What is the potential markup range for self-performing work?

The potential markup range for self-performing work is generally understood to be between 10-20%. This range reflects the various factors that contribute to the cost of self-performing work. When a construction company decides to carry out work directly rather than subcontracting it, they need to factor in not only direct labor and material costs but also indirect overhead costs and profit margins.

Self-performing work often incurs additional expenses such as equipment maintenance, labor benefits, and insurance that may not be as significant when the work is outsourced. As a result, companies typically apply a markup that adequately compensates for these expenses while also ensuring a reasonable profit. A markup in the 10-20% range allows companies to maintain competitiveness in the bidding process while covering costs associated with self-performance.

This markup is crucial for managing risks and ensuring that the project remains financially viable. It also supports the company's ability to make investments in tools, training, and workforce development that enhance productivity and quality. Hence, the chosen markup range reflects both the cost realities of self-performing work and the strategic objectives of construction firms.