Why are Contractors’ Prices so High?

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Are you in the process of getting quotes from contractors for your next project? You might be here because you had a contractor tell you a high estimate or you’re preparing yourself for what’s coming. There is a lot of information out on the internet about what jobs cost – some good, some questionable. Either way, construction is not a cheap industry by any means. In this post we will talk about a few costs that may be rolled into the price of your project as a cost for a Contractor to do business.

  • Equipment, Labor, and Materials: These are the direct costs that go into completing your project.
  • Profit: Just like most companies, Contractors are in the industry to make a profit. 
  • Insurance: It is both beneficial for you as the client and the contractor themselves to have insurance that will cover any accidents that might happen on or off the job site.
  • License: Licenses cost money to obtain and maintain throughout the Contractor’s operation.
  • Bonds: Contractors may be required to obtain a bond for their license and for a job depending on who is requiring it. This ensures the Contractor completes the job or will have to fork-up money to do so.
  • Advertising: Contractors want customers to find us! Advertising costs include marketing on websites, business cards, fliers, signs, or anything used to find future projects.
  • Facilities and Utilities: These costs include office expenses such as rent, electrical and water bills.
  • Equipment Maintenance: Just like maintenance on your car, construction equipment needs to be properly maintained.
  • Management: To properly estimate, manage, and collect money for your job management is required. 
  • Certifications and Training: Some jobs and certifications require special training to complete. Contractors want to make sure they keep up with certain industry standards to ensure that your job is done right.
  • Other: Fees, health insurance, 401k, legal fees, bank fees, office supplies, and many other costs may be factored into the price of your job.

These costs are ongoing throughout the Contractor’s operation but not the entire cost will be applied to your job. Often, Contractors will use a percentage of these costs that will be applied after the direct costs (materials, labor, and equipment) are calculated. 

We understand that some of the projects you might contact us about are unexpected or unwanted problems that did not plan on spending large amounts of money on. We are here to help you find the best and most cost effective solution!

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