To make this simple system work for you, all you have to do is to supply three critical numbers:
 Net Profit, Volume, and Overhead. Follow the steps below to determine the remainder.

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STEP 1		Determine your desired Net Profit. As owner/investor what should my return be above and beyond my salary? Think of it as a percentage of your overall Sales Dollar Volume and try not to budget for less than 10%. What return could I get elsewhere? What are my risks?	$
STEP 2		Anticipate a reasonable Sales Dollar Volume for the year. Remember, the volume is not what can be sold but what will be completed in production during the year.	$
STEP 3		Estimate reasonable Overhead Costs for the year. Overhead includes all the expenses not reported as direct job costs. It's not uncommon for overhead to run 20-35% of volume . Include your salary if you are not a direct job cost.	$
STEP 4		Review the amount of Gross Profit you will need. This amount was calculated by adding your desired Net Profit(STEP 1) and your estimated Overhead(STEP 3).	$
STEP 5		Review how much your total Job Costs should be for the year. This amount was calculated by subtracting Gross Profit(STEP 4) from your anticipated Sales Dollar Volume(STEP 2)	$
STEP 6		Review what your Markup should be. This amount was calculated by dividing Gross Profit percentage(STEP 4) by Job Costs percentage(STEP5).		%
MULTIPLIER		To figure how you should price any job, multiply your costs for the job by:
EXAMPLE		For example, for a job that costs you $1000, using this Markup, you should price that job at:

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To learn more about how you can successfully apply this Markup, be sure to read the final section, Which Markup Method is Best for You?