# how to add a markup



## dlcj (Oct 1, 2007)

NAV said:


> $100 is an easy number to work with. try working the figures with a more practical number like $24,372.43 give me a 32% profit your way. dont cheat and use my method.


$24,372.43 + 32% = $32,171.61
$7799.18 profit 
Any calculator can do that in two steps


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## DavidC (Feb 16, 2008)

NAV said:


> dont cheat and use my method.
> 
> Remember - work smart not hard.


Your secret is safe with me.

Good Luck
Dave


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## NAV (Sep 5, 2008)

dlcj said:


> $24,372.43 + 32% = $32,171.61
> $7799.18 profit
> Any calculator can do that in two steps



no thats wrong. if your cost is $24,372.43 you have to charge $35,841.80 to get a 32% profit. 

$32,171 brings the job in at about 24% profit

looks like your calculator is broken


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## dlcj (Oct 1, 2007)

Thats cuz i didnt use the doctor, lawyer, shrink,nav calulator. I used a normal math caculator.
You cant get it through you skull that we are not talking about percentage profit of the whole fing bid but just adding a percent of a given cost to said cost and thats your bid. The number added is your profit. You would never get a job in this part of the country. At least not with people who dont like throwing money away. Im done with this thread.


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## Wolfgang (Nov 16, 2008)

dlcj said:


> Thats cuz i didnt use the doctor, lawyer, shrink,nav calulator. I used a normal math caculator.
> You cant get it through you skull that we are not talking about percentage profit of the whole fing bid but just adding a percent of a given cost to said cost and thats your bid. The number added is your profit. You would never get a job in this part of the country. At least not with people who dont like throwing money away. Im done with this thread.


Bye............


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## bwalley (Jan 7, 2009)

dlcj said:


> Thats cuz i didnt use the doctor, lawyer, shrink,nav calulator. I used a normal math caculator.
> You cant get it through you skull that we are not talking about percentage profit of the whole fing bid but just adding a percent of a given cost to said cost and thats your bid. The number added is your profit. You would never get a job in this part of the country. At least not with people who dont like throwing money away. Im done with this thread.


 
NAV is a moron, he doesn't understand the difference between mark up and profit, since he doesn't understand it, he wants to teach the rest of us who do know what we are doing how to figure mark up.

I verified my way of adding 50% mark up with 1 CPA and 2 accountants, they agreed with me that a 50% mark up on $100 would have a total selling price of $150.

There are those of us that own our business, and there are those like NAV who work for someone else, there is nothing wrong with being the little Indian, the world needs ditch digger's too, I don't like digging ditches, I prefer to hire them.


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## base (Apr 16, 2008)

100 per hour with %50 profit and %30 OH equals %80 markup = $180usd

Everyone has there own way of doing things but to be profitable you have to charge a profit.


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## bwalley (Jan 7, 2009)

base said:


> 100 per hour with %50 profit and %30 OH equals %80 markup = $180usd
> 
> Everyone has there own way of doing things but to be profitable you have to charge a profit.


Base,

This thread was started by NAV because he does not understand what a 50% mark up is, he is trying to prove me wrong by throwing in a bunch of other issues such as profit.

A 50% mark up on $100, Is $50, that is a fact, that can not be disputed, no matter how he or anyone try to twist it.

Any kid in middle school could understand this, not sure why NAV doesn't.


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## base (Apr 16, 2008)

your right....


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## NAV (Sep 5, 2008)

My point is that when I add a markup it reflects my profit. I asked a simple question about making a 32% profit and dlcj gave me a number at 24% profit. 

Listen, i understand you guys don't like that I call what I do "markup" but that is what I am doing is called.
Websters definition of *Markup* *:* an amount added to the cost price to determine the selling price 

So technically I am correct - I am adding an amount to the cost to determine the selling price, the only exception is that I know what my profit percentage is and you guys don't know yours. so get off my back about terminology when i am right. 

All i am doing is marking up my jobs in a way that is easier to understand at the end of the day. if you guys want to keep doing it your way thats fine. If you try to keep your pricing consistant by making a certin profit on jobs you will save a lot of time doing your markups my way.


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## SLSTech (Sep 13, 2008)

NAV - I will try this using the simplest terms

Markup is multiplying your cost TIMES a % (100 x 10% = $110 //// $10 Markup)

Margin is arrived at by dividing your cost by the margin you want (10% margin = .9 so 100/.9 = 111.11)
In this example you are making 10 cents on the dollar
Try this link http://www.investopedia.com/terms/p/profitmargin.asp

Now if you want a higher margin using the markup method you have to convert the 10% MU to 11% to get your 10% margin

There is no nit picking terms in accounting, or trying to change the definitions - it is a cold fixed subject based on purely mathematical formulas & explicit terms


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## base (Apr 16, 2008)

there is an old saying that is actually a pretty good one KISS "keep it simple stupid". this is a confusing gaggle of posts.


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## A W Smith (Oct 14, 2007)

I thought I answered this a whole page ago? 

Again

http://www.allbusiness.com/glossaries/markup/4944672-1.html



> *Business Definition for: markup*
> 
> Dictionary of Accounting Terms
> markup
> ...


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## michfan (Jul 9, 2008)

:hang::hang::hang:


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## drunkn mic (Feb 24, 2009)

Wowzers!

I think that the KISS principal works best here


labor + materials + OH = X cost of doing business 

Add a dash of profit and pray you get the job


I think that perhaps the confusion is that NAV knows that inorder to get 32% profit he needs to add OH to his markup. He has found that their is a relationship between job costs and markup (OH + profit) that works. The down side NAV, if you dont show the process your numbers are just that. Its important to show the process so that you can allocate those figures to the right exp/profit categories this will help u see trends and improve them where necessary this makes your business more efficient and thus more competitive and should result in more profit

IMHO its good to start off explaining clearly and know definitions before confusion sets in :blink:


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