Building Costs are Up Again
Friday, August 25, 2006
Rising fuel and materials costs are really affecting many contractors in our network, cutting into profit margins. At ConstructionDeal.com, we would like ask all of our service professionals how you are handling the cost increases? We want to put together a list of "best practices" from our company owners and managers. We will publish as much information as we can here on the Contractor Update blog.
We're aware that costs are up across the board. It's more than just fuel costs. Lumber, concrete, and more have jumped higher. Charges have increased for delivery, waste disposal, and even insurance. Natural gas, heating oil, electricity are even higher.
Many contractors say they have been delaying raising prices but plan to do so in the near future. What are the plans for your company? Let us know if you're raising prices, adding fuel surcharges, or increasing service call fees. Or are you doing a combination of all the above? Feel free to email us on how your company has been handling business so that we can pass it on to our network. You can also enter a "comment" on this post.
We would like to know everything you have to share about your business. Have you lost bids due to higher prices? Have you reduced your company travel radius? Have you had to cut down on the number of employees or subs? Email, post here, or call us (866-663-4711), when you get the chance, and share your experiences.
3 Comments:
commented by 
Construction Deal, 9:58 AM
Construction Deal, 9:58 AM
From Renee Schwarz, in the San Fernando Valley:
"Hi! How is it going? I already raised the costs on everything. Just like everything else has gone up, so do your prices. Also I do not try to go farther than the S.F Valley unless the money is really good! Thanks!"
"Hi! How is it going? I already raised the costs on everything. Just like everything else has gone up, so do your prices. Also I do not try to go farther than the S.F Valley unless the money is really good! Thanks!"
From Connie LeAir, North West Climate Controls, in Washington state:
"We are an HVAC company in Puyallup, Washington. We certainly felt the burden of the monthly gas bill for all of our service, sales and installation vehicles when the gas prices went up. Our monthly bill for gas went from $3,300/mo to almost $7,000/mo! We hated to raise prices, but had to cover our costs somehow. After contemplating different avenues, we decided to add a $7.00 fuel surcharge to each one of our calls for the service department. I hated doing it, and disliked it even more when I had to quote it to our customers. Surprisingly enough, our customers understood the "temporary" surcharge and the need to cover the costs of doing business. We stressed to them that if and when the fuel prices decrease, so will the surcharge. A large number of our customers must be used to this, because on several occasions they've made comments such as "everyone else has to". As a company, we too are hit with these surcharges. Even the supplier next door has a fuel surcharge, and we walk over to his shop to get parts! But, it's a cost of doing business..... he has to bring the part into his shop somehow.
Connie LeAir
North West Climate Controls, Inc
253-435-8834"
"We are an HVAC company in Puyallup, Washington. We certainly felt the burden of the monthly gas bill for all of our service, sales and installation vehicles when the gas prices went up. Our monthly bill for gas went from $3,300/mo to almost $7,000/mo! We hated to raise prices, but had to cover our costs somehow. After contemplating different avenues, we decided to add a $7.00 fuel surcharge to each one of our calls for the service department. I hated doing it, and disliked it even more when I had to quote it to our customers. Surprisingly enough, our customers understood the "temporary" surcharge and the need to cover the costs of doing business. We stressed to them that if and when the fuel prices decrease, so will the surcharge. A large number of our customers must be used to this, because on several occasions they've made comments such as "everyone else has to". As a company, we too are hit with these surcharges. Even the supplier next door has a fuel surcharge, and we walk over to his shop to get parts! But, it's a cost of doing business..... he has to bring the part into his shop somehow.
Connie LeAir
North West Climate Controls, Inc
253-435-8834"
"We have placed an erasable calendar on the wall for scheduling. The estimator now has a more efficient route for estimates. The customer may have to wait to get the estimate which is now determined by the area rather than immediate scheduling for the estimate. Much better this way."