Have you ever gotten a quote from a professional construction company ?
Being shocked to see its 5x more than you expected !!
You might be thinking this is ridiculous looking at the figure and telling yourself, how much money does this guy think he should make in a day!?
Lets look more in depth of these cost.
Typically a contractor has five elements to consider when biding a job. He needs to consider: employee cost, company overhead and operational cost, direct expenses, equipment and disposal cost; and company profit. Let’s have a walkthrough so as to understand how the experts end up with the figures in their quotes.
First, employee cost:
This includes a careful and expert identification of how long and how many individuals will it require to preform this work in a un-rushed, safe, and professional manner. Keeping in mind that masonry work is highly labour intensive with a lot of heavy lifting, etc. Masonry is mostly done as a team effort with your skilled mason and mason labour. Based on the 2023 labour rates for a mason are not cheap and rising each year. Information on these rates can be found @ liuna provincial ici collective agreement under mason tender.
This step is crucial for contractor as a stepping point for other cost to follow, additionally crucial for the client to be aware of also because if enough time is not allowed to preform the task it will result in sloppy rush work and unsafe methods of preforming those tasks which can result in serious injury.
Second, company overhead / operational cost:
Meaning all those hidden cost to keep the business afloat.
Running a construction company is expensive with every project unique these are some typical contrasting cost that comes with a typical project.
- Insurance fees
- Licensing fees
- Administrative office staffing costs
- Job estimating fees ( which are free of charge to the client )
- Accounting fees
- Lawyer fees
- Advertisement/marketing fees
- Corporation fees
- Certification and annual training fees
- Safety consultation fees
- Business taxes
- Small equipment cost and maintenance
- Vehicle operation costs
- Small tools cost
- Hardware miscellaneous saw blades etc.
- Client meetings cost
- Delivery and transportation of goods
- Site bathroom facilities.
- City enforcement fines, primarily parking.
To mention a majority, etc.
These costs do differentiate between company’s and fluctuate on business revenue and costs which are typically calibrated annually. Overhead costs are generally overlooked by the client which incorporate any where from 20-40 % of the project cost.
Third, direct expenses:
Which consist of building materials needed to complete the project at hand. Stemming down from overhead cost in estimation to be as accurate as possible to know exact sqaure footage and measurement to determine the required amout of material needed. On the other hand, if material will be supplied by a contractor you can expect to pay an upmark fee on that material which generally can range from 5-10%. When you are purchasing masonry supplies its not as simple as wlking into your local home depot and picking it up off the shelf. You must have experience in knowing which materials are compatible with others. Example, different mortor and cement types with different brick, stone or cmu. Additionally trying to match exiting veneers on additions or repairs can be challenging and often take time searching different supply yards so you really have to know where to look. There are instances more likley then not when working with general contractors that they will supply materials to avoid markup costs as they have enough knowledge and knowhow to do so.
Fourth, equipment and disposal costs:
On top of the list are heavy machinery, garbage bins and large scaffold and engineered scaffold builds. Generally, some projects require heavy machinery such as forklifts especially if working at heights to move materials above making work efficient. Excavators and other earth moving equipment are necessary when doing hardscape projects excavating soil and bringing in new arrogates to be installed.
Rental of this equipment is expensive entailing initial cost plus insurance and float charges, which can be daily, weekly or monthly fees. Keeping in mind if a contractor owns these equipment they will also charge for them directly or indirectly.
Disposal bins dropped on site to haul away garbage and excavated soil fees must also be included.
Fifth, company profit:
In order for any company to prevail, expand and grow it needs to have profit. This is where the owner takes his/her salary from. Undeniably, sometimes in business we take loses due to numerous reasons and there needs be some reserves to cusion those loses.
Generally, determining profit is done at owners conclusions and can range anywhere from 10-35% depending on skillset and level of labour intensity that pacific job requires. For example the skillset and labour intensity on installing a typical brick wall will be lower then installing five point hand chiseled heavy granite rock. Hence, profit margin will rise because of skillset and craftsmanship of the masonry work preformed as well as the physical wear on the body due to lifting heavy stone.
Now that we have a general idea on what things cost lets do an example masonry project estimation.
– client contacts our office for masonry services to be preformed on a commercial building. An on site meeting takes place where client has an existing opening of the building that they would like to have closed. The existing wall consist of 8” interior concrete block with a clay exterior veneer brick.
-back to the office, the scope of work is put together and our labour and operational cost will be determined.
Estimate / employee cost / overhead / profit
For example we will use easy round fictional number values.
Estimate / heavy equipment and disposal, for this project we will not need any heavy equipment or waste bins. Only small equipment of cement mixer, gas power concrete saw, arbrotech reciprocating saw. Hammer / driver drill’s and light scaffolding, which are covered in overhead operational costs. Small amouts of masonry debris and material packaging garbage will be hauled and disposed by truck.
ESTIMATE / DIRECT MATERIAL EXPENSES ,FOR EXAMPLE WE WILL USE ROUND FICTIONAL NUMBER VALUES.
Now that we have all are associated costs we can put together a quote and send it off to the client with a description and outline of work details. That looks something like this.
All projects are unique and not all construction company’s estimate there projects along the same lines. Other pricing strategies can be cost per product unit or per sqaure foot of material ,which makes sense on largre scale projects like what they call in the industry money walls which are straight long walls with limited interruptions, and shouldn’t be practiced on small costume projects of such as there are many factors to consider.
The takeaway of this blog is to shed some light on how the numbers break down and give you a general idea of construction costs.
There are many so called contractors running around offering services at an extremely low cost.
My advice is cheaper is not always better, beware. Use common sense and take into consideration the risks.
-Tradesman working at lower rates are less experienced and most likely apprentices at best. There is no reason for any experienced tradesman to be working under rate as every legitimate construction company cant even find enough skilled workers presently in 2023.
-Your project will be rushed with unsafe practices will most likely fail in numerous ways.
-Contractor is not running a legitimate company and not paying his overhead / operational cost which will surely drive them out of business.
-Not paying their taxes !
DANIEL R. GOLDSMITH
YORK MASONRY GTA.