Menno S. Martin Contractor Ltd. in St. Jacobs, Ontario, had a profit-sharing plan for years. In 2004, when president Laverne Brubacher went into semi-retirement, he came up with a formula to scale back his salary and distribute more profits among his 17 staff members. The plan paid off for the company as well as the employees. More
The answer to this question for me is twofold: material volatility and labor/subcontractor volatility. When the price of lumber, drywall, concrete, or any other building product is fluctuating, I reduce the amount of time the contract is good for to limit my exposure and also include a material-escalation clause to protect me against major price changes and shortages caused by factors beyond my control ó such as a hurricane or the like. More