It depends on many things like overhead, project size ect. Many of the major primes do along the lines of 60% to the sub 40% to the prime and of that 40%, 28% will go to office/warehouse space, utilities, Insurance, workers comp, management pay and other expenses. leaving around 12% for investors and business development provided that they get paid by the MSO and there are no issues with the project such as property damage, shortage of materials or other losses caused by employees and sub contractors.
Many of the contract companies over the past several years have gone under because of paying subs and then not getting paid by the MSO's Like Adelphia's bankrupt issue or late pay for 90 days or more. This is why you see allot of contracts going to a you get paid when I get paid.
In any business model you want to make 17% to 25% profit for business growth and development to become a bigger and better company and to pay your investors. In the cable industry this is getting harder and harder to do with the MSO's driving the prices down causing every one to operate on a shoe string.
For In-House most primes pay something like 40% to the employee and 60% to the company to cover additional cost like trucks, tools, equipment, insurance, ect. and I expect this to go down with the rising fuel cost. The cost of doing business keeps going up and other business's increase there cost to there customer but in the cable industry that is not the case the MSO's are saying here is the price take it or leave it.
Allot of companies take it to keep working but then get in a bind the first time an issue comes up.
Re: Profit
Member #: 29777
Registered: 3/28/2004
Posted:
307
Name:
DJ
Company:
Multi Cable Inc
Occupation:
Operations Manager
Location:
California
Personal:
Experience:
~40 years
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