Masonry Magazine January 2001 Page. 64
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64 MASONRY-JANUARY, 2001
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PROFIT
PUZZLE
How much Markup
is Enough?
WARNING!
By Steve Saucerman
The following word may not be suitable for younger, impressionable magazine audiences: but in order to discuss it, I had to I'm sorry, but PROFIT! say it. I just hope you were able to get your young ones out of the room in time... after all, we all know (from what we hear) that profit is one of the dirtiest words around. Isn't it?
CONFESSING OUR SINS
But perhaps we're being too judgmental. Maybe profit is just misunderstood. Let's take a look. First, as a contractor and businessperson, you need to ask yourself the following fundamental questions about profit. First: Isn't profit a critical (if not the most critical) element of a stable and prosperous business? and secondly, Doesn't any honest businessperson-who's performing a quality service at a fair price deserve to earn some profit for his toil? Of course, if you're being honest, the answer to both questions is simply and unabashedly: yes. So, having confessed our sins and openly admitted ownership of this most horrific of human avarice (which some call greed), let's take a few moments to examine the concept of profit... and decide together how dirty of a word "profit" really is.
RESPONSIBILITY & HIERARCHY
As contractors and business-owners, we have a lot of responsibilities; some large, some small, and some that we wish would just go away. But, it could certainly be argued that we hold no higher obligation to ourselves, our families, and to our employees than in that of keeping our doors open. Solvency is truly at the top of our responsibility ladder - after all, if there's no business - it's no use sweating the details over the retirement plan! So, first and foremost, the contractor/owner must insure that the revenue generated from his services is not only adequate to cover his project costs and office expenses, but in addition, generate a measured additional revenue (profit) to provide for both unforseen (cash-depleting) events and also to ensure future growth for the company. Now, this isn't as easy as it sounds - and isn't as simple as arriving at the one perfect, golden profit percentage number. That number doesn't exist at least not in and of itself. There's much more to it. Profit will only come once it has been buttressed and fortified by a carefully conceived, sustained, and consistent company action plan that encompasses accurate job costing, job efficiency, fiscal-cognizance, and (perhaps most important) willingness - yes, even enthusiasm on the part of you and your employees in turning your profit goals into reality. Yes, of course you need to arrive at a per-
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