Project Prices, Sticker Shock

[jmellc]

Originally Posted by clutchrider

I have been mulling the idea of adding to our deck a pool that would connect to our existing deck. It's old trex and faded but I was not in the mood to change it out this year. Called a place and the man was very nice, took time to talk and explain things to me. My wife and others have discussed design ideas and his was very close to what we were already thinking of. The pricing came back broken out into sections like removing old decking, new deck build, refacing old deck, and railings. Total was $31k for all of it (new 11x20 deck, refaced 20x27 deck).

The shock hit me and I did laugh at the number and smiled while I showed my father and wife. They both chuckled to themselves. I think the shock factor comes two fold, those who have no idea how much things actually cost or the cost of business and therefore are just overwhelmed. And those in the category that I fall into who are very DIY and handy with a lot of things that take it as a challenge. I could probably build the new deck for under $2k myself and actually plan to now. So I look at the cost and realize they have to eat, pay bills, make a profit, etc. but it always rubs me wrong. I work on cars both ours and others when needed and so thankfully I have people or online resources to get parts much cheaper than "markup". That alone is a huge factor for me, seeing what things actually cost vs. what some of these contractors or tradespeople charge for material is pretty drastic. But again I'm a DIY guy who takes pride in the work I do so my train of thought is a lot different.

If you are good at DIY, you can save a fortune and no reason why you shouldn't. If your time is plentiful, your main expense is materials. Naturally, a contractor seems a fortune by comparison. But few people know the expense of merely keeping the doors of a business open.

I had a "ghost policy" for worker's comp. It excluded me and the rates were only good if I had no claims. I paid $1,300 a year for it. If I'd had someone besides me injured, they would cover the claim but retroactively charge me standard rate, closer to $4,000 a year. I worked for one boss that paid about $5,000 a year for coverage on 2 of us, that excluded him. Covering himself would have taken it to about 8,000 I think. Owners with larger crews pay exponentially for worker's comp and that is if they have no claims.

I carried $1,000,000 general liability. I think I paid about $2,500 or 3,500 for it. One commercial customer started demanding $2,000,000. I had to let them go, I couldn't pay for it.

I paid $85.00 a year for my license and $150.00 a year for continuing ed to keep it. That part wasn't too bad but still adds up.

I have about $5,000 worth of tools and equipment I used when I had the business. Working for someone else, I still carry around close to $1,000 worth. I carry about $200 worth of the company's equipment.

Markup is high and some overdo it. I used to charge 20%. You have to charge it to cover the cost of handling it. I sometimes let customers buy their own materials but then they would get unsuitable material or wrong brands or stuff unsuitable for the application. Or customer calls from store, "what is this, what is that"? Some stuff from big box stores is same as supply house varieties. Some is not. Some types of electrical boxes, while legal, are much harder to use. Wire does not fit into them the most efficient way. I've had people buy shallow switch boxes when I specified standard depth. I've had people buy wire too large or too small. Some have bought 2 wire cable where I specified 3 wire. Etc, etc, etc.

I haven't built decks but I'm sure he has to dig footings and pour concrete. In our area, that alone is a hard job. Our soil is rock and red clay. He has to pour footings and let them cure, then come back. That sort of stuff stretches out a job by itself. If he has to dig with a backhoe(?), he has to buy one and keep it running or rent one and charge it to you. Same with any hammer drills or maybe rock drills. Or power augers.

When you do the deck, keep careful record of your material cost and any tools you buy or rent for the job. Keep track of any permit you take out. Then consider any help he hired, because he can't do it all himself. Consider the insurance and license expenses I mentioned. You will see why he had to quote it for the price he did.

[clutchrider]

I thank you for the inside detail, it helps for my own education. I no doubt that the price had a ton of overhead I probably couldn't sit down and think about in one posting. I think for me again it's the fact that as a DIY person it makes the work that much more to take pride in knowing the job was done to my standards and I saved while doing it. Same with car maintenance and mechanic work that I do.