Feb 26, 2018 10:01 am
New to the forum.
I recently received a quote for a concreting job for approx $25K + GST for a 225sqm house slab.
I have had a read of many forums and spoke to several builders etc. and this seems like the going rate.
I am quite intrigued with the concreting industry and was just wondering, from a purely business perspective, what sort of net profit margin (after all wages paid etc) it is possible to achieve for completing/ concreting a house slab, assuming it takes 3 days from start to finish to complete.
I understand this sort of information can be quite sensitive, so I’m also open to any concreters / people in the know directly messaging me.
It’s extremely difficult to get these sort of answers by getting in touch with concretes direct, so I thought I’d give a shot in posting on a forum.
Re: Concreting House Slab Profit Margin2
Feb 26, 2018 10:56 am
No one is going to divulge their margin to satisfy your intrigue. If you really want to know then you have to do an estimate and to do that you need to be experienced estimator. Concreting is hard work and many contractors don't make enough. My advice is shop around for the best price from a pool of experienced contractors and don't concern yourself with what they make.
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Re: Concreting House Slab Profit Margin3
Feb 26, 2018 11:01 am
Thank you for your response.
I am not concerned with their margin because I have a problem with what I am being charged. I fully respect the work that concreters undertake and strongly believe their work is worth what they charge.
As was specified in my query, yes I am asking from a perspective of 'intrigue', but not to try and shop around the quote I have received, but out of an intrigue of getting in to the industry myself. I believe this is a necessary step in the due diligence process, and is why I welcomed being directly messaged rather than a response being publicly posted, given the sensitive nature of the information.
Re: Concreting House Slab Profit Margin4
Feb 26, 2018 11:52 pm
Are you in NSW? This is a very very decent price, from what I am aware of, if it includes footings, cost of concrete and steel.
Will you be able to share a contact, who provided you this quote, privately?
Re: Concreting House Slab Profit Margin5
Feb 27, 2018 12:02 am
With regards to your original question, my understanding that concretors mainly charge you for their own labour (finishing, form work, steel work) and rental of their equipment (e.g. forms, pump) - they generally do not charge any margin for the concrete or steel and in most cases are okay if you supply your own concrete or steel.
Re: Concreting House Slab Profit Margin6
Feb 28, 2018 8:21 am
I agree it is a fair price, because the work they do is extremely difficult and also very, very necessary.
In saying this, are any of my assumptions on the following cost breakdown incorrect, or am I missing anything?
On a $25K job, let's say we are looking at 25m3 for the full job (assuming 250sqm).
From a high level cost breakdown, assuming there is a 4 man crew (including the company owner), the following outlay should be achievable:
$200/m3 for concrete at trade price (to be conservative) = $5,000
$8/sqm for steel on a 250sqm slab = $2,000
Crushed Rock = $1,000
Waffle Pods = $3,000
Labour = $4,000
Additional Costs = $3,000
Total = $18,000
This is a total of $18K, and that is assuming that concrete can only be bought at $200/sqm for a trade rate (and I know it is cheaper).
There is still $7K in it..
What other additional costs am I missing / what incorrect assumptions have I made from a cost perspective?
Re: Concreting House Slab Profit Margin7
Feb 28, 2018 10:22 am
Without going into the specific direct costs, you're also not factoring all the indirect and overhead costs - insurance, capital costs (equipment and vehicles, including any interest/leasing costs), business compliance, dead time (quoting, transportation, administration, any compliance paperwork), plus not forgetting the salary to owners - no point in running a business if you can't make a living from it. From experience (having worked in both public practice accounting and business analysis). From an investment point of view I'd be wary about any business like this which is making a gross margin on the job of less than 25% and preferably 30% - those seem to be generally the margins you need to pay all your overheads and on-costs and run a sustainable business these days.
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