Chimney & fireplace
Chimney Margin Calculator
Work out the gross margin on a chimney job from the price and what it cost you to deliver.
Result
Markup is measured against your cost, margin against the price you charge. A 50% markup is a 33.3% margin, not a 50% one. Pricing off the wrong one is the most common way a job that looked profitable turns out not to have been. Gross profit is what is left after the cost of doing the job. Overhead comes out of that: the building, the office wages, the vans, insurance, software and advertising. A healthy gross margin still loses money if overhead is larger.
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About this calculator
What is a healthy gross margin?
It depends on how much overhead it has to carry. A company with low overhead survives on less. The number that matters is whether gross profit exceeds overhead with something left over, not a figure from an industry table.
Should sales tax be in the price here?
No. Tax is collected on behalf of the state and passed straight on, so including it inflates both the price and the apparent margin.
Why is my margin fine but my bank balance is not?
Gross margin is before overhead. If overhead is 35% of revenue and gross margin is 30%, every job is profitable and the company still loses money.
The formula
margin = (price - cost) / price; markup = (price - cost) / cost
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Estimating is the easy part
The jobs you never hear about cost more than the ones you mis-measure. BDEVY builds the marketing, systems and automation that bring them in.