Builders Profits

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ludermor

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This could be a bit of a risky one.
I wonder what do people expect builders profit levels to be on small jobs such that arise on this board ( eg fitting kitchen. bathroom up to an extension)
 
ludermor said:
This could be a bit of a risky one.
I wonder what do people expect builders profit levels to be on small jobs such that arise on this board ( eg fitting kitchen. bathroom up to an extension)
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just spoke to my good friend a civil engineer - answer - same as a big job - should be approx 12 - 15% [profit only]
oirish
ps not my opinion or my answer
 
Does your friend mean that a builder or tradesman should be getting the same profit for a big job as a small job? I cant see how anybody can justify that statement. a builder or tradesman will make less percentage profit on a housing estate than a one off. This is true for every business not just construction.
 
Have to agree with Meathman, i know of some smaller building contractors ( turnover 1-10 million) who price some jobs at cost and hope that the odd good job will cover the ordinary ones.This is to ensure cashflow and to be able to keep workers workng. But a sum of 12-15% would not be out of the ordinary for smaller guys doing entensions.
 
ludermor-are you asking this question with view to negotiating a price for a job you want done, or for some other reason?
 
No purely out of curiousity, a lot of people here complain about builders and the amount of money builders make so i am curious as to people expectation of builders profit levels
 
CCOVICH, do you mind me asking why this was moved?
I dont think a lot of the homes and gardens posters come to this section and my question was directed at people getting buildering work done. I thought that a discussion on the topic might make pricing and profits clearer for some people
 
ludermor said:
i know of some smaller building contractors ( turnover 1-10 million) who price some jobs at cost and hope that the odd good job will cover the ordinary ones.
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Do you really believe this ? I know of some one builder a few years ago who had 50% of his turnover profit.
 
Hey lads and ladettes,

IN GENERAL the statement is correct - naturally it could not apply to every person in the construction trade/ developer etc. I am involved in the trade but most 'honest' engineers should [i repeat should] be operating on that.

take care
oirish
 
rabbit said:
Do you really believe this ? I know of some one builder a few years ago who had 50% of his turnover profit.
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A builder or developer? There is a big difference. For small builders there is so much competition that they are undercutting each other. I work for a larger builder and we wouldnt price any more than 5% margin.
 
rabbit said:
He was both.
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If that was the case im certain that he made the vast mojority of the money through the development side. The building side of things would have been working for the development. If the builder was working for another developer then the margins would be tiny. Developers are notorious for their stingyness.
 
ludermor said:
If that was the case im certain that he made the vast mojority of the money through the development side. The building side of things would have been working for the development. If the builder was working for another developer then the margins would be tiny. Developers are notorious for their stingyness.
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and builders are renowned for their generosity? :D
 
Not at all but they dont have scope for profits as developers. of course any builder will try to make as much as possible, same as any business
 
I am currently renovating a bathroom. all old stuff ( bath, sink, toilets, flooring, tiles on walls etc removed) new stuff installed this time with a power shower which will mean new wiring in the walls for the power. a good friend of mine who is in the business is doing it. he is also supplying a new door/architrave and ceiling, and also is going to change the light fittings around and also the light switch to the hall.I am supplying the bathroom items(shower/sink etc) and the tiles.his costs are €4,500. There is a another builder locally who specialises in bathrooms . his guarantee is that he starts on a monday and the bathroom is turnkey on a friday. I asked him over the phone to give me a ball park quote and he replied that ball park for a new bathroom was €8,000. €3000 for fittings, €1000 for tiles/floors and his labour €4000. thats without him coming out and actually assessing the actual site ( I didn't mention the new door/ceiling and changing the light fittings around) my friend is €500 more expensive which leads me to believe that the other 'specialist' is not over the top with his costs either. Know this doesn't answer the question but it sort of confirms that the 2nd tradesman, whom I dont know is not ripping off customers. (for what its worth 4 weeks waiting on my friend/6 weeks if I had opted for the other builder.) my actual bill for units etc was €3200 which again is pretty close to what the 2nd builder gave over the phone as his ball park figure. I'd hazzard a guess that the profit margin is pretty consistant on small work like this. dont know what it is though.
 
well i am currently building an extension and gutting house.

we got two quotes from local builders both do good work and have a great name in the town we live in.

the first guy came back with a price of €79000

and the fun starts with the second builder whose price was €125000.

now thats a difference of 46K, seeing as they are quotes for the same job does this mean that the second company have would make much much more profit even after tax and if they paid higher wages as the products used would be sourced from the same companies.
 
We are currently building an extension as well. We went with a price of €102'000 from a builder that came with a very good referral. The next best price was €132'000. The highest quote was €168'000.
 
You can never have too many quotes from builders. If some are busy and have work lined up for the say the next 6 months then they will put in huge prices. It is no loss to them if they dont get these jobs.
 
took us 8 months to get 4 quotes so I think it's a sellers market. Therefore the poor mouth doesn't wash with me.
 
I've heard in the UK (and probably happens here as well) - that sometimes local builders bidding for the same business can come to an arrangement.

Builder x wants to do the job, he knows builders y and z have been asked for quotes but are too busy. So he asks them to put in cover bids for him this time round. They'll bid prices that are too high and will make builder x look like an unmissable bargain.

Punter thinks he's getting a choice but isn't.
 
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