The mysteries behind the cost of construction or renovation, companies don’t want you to know! Part 1: General Approach There is no one universal formula to calculate the cost of a construction project, we will explore what goes into a price of typical home improvement projects, such as garage builds, basement renovation, decks, concrete jobs etc. So what is hiding behind the mysterious dollar amount you receive on your quote? The price of any construction project consists of many different variables and components. With that in mind, every company has their own strategy of composing costs of construction labour and resources according to their company structure and business strategy General business structure/approach There are few business structures which companies adapt to run their business, each one will have a different outcome in terms of price, quality, timeline and service you may receive as a result. All Sub-Trades Most popular approach among the “big guys”. The owner/s will usually break the project into smaller pieces of work, such as concrete, framing, roofing etc. and tender (sub-out) those to several trades. This process usually involves several layers of managers and reseller who will further resell the job to “smaller guys” to get the best possible price. The result: Cost: usually the profit margins will be way higher then they need to be, as each “middleman” needs to get their fair share of the “job referral”. Quality: As you’ve probably guessed, the actual person who is doing the work not only know the customer but most likely doesn’t even know the builder. Gets the minimum pay and as a result, will try to make every possible shortcut to complete the job. Not giving too much thought to the fellow trade that comes after him nor to the craftsmanship of the work and material used, will also affect quality. Timeline: As a result of multi-trade interactions it’s tough to arrange for flawless work schedule. So don’t expect the project to be done on time Owner Operator This approach entails, the owners completing all the necessary work themselves. The results: Cost: This will probably cost you the least initially as one or two guys take all the load upon themselves. However, right before the work is complete it's normal to expect additional costs which haven't' been accounted for initially due to mispriced estimation. Quality: There is no person that is good in everything. Therefore, due to lack of resources when one or two guys are taking upon themselves the commitment of completing the whole project even with a helper, they may get overwhelmed with work pretty quick. This will usually result in: missed items or steps required to complete the job right. It will almost certain to end with: miscommunication, imperfections, and will look similar to a good DIY project. Timeline: Normally this projects will take much more time than a good reputable company with an organized professional trades Mix & Match: This method entails the owners doing some of the jobs usually whatever they are good at best, and outsourcing everything else. This is probably the most optimal set-up as it entails you to overpay for trades while saving costs by doing what you know best. The result: Cost: The costs will be mixed. Good reputable companies will need to have some solid longtime relationships with outsourcing trades. Be confident that they will be able to complete their jobs flawlessly & without delays Alta Home Approach At Alta Home, we have crafted another approach: We have gathered together people from different skills and trades background. We then decided to operate a company based on simple but strong principles: To help homeowners get the best quality for the best price. We rarely outsource any work, rather complete most of the work ourselves. We strive to provide transparency in terms of process, costs and time while providing a high-quality craftsmanship. We check all the materials carefully as we directly deal with the vendors and customer and simply treat each project as our own. As a result of not having anyone to resell the jobs to, we are able to keep costs to a minimum. We are not a 1 or 2-man operation. We are a team of highly skilled trades/owners that will pay attention to details, provide recommendations, & micromanage each project. In addition, we will not stop until you are fully happy with your project We strongly encourage our customers to do their due diligence before hiring a contractor. There is much more involved than just the $ amount of your quote. Read and verify previous client’s reviews, ask questions, explore their strategies, ask about licenses and insurance, pay attention to their sales guys, will he stick around or just wish to make a sale. These and other tips will help you to ensure your construction project will go smooth and flawless. In the next parts, we will explore on a more detailed level of what actually goes into building a garage, developing a basement or getting involved with a concrete work and the cost break down to each one of them. To be continued..