From Our Choosing the Right Home Remodeling Professional (Series)
Our recent blogs have focused on topics that will help you choose the right home remodeling professional for your renovation project. We’ve covered misconceptions and things to watch out for when hiring your contractor. In this blog, we are talking about expectations of the cost of your project and how your contractor gets to his estimate. Knowing this information, will help you feel more confident and create trust between you and your contractor.
Each project is different, however, there are always going to be costs that go beyond labor and materials. Your contractor should break down an estimate and how they reach it, where possible. This adds an element of transparency that you want to see.
In addition to the actual labor, materials, and Sub Contractor prices there are many other expenses every successful contractor must figure into their price to survive.
Cost of Your Project
The following is a list of some of the key elements that make up overhead in every successfully managed remodeling company:
Telephone, cell phones
Office rent
Office supplies
Stationery and printing expenses
Website, hosting, and Internet
Worker’s Compensation & Liability insurance
Health insurance
Paid vacations, holidays
Staff meetings
Payroll expenses
Office administration and management
Time doing free estimates
Material price increases that may not be billable once a job is quoted
Estimating errors and omissions
Warranty repairs
Tools and equipment
Trucks, repairs & maintenance, fuel
Continuing education, training, and industry events
Computers and software
Business loans and interest
Accountant’s fees
Taxes
Production supervision and management
Advertising, marketing, and sales costs
This all adds up to a substantial amount of money. To cover his overhead, a contractor typically must add a percentage to the actual cost of labor and materials required to complete your project. Most professional contractors try to maintain a 7.5% – 20% profit when all is said and done. Without a profit, the contractor will eventually go out of business.
If you receive a price from a contractor that seems too high, they are very likely trying to pay for the very things that allow him to survive and provide a good, reliable service to you and a good environment for his employees.
Do beware of the contractor that tells you his prices are low because he keeps his overhead down. Chances are that could affect the quality of your project.
FREE CONSUMER AWARENESS GUIDE
Learn more about how to choose the right home remodeling professional with our consumer awareness guide. Our guide, “10 Things You Must Know Before Hiring a Remodeling Contractor” will help you know what to look for when finding the right contractor so that you can be completely satisfied with your remodeling project. This booklet was written so that you will be empowered to make the best decision for your home improvement and remodel. You can have the experience you desire for your home improvement project with the right contractor for you by requesting this free e-Book here.
Home Remodeling in the Greater Phoenix Area
Begin your project by calling us at (602) 478-5102 or emailing Steve here to discuss remodeling your home, kitchen, or bathroom. We offer no-obligation in-home consultations. Our award-winning designers and craftsman are eager to work with you to help you love your home again!