse City, MI 49684
Lunch Will Be Provided

Contact Info:

Debbie is available to answer questions or help you register.
debbie@hbagta.com
231-946-2305


 

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New Rules For Construction Supervisors

NEW RESTRICTIONS FOR ONLINE CEU CLASSES

If you want to avoid going to a classroom to complete your continuing education requirements, be sure to purchase your online classes early! 

According to the Board Of Building Regulations and Standards,

"You may complete up to a maximum of 6 hours via online training.
The remaining hours must be completed through in-person, classroom training.
This is a change with the Ninth Edition that will become effective January 1, 2018." 

If you purchase your online course prior to December 31, 2017,
you can complete all of your continuing education online by June 30, 2018.  After which, you will no longer be able to complete more than 6 hours of continuing education online. 


Purchase your course before 12/31/17 
SAVE 15% with coupon code MC15

 

State approved Continuing Education for renewing your 
Construction Supervisor License.
*Individual Classes Also Available.

UNRESTRICTED CONSTRUCTION SUPERVISOR

COMPLETE
12 - HOUR PACKAGE
$99

START NOW

 

COMPLETE
12 - HOUR PACKAGE
$99

START NOW

 

UNRESTRICTED CONSTRUCTION SUPERVISOR

COMPLETE
10 - HOUR PACKAGE
$79

START NOW


 

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Rhode Island Construction Industry on the Rise – Obtain or Maintain Your Registration

Now is an opportune time to obtain or maintain Rhode Island contractor registration. Employment in the construction sector is expected to increase over the next 6 years with 2,887 new jobs being created by 2024. In addition, over 3,137 contractors are expected to leave the field within this same time frame leaving 6,024 jobs open.

Interested in obtaining Rhode Island contractor registration?

Any person who wishes to register as a contractor shall submit an application which shall include:

*Applicant must be at least 18 years of age.

Need continuing education to renew your Rhode Island contractor registration?

All Rhode Island contractors must obtain 5 hours of continuing education every two years to renew registration. Registration cycles begin the day contractors receive their registration and end on the first day of that same month two years later. If you received your card on May 15th, 2015, your renewal date is May 1, 2017.

Builders License Training Institute offers approved online continuing education classes in a complete 5-hour package or as individual courses at www.licensetobuild.com.  Classes are mobile friendly and available from the date of purchase to the end of the renewal cycle, 24 hours a day, 7 days a week. Course certificates are submitted by Builders License Training Institute the next business day.

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Updated Requirements for Construction Supervisors

As of August 1, 2017, anyone who is renewing their CSL will be required to add their HIC License number to the renewal form provided by the State. The form should arrive (at the address you have on file with the State) about one month prior to your renewal date. Click here for a link to the clarification letter provided by the State of Massachusetts.
 
If a HIC License number and the expiration date is not provided on your renewal form, your license will not be processed. The State will return your renewal form, along with an explanation and require that it be resubmitted.
This will delay the processing of your license renewal!

If you don't have a HIC, need to register for one or are unsure if you should have one, click on this link to the Mass.gov website for a detailed explanation: visit http://www.mass.gov/homeimprovement

 


 

DON’T FORGET YOUR CONTINUING EDUCATION

Unrestricted Construction Supervisors: 12 hours of continuing education

Restricted Construction Supervisors: 10 hours of continuing education

 


 

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Oregon CCB Advertising Requirements

The Construction Contractors Board (CCB) requires contractors display their CCB license number on almost all promotional and business materials. Homeowners use these numbers to verify the license of contractors before hiring them. Failing to provide CCB numbers on required materials will not only result in a $400 fine, it will also result in the loss of business as many homeowners will not hire a contractor they cannot verify. The letters CCB must precede license numbers, for example, CCB #133456.

License numbers are required on:

  • Written bids
  • Business cards
  • Advertising (websites, telephone book, newspaper, radio and tv ads)
  • Building-related contracts
  • Business letterhead
  • Written inspection reports
  • Business signs at construction sites
  • Business vehicles with signage

NOTE: CCB numbers are encouraged but not required on items where they are not practical. For example, pens, pencils, refrigerator magnets etc.

 

 

DON’T FORGET YOUR CONTINUING EDUCATION

All Oregon contractors must complete continuing education before renewing their license. Licenses expire two years after initial licensure.

LICENSED LESS THAN 6 YEARS
Complete 16-hours of continuing education including
5-hours of Series A & 3-hours of CCB

13-HOUR PACKAGE
Oregon Approved

Starting At
$109

LICENSED MORE THAN 6 YEARS
Complete 8-hours of continuing education including
5-hours of Series A & 3-hours of CCB

8-HOUR PACKAGE
Oregon Approved

Starting At
$79

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Wisconsin Classes For Building Inspectors & Dwelling Contractors

Classes to Obtain a Dwelling Contractor Certification

The first step in obtaining a Dwelling Contractor Certification is completing a 12-hour Wisconsin approved course. Builders License Training Institute offers this course online for only $95 or as a hard copy book for $135. Individuals who choose to complete the course online will have instant 24/7 online access from any internet capable device. Individuals who choose the hard copy version must wait until the course arrives in the mail to begin. Once the course is completed, they are required to send the book back to Builders License Training Institute for grading. After finishing the 12-hour course contractors must complete two applications - Dwelling Contractor & Dwelling Contractor Qualifier

Dwelling Contractor Continuing Education

Dwelling Contractors must renew their license every two years by the anniversary of licensure. In order to renew, contractors must complete 12-hours of approved continuing education. Builders License Training Institute also offers this course online or as a hard copy book to be completed and mailed in for grading.

Commercial Building Inspector Continuing Education

Building Inspectors must complete 24 hours of continuing education annually by June 30th. Builders License Training Institute offers 12-hours Wisconsin approved online building inspector continuing education.

Why Choose Builders License Training Institute for your Wisconsin initial certification & continuing education needs?

Builders License Training Institute courses are available in HD video, full narration, or printable text, meaning your classes can be catered to your unique learning style. Online classes are available 24/7 from any internet capable device with the benefit of our team of licensing experts to walk you through any issues you may have.

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