Why pricing general contracting jobs is its own problem
A GC's price is mostly other people's numbers: subs, suppliers, and a schedule you only partly control. The trap is treating your fee as a flat percentage and forgetting that supervision, coordination, and schedule risk are real costs that grow with job complexity, not with job size. Two jobs of the same dollar value can carry wildly different management load.
The fix isn't a magic number — it's pricing from your real, burdened costs and the cost drivers specific to GC work. Below: the fundamentals applied to general contracting, the cost drivers to build into every quote, a worked example, and the mistakes that quietly turn good jobs into breakeven ones.
Start with the fundamentals
A GC's margin lives in the gap between what subs cost you and what you charge, and in funding the supervision that flat-percentage fees forget. Mark subbed work up enough to cover the risk you carry on it, and treat your project-management hours as a real, burdened cost. For the full breakdown of the two numbers that protect every contractor's margin, see our markup vs margin guide and labor burden guide — and run the markup ↔ margin calculator for your own numbers.
The cost drivers specific to general contracting work
These are the line items that separate a real general contractor's quote from a guess. Build each one into your price:
Subcontractor pricing (and the markup on it)
You carry the risk if a sub is wrong, slow, or walks. Mark up subbed work enough to cover that exposure and your coordination — a pass-through at cost means you're managing for free.
Supervision and project management
Your time (or a PM's) running the job is overhead that has to live in the price. On a complex remodel it can be 10–15% of the job by itself.
Permits, fees, and schedule float
Permit timelines, inspections, and weather create gaps where the job sits but your overhead doesn't. Build float into the schedule and the price.
General conditions
Dumpsters, portable toilets, temporary power, protection, cleanup — the line items that don't belong to any one sub and quietly get left out.
A worked example
Say a job carries $80,000 in hard costs (subs + materials). At a 'standard' 15% markup you'd charge $92,000 — but that's only a 13% margin, and it hasn't separately funded your PM time. If this job needs 120 hours of supervision at a $55 burdened cost ($6,600), price from a margin target instead: to keep 22% after the $80,000 cost plus $6,600 of supervision, you'd bill around $111,000, not $92,000.
Numbers here are illustrative to show the method — your real costs, local market, and rates differ. Price from your own books.
Common general contracting pricing mistakes
- Passing subcontractor costs through at or near cost — you're insuring their work for free.
- Quoting a flat fee percentage regardless of how management-heavy the job is.
- Leaving general conditions (dumpsters, protection, cleanup) out of the estimate, then eating them.
- No contingency line for the unknowns that every multi-trade job produces.
Stop pricing from memory
The Contractor Authority System™ turns this into a repeatable process — a profit-control engine with burdened labor and overhead, change-order protection, and client-ready proposals. One-time $97.
FAQ
On fixed-price work you usually present one number, not your internal markup. On cost-plus you disclose a fee — just make sure that fee actually covers supervision and risk, not only profit.
It varies a lot by market and job type, so treat any benchmark as a starting point and price from your own burdened costs. The point isn't a magic percentage — it's that supervision and risk are funded, not absorbed.