Getting what sounds like a good deal and saving money on a home improvement or repair project can feel like an accomplishment. However, many negative unintended consequences can arise when saving money becomes the highest priority when choosing a construction company. Low prices can be a red flag because most reputable, fully licensed, and insured construction companies with a complete understanding of their overhead charge a premium for their services.
Many problems often arise from construction companies that do not consider everything involved when they give quotes. On the one hand, you believe you are getting a discounted price compared to the other quotes you received. But after the project starts, communication starts lacking; corners get cut, and construction companies sometimes abandon projects before completion. If they complete the project, it will need repairs shortly, further increasing that previously appealing low cost.
A competitive price is not always the price to do a quality job and provide a great experience. Construction companies that embrace the competitive pricing model for their business are constantly running from one project to another, leaving a mess in their absence because of a lack of funds and time. It should be the construction companies’ obligation as professionals and as representatives of the industry to charge enough to provide an excellent experience for everyone involved in a project and deliver a great finished product. Competitive pricing is a race to the bottom and is often used to keep a busy calendar, beat out the competition, or take on a lot of work with no clear plan to complete a job correctly.
Low Margin Projects
The low-price quote you might consider going with usually means the construction company plans to make a lower profit margin. In many cases, construction companies will take on a large number of projects at a lower profit margin on each job with the hopes as a collective that they will make enough to stay in business. This “low-profit margin mass production” strategy has the potential to work on projects that do not require detailed specific work or too much-specialized planning and communication.
However, as a homeowner looking to make improvements or repairs, this should not be the strategy you want the construction company you choose to take. Most construction companies lose interest in completing the job once a delay or an error occurs on the project that swallows the profit margin. Getting in contact with a disinterested construction company can be very difficult.
Instead, we recommend trusting your project in the hands of a construction company with a strong brand and a track record of choosing quality. A higher price from a well-established construction company can often lead to an overall more pleasant experience.