Tue. May 21st, 2024

You may need to look into hiring some administrative assistance to help you with the increased paperwork. You can also invest in construction management software to help you keep track of documentation on projects. This may allow you to do more work with the same administrative team you have now.

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Cost Breakout

A major part of a general contractor’s job is to figure out how much money to charge in construction contracts. Drawing from our experience, this is especially challenging when the property owner wants an exact price upfront. Before you hire any contractor, you should verify their credentials and references. Credentials include licenses, certifications, insurance, and bonding, which show that the contractor is qualified and compliant with the relevant laws and regulations.

Where to find good subcontractors?

Stakeholders need to be included to understand and manage their expectations, and construction crews must be consulted as well to get insights from their skills and experiences in similar jobs. Regardless of what type of construction planning you’re involved in, the best way to start is at the end. You need to know what it is you’re planning for, and where it will stand in the environment in which you’re building it. Otherwise, Anderson said, they might be able to get more money elsewhere.

Once you have narrowed down your list of potential contractors, you should compare their bids and proposals. A bid is a document that outlines the contractor’s estimated cost, schedule, and scope of work for your project.

If cash flow gets tight during a project, paying your suppliers could become challenging and stressful, and you may find yourself dipping into the payment from another project to fund this one. Or, you may end up slow-paying your supplier, potentially causing friction with that relationship.

Even worse, retention percentages for subcontractors can be higher than that of primary contractors. Most general contractors charge between 10-percent to 20-percent of the overall cost of the home build, and this includes permits and materials. It’s a fee that most amateur home-builders find well worthwhile, especially if they have any tried-and-failed experience at general contracting. Yet very few people are qualified to act as their own general contractor (GC). Building a house requires you to pull together many strings and make sure that they coordinate in a myriad of ways. Projects and subcontractors have to be scheduled in the correct order, interspersed with numerous municipal inspections.

For example, you might receive a portion of the total payment after completing the foundation, another portion after finishing the framing, etc. This method mitigates the risk of a lump-sum payment to ensure you receive a steady cash flow while the project progresses. Dispute resolution (mediation, arbitration, legal action) is an unfortunate, but not uncommon, necessity as a general contractor.

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