Contractor knowledge
Contractor Knowledge Hub
How contractor money actually works, written so you can act on it. Every article answers one question, shows the formula, works a real example and hands you the calculator that does it for you.
Financial fundamentals
The vocabulary the rest of the money questions are built on: what cost is, what price is, and why profit is neither of them.
Construction Pricing: Cost vs Price vs Profit
Understand the difference between cost, price and profit before pricing construction work.
Contractor Break-Even: What Your Business Must Earn
Calculate the revenue a contracting business must earn to cover overhead.
Cash Flow vs Profit for Contractors
Understand the difference between cash flow and profit in a contracting business.
What Is Cost per Productive Hour?
Understand and calculate the cost of one productive field hour.
Why High Revenue Does Not Mean High Profit
Understand why growing revenue does not automatically grow contractor profit.
Labor and overhead
What an hour of work actually costs your company, and how the costs that are not attached to any single job get recovered.
How to Calculate Labor Burden in Construction
Calculate the true hourly employer cost of an employee, including burden.
How to Calculate Construction Overhead
Total construction overhead and convert it into a recoverable rate.
Billable Hours vs Productive Hours
Decide which hour count to use when calculating labor rates and overhead recovery.
The Real Cost of an Owner Working in the Field
Decide how to cost an owner's own labor hours on a construction job.
How to Calculate the True Cost of Owned Equipment
Calculate an hourly cost rate for construction equipment you own.
Employee Labor vs Subcontractors: Comparing the Real Cost
Compare the true cost of employee labor versus subcontracted labor.
Pricing and margin
Turning a cost into a price on purpose: markup, margin, target margin and the rate you charge per hour.
Markup vs Margin for Contractors
Understand and convert between markup and margin when pricing a job.
How to Calculate Your Contractor Hourly Rate
Work out what to charge per hour as a contractor.
How Discounts Affect Contractor Profit
Understand what a discount does to the profit and margin of a construction job.
How to Think About Target Margin by Type of Work
Decide what target margin different types of construction work should carry.
How to Price Change Orders Without Losing Profit
Price a construction change order so it does not reduce the job's profit.
How to Estimate Concrete Cost: Yards, Waste, Job Cost and Price
Estimate the cost and selling price of a concrete job from quantity, contractor-entered prices and job costs.
Job costing and profitability
What a job really costs, what it really made, and where the gap between the estimate and the actual came from.
What Is True Job Cost?
Know which costs belong in a construction job cost and how to total them.
How to Calculate Job Profit
Calculate the profit a completed construction job actually made.
Estimate vs Actual: How Contractors Find Profit Leaks
Compare estimated versus actual job cost and interpret the variance.
Committed Costs and Cost-to-Complete During a Job
Track committed costs and forecast cost-to-complete while a job is running.
How to Close Out a Job and Measure the Final Result
Close out a construction job correctly and measure its final profit.
How Rework and Warranty Costs Affect Job Profit
Understand how rework and warranty callbacks reduce construction job profit.
How to use the hub
The articles are ordered the way the numbers depend on each other. What an hour of labor costs feeds the overhead you have to recover; overhead feeds the hourly rate you charge; the rate and the cost classes feed a job cost; the job cost and the contract price decide the profit; and comparing that profit back to the estimate tells you what to change next time. You can start anywhere, but the chain is the point.
Where the numbers come from
Every worked example on this site is produced by the same calculation engines RHACOVA uses internally, with exact decimal arithmetic. An example cannot quietly disagree with the calculator it links to, and the definitions behind them are written down in the RHACOVA methodology.
We do not publish industry benchmarks, survey statistics or averages we cannot stand behind. Where a claim would need outside evidence we do not have, the article says so instead of inventing a source.