Restoration
Restoration Markup Calculator
Works markup on restoration work, where the figure has to survive an adjuster's review.
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.
Get a Free Business AuditHow the calculation works
Markup is measured against your cost, so a given percentage on cost produces a price and a corresponding margin that is always lower than the markup. Both are shown, because confusing them is the expensive error. In restoration the markup applies to materials and subcontracted work in a scope that an insurer reviews, which means the figure has to be both defensible and consistent rather than adjusted job to job.
What moves the number
- Whether markup applies to materials, subcontractors or both.
- What conventions the insurer works to on overhead and profit.
- Consistency across jobs, since variation invites scrutiny.
- Whether the markup covers the cost of carrying the work before payment.
Where this one goes wrong
A markup is not a margin and the difference compounds. A 50% markup is a 33.3% margin, so a business targeting a 50% margin by applying a 50% markup is a third short on every job. Both figures appear on this calculation for that reason. In restoration specifically, overhead and profit conventions on insured work are reasonably established, so a figure well outside them attracts review and delays payment, which costs more than the extra margin would have earned. Consistency across jobs is worth more than optimising any single one.
Before you quote
- Check the resulting margin, not just the markup you applied.
- Keep the markup consistent across jobs rather than varying it.
- Confirm what the markup is applied to in your estimating convention.
Questions
About this calculator
Is a 50% markup a 50% margin?
No, it is a 33.3% margin, because markup is measured against cost and margin against price. A business applying a 50% markup while believing it earns a 50% margin is a third short on every job. This is why both figures are always shown together.
Does markup on insured work get questioned?
Overhead and profit conventions on insured restoration are reasonably established, so a figure well outside them draws review and slows payment. Consistency matters more than optimising a single job, since a delayed payment on a large loss costs more than the extra points would have earned.
What should markup be applied to?
Commonly materials and subcontracted work, with labour priced at a burdened rate rather than marked up, though conventions differ. What matters is being consistent and able to explain it, since an estimate reviewed against a standard database has to be legible to the reviewer.
The formula
price = cost x (1 + markup%); margin = profit / price
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How to use this calculator
- Your cost ($). Enter your own figure; the page starts at $3,200.
- Markup on cost (%). Enter your own figure; the page starts at 45%.
The result updates as you type, so you can try a figure, see what it does to price, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Your cost | $3,200 |
| Markup on cost | 45% |
What comes out
| Result | Value |
|---|---|
| Price main result | $4,640 |
| Gross profit | $1,440 |
| Margin that gives you | 31.0% |
A 45% markup on $3,200 prices the job at $4,640, which is 31.0% margin, not 45%.
How sensitive the answer is
Holding everything else steady and changing only your cost, this is what happens to price. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Your cost ($) | Price |
|---|---|
| $1,600 | $2,320 |
| $2,400 | $3,480 |
| $3,200 example above | $4,640 |
| $4,800 | $6,960 |
| $6,400 | $9,280 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Your cost ($)
- A money amount, starting at $3,200.
- Markup on cost (%)
- A percentage, between 0 and 500, starting at 45%.
What the results tell you
| Result | What it is |
|---|---|
| Price | The headline result. A money figure. |
| Gross profit | A money figure. |
| Margin that gives you | A percentage. |
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.