Bid Markups Best Practices

I often get asked what's the best way to use Bid Markups. My best practice recommendation is to use Item Types markups for your Overhead percentage, then use the Overall Markups for your profit. Example: A bid of $10,000 is first marked up in Item Types by 10% giving a subtotal bid of $11,000. Then using an overall markup of 20% I get a total of $13,200. My total markup dollars in this example are $3,200.

If I only combined the 10 & 20% into 30% in the overall markups, my total would only be $3,000 markup dollars for a total bid of $13,000.

With this suggested method, you end up adding profit dollars on top of your overhead calculation, which insures the best bottom line for you.