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Our belief is that this “industry standard” of cost plus 10% was created by insurance companies to control the amount paid on claims. The idea that a contractor can survive at a low markup defies the mathematics of basic business and common sense. If you have read our book Markup and Profit A Contractor’s Guide, you know that few contractors can operate a business and breakeven at cost plus 10%, let alone make a profit. There never has been and there never will be. Let’s be clear here, there is no such industry standard. ![]() The claim is usually that the “construction industry standard” is Cost plus 10%. ![]() We often hear of home or building owners claiming that contractors overcharged them for work being done on fixed figure (lump sum) contracts.
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