![]() ![]() ![]() Particularly on kitchen and bathroom jobs, allowance items can drive up the costs quickly, and it’s crucial that clients know the budget and are aware of when they are going over it. I also carefully track changes when the scope of work grows, as it often does, and frequently compare budgeted allowances to actual costs as the client makes product choices for items like appliances, lighting fixtures, countertop materials, flooring, and plumbing fixtures. My labor price is spelled out in the contract and already includes a markup to cover labor burden and some profit.Īlthough we work T&M, I always produce a careful estimate so that the client and I are both comfortable with the proposed cost of the project. I bill every two weeks, charging the actual invoice cost of materials, subs, and other services, plus the price of my crew’s labor (not my cost of their labor), all multiplied by 120 percent. I now work on a hybrid time-and-materials basis, typically with a “not to exceed” budget. It was around that time I realized my skills and temperament were better suited to running a smaller, more personally manageable business, keeping only one crew busy with a combination of custom and spec remodels. By 1992, I was running three crews, building new houses and doing major remodeling projects. I started my small design-build business in the early 1980s.
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