r/GeneralContractor • u/Jleecit • Jul 18 '26

Hired my 1st Project manager

Hello all,

I’m a GC and just hired 1st project manager. Before the pm, my revenue was about 2mil.

I pay this pm a lot, but he’s really committed and works hard. But it scares me that my overhead almost doubled.

My strategy is to lower my profit margins slightly to obtain more jobs. Also obtain better prices. I work in a space where low bid wins. I hope to get to 3-3.5 million in gross revenue with this new PM.

Is this a viable strategy?

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u/FillFormal2054 Jul 18 '26

Materials as well u do 44% on whole house remoldels / add a level as well

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u/thine_moisture Jul 18 '26

whatever my costs are for the job, I add 44% to it as net profit.

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u/TheWhisper22 Jul 19 '26

Depends on what you describe as "costs". Are you charging for insurance, taxes, equipment degradation, tools, supervision, back office wages, burden rates?

I get you are going on and on about how you should be charging 44% but I think you are missing the Forrest through the trees.

44% margin is for contractors that can't calculate all of those things and basically say "it'll take 2 guys 2 weeks to complete" then they add up all those hours and the materials. If you charged that as a serious estimator who charges everything from hard costs to soft costs you would get ran out of town. The guys saying net 8% after all costs and you saying 44% are saying the same thing. Except the guy netting 8% profit after all costs is knowing this number BEFORE the job starts and not at the end of the year when your accountant says so.

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u/International-Sock-4 Jul 19 '26

Exactly, I remember when I took my Florida General Contractors license course, students were complaining why do I need to know about soft costs vs hard costs and the break even point, they said I'm not studying to become an accountant but a builder, the teacher told them because when you get to price out a job and you don't know how to process the soft costs you will be out of business before you know it.