Replies

1. 
   Dan Kolbert | Sep 17, 2010 07:15pm | #1

   "Average profit markup" is a relatively meaningless term - everyone calculates what profit and overhead is somewhat differently. For instance - is my workers compensation policy a hard labor cost or overhead?

   And why do you ask? Do you ask your mechanic that question? Do you ask what Ford's profit is when you buy a car? Not being pugnacious, but curious why you want to know.

2. 
   Riversong | Sep 17, 2010 08:31pm | #2

   Too much and too costly.

   Entrepreneurial profit is, technically, the excess income accrued to a person from the labor of others soley due to an ownership position. In other words, profit in the purest sense is unearned income. And anything unearned, or accrued merely from a position of economic privilege, is a form of theft from the commons or from the labor of others less fortunate (but likely more skilled).

   Business overhead is something entirely different, and each business is organized differently, has different fixed and variable costs, and re-invests income in different proportions. So there is no standard, and a mathematical average would be meaningless, since averages are skewed by the extremes (and there are far too many extremes in this business - at both ends).

   A business owner, who is also a laborer in the business, deserves a reasonable wage as well as enough income to cover all overhead with perhaps some additional to invest back into the venture (though his workers must use their wages to re-invest in tools). That additional is often referred to as "profit". But, if it's re-invested, then it's actually a capital expense which reduces net income.

   There are three types of true profit:
   1) unearned income accrued from the privilege of business ownership
   2) interest and dividends from financial investment (another privilege of wealth, which contributes nothing of value to society but creates constant inflation and cyclical recessions)
   3) the unearned economic appreciation of real property, typically due either to social investments or to speculative pressures (neither of which are created by the "owner")

   In all cases, profit is unearned by one's own efforts and hence illegitimate and immoral - particularly profit on land and other natural resources which was granted by the Creator of the Universe for our use and stewardship, but which can never be rightfully owned, exploited or sold.

   LAND, n. : A part of the earth's surface, considered as property. The theory that land is property subject to private ownership and control is the foundation of modern society. Carried to its logical conclusion, it means that some have the right to prevent others from living.
   - The Devil's Dictionary, 1911

   [see also, Leviticus, Chief Seattle, John Locke, Thomas Paine, Thomas Jefferson, Henry George]

3. 
   user-659915 | Sep 17, 2010 09:45pm | #3

   In my area a reputable full-service remodeling contractor generally charges 20 - 25% markup, sometimes more. Some will calculate it differently, quoting a lower markup percentage but adding a fixed management fee. I doubt a business's operating costs and liabilities in NYC are any lower than they are here in North Carolina.