canadiancontractor
Thoughts on Time and Materials versus Lump Sum
This contractor prefers Lump Sum, saying Time & Materials gives "clients bullets to shoot us."
Contractor Matt Smith posted underneath our last week’s article by JELD-WEN called ‘7 Questions homeowners are asking contractors.’
Looks fair enough and we should all be able to answers these questions.
On point #6, “What is the cost breakdown,” there can be a fine line between full broken-down Time & Materials plus Overhead and Profit versus Lump Sum.
We have the best luck using more of a lump sum to avoid giving clients bullets to shoot us. We have Infrastructure on one line and Allowances on another, with mark-up built into Total Project Value.
[Matt then lists the following Essential Elements of any job…]
Open communication, proper design, clear scope of work, estimated fair price for the scope outlined, [sufficient] mark-up to cover your overhead and profit to stay in business, listen more, play fair, make the sale, build, create a raving fan client!
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