A general contractor is a person responsible for the entire construction process. He or she must determine the best methods to finish the project and complete the project within the established time and budget. To get this done, contactors have to wear different hats simultaneously and charge depending on the number of hats they are wearing. On average, however, general contractors charge anywhere from $43.93 to $91,370 per hour.
There are four major factors that determine what a general contractor will charge for a project. They include:
Type of project
The amount a general contractor will charge will be different depending on the contractor’s project. For example, a general contractor will charge differently for adding a new wing to a building than building a structure from scratch or remodeling a building from the inside.
Where the contractor operates
Where they operate: where you operate also determines how much you earn as a contractor. Contractors who live in places with higher living costs tend to make more than contractors who live in lower living costs. Contractors in California, for example, will earn more than contactors in Idaho.
Quality of the work done by the contractor
Quality of Work and Clients: General contractors who work for richer clients earn more than those who work for less wealthy clients. Often, the more skilled and experienced a general contractor is, the more he or she tends to earn. Also, the more skilled the general contractor, the more affluent clients he or she will likely work with. Contractors who do good work tend to get better-paying contracts than those who don’t work as well as the skilled ones.
Responsibility of the general contractor
The amount a general contractor charges might vary depending on the amount of work the contractor has to do. Routine work like developing a schedule working within a budget or ensuring proper communication between different teams will not cost extra. Other activities might cause an increase in charged costs. Such other activities include:
Project Pre-Design: this is the phase of the construction before the construction designs have been created. This phase involves bringing the client’s ideas from the mind to paper. This phase helps to discover the viability of the project. In this phase, the general contractor usually places an advisory role, calling on experience to curb wrong ideas or improve the client’s right ideas. A general contractor involved at this construction level will charge more than one brought in earlier as he or she will charge per hour.
Project Design: a general contractor may be involved in designing the project. The design might be done alone, but it’s usually done together with an architect and sometimes an engineer if a general contractor is brought in at this level of construction. He or she is usually very skilled and well-trusted. He or she will tend to charge more, too.
Contractor Cost breakdown
When a general contractor gives you a bill, several components are usually added together. The following are some of the factors that contribute to the bill’s composition.
- Insurance
The general contractor is responsible for the safety of the workers on site and the equipment. Now, it’s almost inevitable that something will go wrong at one point or another. Payment for these mishaps is typically costly; hence, insurance has to be taken out. Also, some laws necessitate the provision of insurance for workers.
- Taxes
Depending on the place they operate, general contractors pay a lot of taxes. They could pay taxes to the federal or state government or to the county or city they operate. These taxes are billed for in the work they do.
- Employee payment
General contractors add to the bill the cost of the labor that works on your project. This cost includes the workers’ payment, taxes, and other benefits.
- Office Costs
General contractors may have rented office spaces, which they generally have to pay for. Most of the paperwork for your project gets done at the offices. Such rented offices require the payments of rent, stationery, electricity and so on. This has been added to the bill you presented. You don’t bear the whole office cost; the general contractors spread the office cost across the clients he or she has within a certain period.
- Other Costs
Other costs included in the bill are transportation costs, communication or call costs, and marketing costs.
- For construction works, heavy machinery and personnel sometimes have to be moved from one place to another. This movement costs money in the form of car or truck maintenance or fuel.
- Communication costs are all forms of call costs. The general contractor often has to make many calls to get information from different construction teams. He or she also receives calls from several units, calls which are charged to the company. Also, the costs from an internet service provider are charged under communication costs.
- Marketing costs are some of the other costs that might be added to the total cost presented. Most construction firms have to advertise to be able to compete in the construction market. If you are not heard about, no one will hire you, no matter how good you are. The marketing costs at the end of the day end up on the customer, which is you. Like the office costs, you don’t bear the total marketing costs of the construction firm. The cost is spread out across the number of clients the firm has over some time, sometimes a year.
Conclusion
Several factors affect how much a general contractor will charge. However, the amount a general contractor will charge is secondary to how well a general contractor does his or her job. The best general contractors use tools that improve their work and make it run without too much load.
