Asphalt contractor Maximum Affordable Discount
Maximum discount = (1 − cost / ((1 − margin) × current price)) × 100
Gather a completed job sheet, supplier quotes and a crew schedule. Include material delivery, equipment, and preparation. The starting figures are examples. Replace them with your own records.
Formula and worked example
Maximum discount = (1 − cost / ((1 − margin) × current price)) × 100
| Input | Example |
|---|---|
| Current price | 1,000 |
| All assigned cost | 650 |
| Minimum retained margin | 20 % |
| Calculated result | 18.75 % |
Choose reliable inputs
Plan materials, travel and crew time before committing to a price. For this asphalt contractor calculation, use a completed job sheet, supplier quotes and a crew schedule and a consistent definition of one paving job.
- Material delivery: include the portion belonging to this paving job or reporting period, and record where the value came from.
- Equipment: include the portion belonging to this paving job or reporting period, and record where the value came from.
- Preparation: include the portion belonging to this paving job or reporting period, and record where the value came from.
Use the same currency for every money input. Do not mix weekly costs with monthly revenue, or count the same expense in both an itemised cost and allocated overhead.
Can a profitable job still fail my margin target?
Positive profit and the desired percentage margin are different tests. The margin denominator is revenue.
A negative answer means the current price already fails the target margin.
What if this input changes?
If current price rises by 10%, this example changes by 7.3864 %. This shows the effect of one change; it does not predict what will happen.
Open the calculator, save your baseline, then change the input supported by the least reliable estimate in your records. Compare both scenarios before committing to a price or capacity promise.