5 Ways to set your General Contractor project price

by Carter Toni

General Contractor project price

Setting your General Contractor project price could be the thing that ultimately sees your business succeed or fail. One in three construction companies operating in the United States between the years 2014 and 2016 went out of business. In your line of work, you understand why setting the right General Contractor project price can make or break your business. You have the digital tools and right people to facilitate the process. What more can you do to get the job pricing right?

In this 5 step guide, we will examine the processes, tools, and knowledge for setting the right price, and keeping your General Contractor business flourishing.

Why take the time to set the right General Contractor project price?

Pricing can make or break your business. If your price is too high, you become irrelevant to the industry. If you price too low, you lose money. The price must always be just right!

  • What are the first steps before setting your General Contractor project price? 

Before you place your bid, do prep work by assessing the site for accessibility. What should you consider when looking at site plans and designs in preparation for bidding?

  • What are some common extraneous factors that affect your project price?

Competition, market conditions, the economy and even weather are some factors out of your control that will determine how much you bid. How do you adequately prepare for these?

  • What resources could help you compute the right General Contractor project price? 

In the digital age, more and more cost estimation applications are available. Can these tools help you price better than the traditional spreadsheet? What advantages could you gain from using certain cost estimation software?

  • How do you compute your General Contractor price?  

Which way do you break down the different components of the overall contract for better cost controls and calculate your profits? How do you work out your mark-up so you are taking money home at the end of a contract?

  • How do you compute risk into your General Contractor price?

Risk is manageable in construction. A construction company that takes the right approach to risk thrives. When setting your contract price, how do you competitively price for an intangible aspect such as risk?

Every construction business is unique. When pricing for a contract, keep in mind labor costs, overheads and targeted profit margins, as they specifically apply to your business. A General Contractor who has mastered the science of pricing right stands a higher than 1 in three chance of their business succeeding in the longer term.

Where does Contractors Insurance come into play?

Contractors Insurance is considered one of your overheads and should be included in your cost estimate. Contractors Insurance will cover you in case of legal claims brought against you. You will be working with sub-contractors. It is important to ascertain whether your cover includes injury to, or damage caused by sub-contractors. We are here to answer all your Contractor Liability insurance queries.  Call Contractors Liability today on 888-676-0923 for advice and a quick quote.

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