Most contractors will not come out and tell a client their overhead, direct labor and profit numbers. Many contractors do not even know what their overhead costs are as a percent of each project. Many contractors don’t consider their direct labor as a cost to be reimbursed separate from profit. Some clients might reason that the contractor who forgets to properly account for their overhead costs and their own labor might be less costly to hire and so a good choice. We would only suggest that a contractor (like any business person) who fails to properly account for their costs of doing business is likely to not stay in business. Some contractors are able to survive for years without really understanding their costs but as soon as the construction industry slows, they often quickly go out of business.
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