Cost Effective Pricing for Builders


Construction Costs & Techniques for accurate and cost effective pricing

Having been in the construction business for well over 45 years, the most elusive and difficult question from homeowners is the anticipated cost of a construction service or product. There are so many variables that cause costs to fluctuate that it is extremely difficult to identify the real costs of construction activity within your home.

Presented below are some very simple rules and directives that will assist you in attempting to anticipate the costs of construction projects, services and products.

  1. The common Google Search will result in ranges of anticipated costs. In most cases, unless a website is customized to your area of the country, the competition level of the service or product you are researching, and takes into consideration the scheduling of the work as well as the working hours allowed, you will only obtain a very general and overall generic type of cost estimation.
  2. Recommendations from friends and family are probably the most reliable means of identifying some true costs. Select a contractor or a supplier that someone you know has used in the very recent past. In this manner you have a first hand knowledge of the type of service and the quality of the product you are interested in. There is a common stumbling block to always seeking a recommendation. Most people that recommend would not offer any honest criticism of their recommendation and if they have not competitively priced the service or product and merely always went to the same contractor or supplier, your pricing may not be the most competitive in the industry.
  3. Simple old fashion research is your best method of anticipating the real value of your work, or the product you are buying. Take the time to visit showrooms, compare costs and competitively identify all of the aspects of the item that you are pricing. Go to the big box stores as well as the local hardware stores and communicate and compare.
  4. Be careful of that person who confidently informs you that this certain subcontractor or supplier is the only way to go. Remember that this recommendation is probably supported by an overly aggressive individual that may or maynot have ever compared values, one against another. In addition, anyone that is focused on one way of solving a construction issue is somewhat reluctant to admit that they have probably not always involved a competitive and intelligent buying strategy when completing their own projects.
  5. Understand that the cost of anything in construction, whether it be a service, a product, a piece of equipment, etc. is constantly changing. A roofer may provide a very reasonable per square price to replace your roof, if their schedule is not full, and they have the manpower available. This rate could be considerably higher if they are flat out and running on a tight full schedule.
  6. Be flexible in regard to schedule. One of the primary facets of costing a construction service or even a product is when you want it done or delivered. If you can be flexible in your scheduling, you will achieve the most reasonable pricing. If you are stringent in your scheduling demands, then the pricing will reflect this scheduling requirement.
  7. Be flexible in regard to the actual product characteristics, such as color. This is common sense, if a color is very popular, you will pay more for the product or the service. If there is material in stock, or a product that is not considered the current go to item, then the pricing will reflect the readily available product.
  8. Consider your attitude and feelings when pricing services or products. I have had many situations where I simply did not like the individual requesting a price for my services. If a vendor does not enjoy dealing with you, you may have artificially raised the pricing. Common courtesy will normally get you a better price.
  9. Be aware of neighborhood relationships. It is not always the most efficient method of pricing to employ similar contractors or professionals that your neighbors have already used. In many more affluent neighborhoods there are relationships that become incestuous to the area. The same architect recommends the same three contractors and almost selects the contractor that will be the most reasonable for the job. This always occurred in commercial construction, however is more limited now that the computer is being used to solicit bidders. However, this type of “ niche “ marketing remains prevalent in affluent neighborhoods.
  10. Look for the new guy in the trades or the neighborhood. In many cases, the new guy could be more accommodating and interested in developing their reputation and not merely riding the wave of familiarity and recommendation. In many instances the best services will be provided by the contractor looking to impress, and not the contractor that is merely fitting you in.

Common sense is the key to obtaining the best pricing as well as the most reliable contractors and material suppliers.

DO NOT be fooled into thinking you will get something for nothing, or next to nothing! There are a lot of individuals in the construction industry that are anxious for your money! Unfortunately it is extremely difficult for the homeowner to identify the professional versus the clever scam artist.

My recommendation is to incorporate a professional that has experience in the industry.

Unfortunately this is a “ macho “ industry and every homeowner that has succeeded in painting their bedroom is” in their head” a professional contractor. NO, this is not the case. Try to find that person that has experience in the business, understands the scams and the alleged experts trying to make a killing. Use common sense, and do not allow the professional manipulator to take and steal your money.

Good luck, unfortunately there are a lot of so-called contractors out there willing and able to take your money!! Try your best to find one that is honest and reliable!

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