Practical Resources for Running a Better Contracting Business
Pricing work, managing labor, controlling costs, and running crews all get easier when you understand the numbers behind your business. These guides are built to give contractors practical information they can actually use in the field and in the office.
The Common Contractor is built around real-world experience running a home-service contracting business. While much of that firsthand experience comes from landscape construction and hardscape work, the business principles covered here—estimating, labor, job costing, pricing, crews, overhead and profitability—apply across the trades.
Browse the latest contractor business guides below or use our free calculators to put the numbers to work.
Latest Contractor Guides
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I Pay an Employee $20 an Hour. Here’s Why I Need to Charge at Least $60 for His Labor
What contractor labor rate should I charge if I pay an employee $20 an hour? That’s a question I’ve had to answer in my own contracting business. For my contracting business, the answer is generally at least $60 per man-hour. That does not mean I’m putting $40 an hour in my pocket. A $20 hourly…
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Service Autopilot Review: What We Actually Use After 10 Years
We’ve used Service Autopilot to help run our contracting business since 2016. Ten years later, we still use it every working day. Here’s the interesting part: we probably don’t use 95% of what Service Autopilot can do. We don’t use it for estimating. We don’t invoice through it. We don’t use it for most of…
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How Much Does Equipment Really Cost Per Hour? A 3,500-Hour Contractor Example
I bought a new 2019 Toro Dingo TX 1000 Wide Track for about $35,000. Today it has roughly 3,500 hours on it, it is completely paid off, and comparable used machines with similar age and hours appear to be worth somewhere around $15,000 to $20,000. So what has that machine actually cost my contracting business…
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How to Calculate Your True Labor Cost Per Hour: A Real Contractor Example
I used to look at an employee making $20 an hour and figure he probably really cost our company something like $23 an hour after payroll taxes and other expenses. The problem was that I had no numbers to back that up. Once I started looking closely at our actual payroll, overtime, paid time off,…
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Patriot Payroll Review: Why We Switched After 9 Years With QuickBooks Payroll
Affiliate Disclosure: This article contains affiliate links. If you sign up for Patriot Software through one of our links, The Common Contractor may earn a commission at no additional cost to you. Our opinions are based on our firsthand experience using the software. For about nine years, our contracting company used QuickBooks Payroll. And for…
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I Almost Lowered My Price on a Job That Finished at a 52% Margin
One of the easiest times to make a pricing mistake as a contractor is when you need the work. I know this because I still catch myself doing it. We recently completed a project that included two tiered retaining walls, sod, river stone, mulch and flagstone stepping stones. The total contract price was $16,835. When…
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We Budgeted 90 Labor Hours. The Job Took 104. Here’s What Happened to the Profit.
One of the easiest mistakes to make in a contracting business is looking at the money left over after a job and deciding whether the job was simply “good” or “bad.” A profitable job can still expose problems in your estimate. And a job that goes over budget in one category can still outperform your…
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What Does a $25/Hour Employee Really Cost an Employer?
Understanding the $25/hour employee cost starts with the employee’s base wage, but the true cost to an employer is considerably higher. If the employee works 40 hours, the obvious calculation is: $25 × 40 hours = $1,000 per week But that $1,000 paycheck is not the full cost of having that employee on your crew.…
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How to Calculate Labor Burden for Construction Employees
Paying an employee $25 per hour does not mean that employee costs your construction business $25 per hour. The real cost of an employee can be significantly higher once you account for employer payroll taxes, workers’ compensation insurance, paid time off, benefits, overtime, and other employee-related expenses. That difference is commonly called labor burden. Understanding…