Messages and Online Forum Q&A

Re: Residential Home Costing Software - Average Cost of Goods Sold

From: sbutler@swcp.com
Category: Other/Misc
Remote Name: 67.42.133.225
Date: 17 Nov 2005
Time: 11:00 AM

Comments

Question: I'm a general contractor in New Mexico. Is anyone out there interested in comparing construction costs? My main goal is to come up with a solid number for the average hard costs on custom residential projects -- the cost of goods sold. Are there any good websites that have COGS percentages by region? Any sources for what are reasonable goals to set for COGS?

Builders Websource® Answer: Knowing accurate building costs is essential to running a profitable contracting business. On a any project, your profit is the difference between two rather large numbers. If your cost estimates are off by even just 5%, your profit margin could go into the tank. Similarly, if a lack of clear cost understanding causes you to overbid a project, you might lose the job since someone else with better cost data could underbid you.

Since building and materials costs can vary wildly from region to region, you must rely on real-time data. You have a few options available to you. First, you could purchase one of the CD Estimator software packages that contain residential building cost estimates. Free periodic cost updates are available online. These products typically sell for $50-$100. Click HERE for more information.

Alternatively, Builders Websource has relationships with certain companies who can provide online cost modeling by zip code or region (US only). This is a more comprehensive online application for cost estimating. However, this is a serious professional tool that's well worth the investment and will pay for itself many times over just on your first project. It also enables you to do "what-if" scenarios to see how modifications to your plans would increase or decrease your costs. This is also useful when working with clients on custom projects.  For more information on Resi-Cost, contractors and builders should click HERE.

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