Construction Notebook: The Real Costs of Site Work

Construction Notebook: The Real Costs of Site Work

If you’re not charging for your work preparing a site, you might be forfeiting 10% of your project’s revenues, and more!

Stump removals having difficult accessibility can cause an extra day of manual labor. It would be quicker and cheaper for the client if the contractor knew about the stumps before the garage was built.

Site prep work can be costly, time-consuming work, and we see too many landscape contractors giving this work away for free. While they usually charge clients the cost of equipment used for the landscape project, hardscape materials, and green goods, it seems too many contractors are afraid to charge clients for the site work that must be done before starting the actual contracted construction project.

And if you aren’t charging for this work, you’re losing an opportunity to show the client more of the value you bring to this work.

When times are tough and competition is fierce, it’s especially hard to charge for site prep work, but that’s exactly why you should consider doing it anyway. You can’t afford to do work for free because your expenses will catch up with you! These expenses include:

Your costs for the labor
Your time for demolition
Your time for site prep
You time for site cleanup and disposal
Your equipment costs for this phase of the project — all these can add up quickly, especially if you run into some surprises buried under the surface.
And the most important reason — You will create more value. When you take the time to explain about this site work, you educate the client about all of the work you will be doing. This instills more value and confidence in your company. Often, this also helps the client decide why this project should be done by your company, and not by other contractors who didn’t explain how extensive a construction project really is.

On-Site Surprises
Most landscape contractors have interesting stories about the surprises they’ve found just below the surface on new projects. Most sites have something we haven’t expected. It could be unmarked gas, electrical, phone or cable lines. It could be hidden drains. Or it could be really big stuff.

Unexpected freezes in the north can require extra work to ensure the ground doesn’t freeze in the middle of a project. In this project, the irrigation and back-filling for trees were not completed before the weather turned cold. Here, insulation blankets were rented to keep the ground from freezing and the soil was saved on site so it would not freeze into solid, icy chunks that could create havoc on root balls.

Have you ever had to demolish a deck only to find that you have to dig out the footers sitting just under that gravel base? Or have you discovered that old house’s big porch actually houses a root cellar underneath? Many older houses have decks built over concrete porch stoops that are actually connected to the basement. Some might even have footers of their own. How much extra time will it take to clean that up?

Cynthia even discovered a tennis court during a ‘minor’ demolition for a client, taking up almost the entire back yard!

Extra work = Extra Costs
If you’re not planning ahead for potential problems and extra costs involved in site work and not charging accordingly, your job will cost you more than you think, and will be less profitable. You may not even make any money on the project at all. We see many contractors giving away the cost of this work while they try to compete against low bidders, but that costs them extra — in more profits lost on the job.

We protect ourselves going into a job by stating in our contract that we’re responsible only for the work the clients tell us about. Extra work will have extra costs. We don’t want our clients surprised either. We’ve found – through lots of surprises and experience — that’s far better to talk with your clients before the project about anticipating surprises, rather than let your clients get an unexpected, and unpleasant, extra charge at the end of a successful job.

When the adjacent property’s owner had a driveway resurfaced, the contractor dumped the excess onto this site. It had to be disposed legally, and asphalt costs more to dump in landfills than regular fill. We had to deal with this, as well as our production schedule delay, while the property owner got his contractor to truck away his waste. Neither we nor our client anticipated this problem.

Typically, we charge 10% in site work fees as an insurance policy to our client that there will be no delays and no extra costs from site work surprises. Many clients opt to pay it at the time of signing as a way of holding the cost to a final number, with no surprise costs. In 35 years, we’ve found the 10% site work fee does recover site work surprises like those shown in the photos, and it allows our production manager to forge ahead without delays in scheduling and without troubling the client with red tape and stress.

We’ll be covering project management costs and profits in much more detail in our upcoming Kinman Institute classes: “Focus on Design/Build Professionalism,” and “Design & Construction Techniques.” To find out more about these classes, contact us by email: cynthia@kinmaninstitute.com, phone: 614-764-8733, or website: www.kinmaninstitute.com.