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436: Markup vs. Margin: How to Price Roofing Jobs for Profit (with Michael Stone)
Description
Summary / Intro
Most roofing contractors think they’re making money — until they look at the numbers.
In this episode, I sit down with Michael Stone, one of the most respected voices in construction financial education, to break down one of the most misunderstood topics in roofing: markup vs. margin. We explain why confusing the two destroys profit, how contractors accidentally underprice jobs, and what it really takes to price work correctly.
If you want consistent profit instead of riding the gross profit roller coaster, this episode is required listening.
Show Notes
Pricing mistakes are one of the biggest reasons roofing contractors struggle — even when sales are strong.
In this episode, Dave Sullivan talks with Michael Stone about the financial fundamentals every roofing contractor must understand to stay profitable. The conversation centers on the critical difference between markup and margin, and why confusing these two concepts leads to chronic underpricing and cash flow problems.
Michael explains how overhead, job costing, and pricing discipline all work together — and why “industry averages” are dangerous if you don’t know your own numbers. Dave and Michael also discuss warning signs contractors miss, how profit fade happens over time, and why many businesses look busy on the outside but are bleeding internally.
This episode is about clarity. When contractors understand their numbers, they gain control — and control leads to profit, stability, and freedom.
Takeaways
- Markup and margin are not the same — confusing them kills profit
- Accurate job costing is essential for pricing correctly
- Overhead must be included in every pricing decision
- Gross profit should be consistent, not a guessing game
- Cash flow problems often start with pricing errors
- Knowing your numbers gives you control and confidence
Chapters
00:00 – Introduction to The Roofer Show
05:37 – Why Contractors Fail Financially
12:37 – Understanding Markup vs. Margin
18:33 – Overhead and True Job Costs
30:22 – Accounting Red Flags and Embezzlement
36:35 – Gross Profit Margins Explained
45:51 – Job Costing and Financial Discipline
55:22 – Coaching, Mentorship, and Accountability
Links Referenced in This Episode
Companies Mentioned
Ruby Receptionists
SMA Support
Proline
Markup & Profit
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