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Thread: What type of margin?

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    Uber Star Soi wanderer Thai Dreamer ผู้เพ้อฝัน MarcTwoSix's Avatar
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    What type of margin?

    This is not my expertise and I know a lot of BM's might have a bit more understanding of this type of work.

    As I mentioned in another thread my wife has gotten a job with a guy who owns 6 hotels in Bangkok.
    They are similar to Holiday Inn Express hotels.

    He wants to super-impose the hotel logo on the facade of the hotel in lights.

    Ao went and sourced the lighting and they will actually be doing all the labor also.
    So basically she is acting as a middle man on this project.

    So it's 45kbaht per light and it will be 2 lights per hotel.
    So what type of margin should she be making per light?

    Basically anything she charges over the 45k per is profit.

    Work/installation time is 2hours.

    I said 15k per light but again not my field.

    Thanks for any advice

  2. #2
    เมืองเชียงราย Thai Dreamer ผู้เพ้อฝัน Rivo's Avatar
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    Not my area either M26...........the company I work for usually has a standard % profit they like to have, there are always exceptions though. The 15K mark up you suggest is reasonable IMO, especially if AO has little work to do herself
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    Uber Star Soi wanderer Thai Dreamer ผู้เพ้อฝัน Moo Uaon's Avatar
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    different mark ups for different things but around 30% seems to be acceptable on big ticket stuff like that.
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    Foundation Member Thai Dreamer ผู้เพ้อฝัน Sydney's Avatar
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    I would have thought 30% as well ... but this could be way to much for LOS ....

    AO i am sure will be looking at it as, 15K and only 2 hours work WTF TO MUTT !! ..5555 or maybe she is more the deal make than we think


    Another consideration in not the 2 hours, but how long for all 12 lights over the 6 hotels ? ... travel ? any hidden issue with installation ie Height or fixing material ? ... has she viewed all 6 locations ?
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    Liberal Conservative Distantpeak's Avatar
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    Is she responsible for their maintenance as well?
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    Uber Star Soi wanderer Thai Dreamer ผู้เพ้อฝัน MarcTwoSix's Avatar
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    Quote Originally Posted by Sydney View Post
    I would have thought 30% as well ... but this could be way to much for LOS ....

    AO i am sure will be looking at it as, 15K and only 2 hours work WTF TO MUTT !! ..5555 or maybe she is more the deal make than we think


    Another consideration in not the 2 hours, but how long for all 12 lights over the 6 hotels ? ... travel ? any hidden issue with installation ie Height or fixing material ? ... has she viewed all 6 locations ?
    She was thinking 10k but I said 15k seems a better margin for the work.

    And believe me, she is a deal maker! 555.....her business is getting into these type of money levels so she's not shocked by any of this now.

    The job she is doing now is 300k baht(50 trucks at 6k per)
    But will take about 6 weeks. After paying her brothers she will walk away with over 150k profit.

    And she has turned down bigger jobs because she didn't think her company was ready yet.

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    Uber Star Soi wanderer Thai Dreamer ผู้เพ้อฝัน Moo Uaon's Avatar
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    Quote Originally Posted by Sydney View Post
    I would have thought 30% as well ... but this could be way to much for LOS ....

    AO i am sure will be looking at it as, 15K and only 2 hours work WTF TO MUTT !! ..5555 or maybe she is more the deal make than we think


    Another consideration in not the 2 hours, but how long for all 12 lights over the 6 hotels ? ... travel ? any hidden issue with installation ie Height or fixing material ? ... has she viewed all 6 locations ?
    Bet ya bottom baht someone would do it cheaper but being pleasant and reliable could make a difference.

    Soooo...+ 30% would be 58,500? not much use rounding it up in case you get asked.
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    Foundation Member Thai Dreamer ผู้เพ้อฝัน Sydney's Avatar
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    Quote Originally Posted by MarcTwoSix View Post
    She was thinking 10k but I said 15k seems a better margin for the work.

    And believe me, she is a deal maker! 555.....her business is getting into these type of money levels so she's not shocked by any of this now.

    The job she is doing now is 300k baht(50 trucks at 6k per)
    But will take about 6 weeks. After paying her brothers she will walk away with over 150k profit.

    And she has turned down bigger jobs because she didn't think her company was ready yet.
    Its awesome, sounds like she is doing well .... although having being in business for 30 years i am always a little cautious when i hear figures thrown around ... and the bigger the figure the more cautious i get ..555

    But i have made mistakes in the past ( and probably will continue too ), the larger jobs always hurt more if there is a mistake ...

    Tell her, never count profit until the job is complete ... having this mindset can make you more cautious

    Not saying she will make mistakes however

    I can see one flaw in her business however .... brothers ...55555, obviously in Thailand the old adage, never mix business with family or friends doesn't stand
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    Uber Star Soi wanderer Thai Dreamer ผู้เพ้อฝัน MarcTwoSix's Avatar
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    Quote Originally Posted by Moo Uaon View Post
    Bet ya bottom baht someone would do it cheaper but being pleasant and reliable could make a difference.

    Soooo...+ 30% would be 58,500? not much use rounding it up in case you get asked.
    She's getting jobs because of the work she does
    She's very thorough and her brothers are terrified of her(for real, they are 555)...so they do a very good job and are very reliable.

    Ao really makes sure everything is done exactly how they want it and in the time frame needed. A lot of times they are working through the night....getting home 5-6am

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    Uber Star Soi wanderer Thai Dreamer ผู้เพ้อฝัน MarcTwoSix's Avatar
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    Quote Originally Posted by Sydney View Post
    Its awesome, sounds like she is doing well .... although having being in business for 30 years i am always a little cautious when i hear figures thrown around ... and the bigger the figure the more cautious i get ..555

    But i have made mistakes in the past ( and probably will continue too ), the larger jobs always hurt more if there is a mistake ...

    Tell her, never count profit until the job is complete ... having this mindset can make you more cautious

    Not saying she will make mistakes however

    I can see one flaw in her business however .... brothers ...55555, obviously in Thailand the old adage, never mix business with family or friends doesn't stand
    Her brothers are very good employees.....always have been with the other companies they worked for.
    And, as I said, they are terrified of her.....so they do the jobs the right way

    Plus.....I think they all feel it might end up a decent family business so there is a pride in it for them.
    The brothers wouldn't be a concern for me.....if it were my business.
    But as you said....family can complicate things.

    And she is as cautious as they come.....not just business. It's her nature.
    Declining the bigger jobs for now....even though they were big money shows her caution. She knew they weren't ready and would ruin the good word they been getting.
    They will get there.....in time

    And finally.....mistakes will be made. Nothing goes perfect. I'm sure there are many business owners on here that know that better than I do
    Just learn from them and hope they aren't too bad

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    Foundation Member Thai Dreamer ผู้เพ้อฝัน Sydney's Avatar
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    Yeah declining the bigger jobs shows great business maturity for sure ..

    How about the brothers in a years time if she is raking in the money ? .... do families share in business in LOS ? ... i guess some do
    The only thing that will stop you from fulfilling your dreams is you.

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    ประเทศไทยเพื่อน Founding Member Thai Dreamer ผู้เพ้อฝัน Changone's Avatar
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    .....mistakes will be made. Nothing goes perfect. I'm sure there are many business owners on here that know that better than I do
    Just learn from them and hope they aren't too bad

    Most people start a business and then try to wrap a plan around the outcome....555

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    Uber Star Soi wanderer Thai Dreamer ผู้เพ้อฝัน MarcTwoSix's Avatar
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    Quote Originally Posted by Sydney View Post
    Yeah declining the bigger jobs shows great business maturity for sure ..

    How about the brothers in a years time if she is raking in the money ? .... do families share in business in LOS ? ... i guess some do
    Actually her brothers, at the moment, declined to be cut into the business.
    They prefer being paid more per day than they were at their companies but don't want the responsibility so happy to be just her workers.

    They do get cheeky and ask that she buy them 1 big Leo each after every job 555

    By the way....we were talking about MB taxi mobs and how much you have to pay them to ride a MB on their turf and get the vest

    Come to find out.....my MIL bought 2 MB taxi vests years ago!

    So they have a good deal driving MB taxi on her vests and working for Ao when she needs them.
    It's ideal because she gets busy then slow so she couldn't afford to have full time employees right away.
    So works for all

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    Uber Star Soi wanderer Thai Dreamer ผู้เพ้อฝัน MarcTwoSix's Avatar
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    Quote Originally Posted by Changone View Post
    [COLOR=#333333]


    Most people start a business and then try to wrap a plan around the outcome....555
    I'm sure in your line of work you get a good perspective of all types of businesses and what works or doesn't.
    Do you think what works is transferrable over many fields or unique to each field?

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    Uber Star Soi wanderer Thai Dreamer ผู้เพ้อฝัน RakThai's Avatar
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    To set a margin, the question should be what this margin should cover?

    Who is responsible if the bill doesn't get payed? who covers any damage caused by the workers (like one of the lamps breaks)? What if the customer is not happy with the result? What if a worker falls of a ladder and cannot work for months?

    I work with contracts that mention debit risk, malpractice risk, incident and accident risk and each of these add to the margin I pay (or on occasion get).

    If all these risks are with another party, I call it commission, only profit with no risk. 10% for that is reasonable if little work involved.
    But I think your wife carries more of the risk.. So adding 10% for debit risk (lower or zero when the project is paid upfront) and risks for damage and worker responsibility (which are quite high in construction) is necessary for a successful long time business!
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    ประเทศไทยเพื่อน Founding Member Thai Dreamer ผู้เพ้อฝัน justcruzing1's Avatar
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    Great to hear she has a developing business,

    My take on the margin, here we build an entire house, 12 months maintenance and 25 years structural gtee.
    Gross Margin of 22-26%

    I have had businesses where I was able to get 50% markup as i had the best product.

    My business attitude is take a little less margin, set the deal that invoice is paid in 14 days, pay everyone on time and share the winnings a little to each person, so yes you are making less but you have loyal staff and they will look out for your business.

    Your client will give you referrals and it just snowballs.

    My mentor, also financier of my businesses previously, he had the attitude in business that if a $1 was made all staff got 5c , 5c 10c and then he kept the 50c.

    Made him into a mega millionaire.
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    Uber Star Soi wanderer Thai Dreamer ผู้เพ้อฝัน MarcTwoSix's Avatar
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    Quote Originally Posted by justcruzing1 View Post
    Great to hear she has a developing business,

    My take on the margin, here we build an entire house, 12 months maintenance and 25 years structural gtee.
    Gross Margin of 22-26%

    I have had businesses where I was able to get 50% markup as i had the best product.

    My business attitude is take a little less margin, set the deal that invoice is paid in 14 days, pay everyone on time and share the winnings a little to each person, so yes you are making less but you have loyal staff and they will look out for your business.

    Your client will give you referrals and it just snowballs.

    My mentor, also financier of my businesses previously, he had the attitude in business that if a $1 was made all staff got 5c , 5c 10c and then he kept the 50c.

    Made him into a mega millionaire.
    She's been smart to know when to do a job for small money because it is a job she can market her company with
    The per hour she got paid for to do the whole Marvel store in Bangkok was nothing but the pictures she got from it were invaluable

    She almost got a job to do 100 MB's at Kawasaki, the money would have been pretty small but they needed a bigger crew than she could provide but she knew to do the job for a small margin

  18. #18
    ประเทศไทยเพื่อน Founding Member Thai Dreamer ผู้เพ้อฝัน Changone's Avatar
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    Quote Originally Posted by MarcTwoSix View Post
    I'm sure in your line of work you get a good perspective of all types of businesses and what works or doesn't.
    Do you think what works is transferrable over many fields or unique to each field?
    Usually there are too many variables to stick to one exact formula.
    For example, Family considerations often overtake business principles unless you separate the two.

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    ประเทศไทยเพื่อน Founding Member Thai Dreamer ผู้เพ้อฝัน Changone's Avatar
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    Quote Originally Posted by RakThai View Post
    To set a margin, the question should be what this margin should cover?

    Who is responsible if the bill doesn't get payed? who covers any damage caused by the workers (like one of the lamps breaks)? What if the customer is not happy with the result? What if a worker falls of a ladder and cannot work for months?

    I work with contracts that mention debit risk, malpractice risk, incident and accident risk and each of these add to the margin I pay (or on occasion get).

    If all these risks are with another party, I call it commission, only profit with no risk. 10% for that is reasonable if little work involved.
    But I think your wife carries more of the risk.. So adding 10% for debit risk (lower or zero when the project is paid upfront) and risks for damage and worker responsibility (which are quite high in construction) is necessary for a successful long time business!
    You make some good points Rak.
    People often confuse "Markup" with "Profit", and that profit=money left over at the end of each day.
    My mark up wouldn't be exactly the same as say K-mart, but then neither would my turnover.

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    Uber Star Soi wanderer Thai Dreamer ผู้เพ้อฝัน MarcTwoSix's Avatar
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    Quote Originally Posted by RakThai View Post
    To set a margin, the question should be what this margin should cover?

    Who is responsible if the bill doesn't get payed? who covers any damage caused by the workers (like one of the lamps breaks)? What if the customer is not happy with the result? What if a worker falls of a ladder and cannot work for months?

    I work with contracts that mention debit risk, malpractice risk, incident and accident risk and each of these add to the margin I pay (or on occasion get).

    If all these risks are with another party, I call it commission, only profit with no risk. 10% for that is reasonable if little work involved.
    But I think your wife carries more of the risk.. So adding 10% for debit risk (lower or zero when the project is paid upfront) and risks for damage and worker responsibility (which are quite high in construction) is necessary for a successful long time business!
    Well , we are talking about a small business in Thailand.......so there just isn't all those type of risk/accident concerns, for good or bad.

    Her business started out as installing awnings for businesses........and the owners of those businesses were pretty diligent in them needing the proper equipment and safety tools. When she was back in Canada, her brothers showed up for a job in flip-flops and the business owner turned them away.

    And the jobs she turned down have been for installing those huge billboards you see near BKK Airport..........they didn't have the know how and most importantly, she didn't have the safety equipment needed.
    She's been talking to some big companies.........so I assume when she eventually does work for them, she may need some sorts of insurance.........this is all evolving.
    Some of these big jobs she is doing now will give her capital to invest in some of the equipment she needs
    So we will see what happens

    A lot of her jobs have been just applying signage decals......so obviously not safety issues there

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