Why does a XXXXXXX (insert any qualified trade contractor) charge so much?
It just amazes me that it is so poorly understood why a good tradesman, that runs a profitable business, that is compliant and reliable charges 100 plus dollars an hour.
The fact is any owner builder needs to understand, if you engage a trade contractor, you should be prepared to pay the appropriate hourly rate.
When you engage a contractor, you have a reasonable expectation that the traddie will be prompt, courteous, professional, competent, carry the appropriate insurances and be respectful of your needs and the requirements of the other trades he works with on your project.
So lets take a typical small contractor that employs two or three tradesman.
There business needs to comply with the relevant legislation and remain compliant against the provision of their individual or corporate licenses.
Consider the following fees and overheads that must be met before they can even ‘open the doors’ these days:
- Workers Compensation (workcover)
- PAYG Taxation
- Contractors Risk
- Public Liability
- Professional Indemnity
- Motor Vehicle
- Comprehensive insurance
- Repairs and maintenance
- Lease or Hire Purchase financing cost
- Premises and facilities
- Rent or mortgage
- Insurance (building and contents)
- Body Corporate
- Letterheads and Stationery
- Fees, Registrations and Licensing
- Professional Development costs
- Subscriptions and Memberships
- Annual contractors license fees
- Business Registration
- Accounting Fees
- Inventory costs
Each week, month and year, these costs are there for trade contractors. These obligations need to be paid in full or the business cannot operate.
After you consider the business expenses, think about what it is that you are paying for.
Do you want safe and compliant services and finishes for your property or will you be satisfied with shoddy workmanship that does not really provide value and may make it difficult to realise a fair price for your property should you choose to sell?
None of this even considers the time and effort that the contractor has expended to gain their qualifications.
Most trades require considerable study and effort to demonstrate competency and be granted their license.
So, if owner builders feel they cannot afford a fully qualified, registered, competent and insured contractor, I would argue they cannot afford not to!
Happy owner building!