Reducing costs and increasing workforce quality is crucial in any type of business’s strategic plan. Hiring a contractor is an excellent way to save money while streamlining operations. If you are planning to hire contractors, you may want to know, “How much do contractors cost?” A contractor will probably charge $500 to $10,000 per project. It depends on some factors such as location, the project’s scope, or the contractors’ experience, etc. Keep reading the article to find out detailed information.
What Is a Contractor?
A contractor is a person or an organization hired to perform work for another person or organization. A contractor can provide services, goods, materials, equipment, or requirements to adapt to clients’ needs. A good contractor can bring numerous benefits to a project. They help clients manage projects, and set goals with realistic timelines and budgets.
In general, the are two types of contractors:
- General contractor: A general contractor is responsible for the overall management of a project, including maintaining quality control and meeting deadlines. This professional is also in charge of managing vendors, subcontractors, and others who involving the project.
- Subcontractor: A subcontractor is responsible for a specific part of the contract or the project. Subcontractors are usually hired by the contractor to perform specific tasks or services.
See more: how to start contractor business?
How much do contractors cost?
This contractor pricing guide is all you need. Typically, the contractor costs around $30 to $100 per hour. Besides, a general contractor also might charge between %10% and %25 the total cost of the job. It depends on many factors, such as the project size and flexibility, the hands-on experience and skills of the contractors, the location, etc.
|Type of project||Estimated design cost|
|Small business project||$100 to $500|
|Mid-size business project||$500 to $10,000|
|Large business project||More than $10,000|
Are you looking for the best place for hiring contractors? Asia is one of the best destinations for hiring contractors, especially Vietnam. According to Economic Research Institute, the average cost of a general contractor in Vietnam is approximately $12 per hour.
5 Elements To Determine General Contractor Rates
Type of Contract
Typically, there are three types of contracts, including Time and material, Fixed Price, and Cost plus a fee. Each of them has its pros and cons, understanding exactly how it works before making any decisions will help you choose the one that works best for you.
Time and material contract
Businesses will delegate tasks and pay for the contractor based on the time and material they spend on them. Compared to Fixed Price, Time and material are often more expensive.
Fixed price contract
If the size, deadlines, and costs of the whole project are determined before development starts, then choosing a Fixed price is always a great decision.
Cost plus a fee contract
There is an initial fixed price agreed upon for the project; however, if any changes occur during the project implementation, adjustments can be made; the price will be based on the deal between two-side
Size of Project
The most evident factor that directly impacts the contractor fees is the size of the project. The more extensive project is, the longer the production process will take, resulting in higher costs. Besides, the extensive project requires more sub-contractors, extra staff, and materials, which can lead to additional costs.
The complexity of a project
Project complexity is a significant source of uncertainty and risk, which can incur additional costs. The contractor’s price is also based on the project’s complexity.
As a result, the contractor might ask for higher fees. However, working with a contractor with experience, expertise, and enough skills let you deal with specialized project efficiently. From then, the project can be completed on time and within budget.
Location of the contractor
Looking at the increasing trend of hiring contractors instead of permanent staff, especially in emerging economies, it is essential to understand the factor that drives hiring decisions. Country selection plays a vital role because it’s one of the factors influencing contractor fees. Hiring contractors in Asia, especially in Vietnam, will be more cost-effective than hiring in Europe and America.
Experience of the contractor
Another factor that affects contractor costs is the level of experience and knowledge. A skilled and experienced contractor usually has higher contractor prices but will come with better results. The important thing is you need to find a reputable contractor. A reputable contractor is a person who can provide certifications, portfolios, reviews from previous clients, or other legitimate forms of proof.
Besides you can also ask your friends or visit some review websites to find the perfect one.
How To Choose A Reputable Contractor?
Finding a reputable contractor is an essential part of completing your project. Though it can be tempting, you don’t always want to go for the lowest possible bid, as this may cost you more money.
Choosing a reputable contractor plays a crucial role in completing your project. Here are some tips:
Compare your options online
Nowadays, everything goes online. It’s not difficult to find out what people are saying about a contractor. You shouldn’t limit your research; you can search on forums, platforms, or review websites. Furthermore, you also can ask them about their previous clients.
If a contractor is hesitant to send you a portfolio, it’s a sign that they may not have the experience to get the job done. Then, narrow down to 4-5 options, contact each of them, and ask for the price estimate.
Meet the deadlines
In addition to costs, meeting deadlines is one of the critical factors when choosing a reputable contractor. Failure to meet the deadlines causes a lot of unnecessary consequences and also can generate major bottlenecks for you. As a result, your project can not be completed on time while still creating additional costs.
That’s why don’t forget to ask the contractor about quality control and backup management before signing a contract.
Have clear communication
Make sure your contractor can reply promptly to any questions or concerns, especially if you are working in a different time zone. Make sure the contractor has needed skills such as communication skills, problem-solving, critical thinking, etc, to ensure that they can understand and address your business requirements.
Have information security
When you hire a contractor, you may share private business information with the partner without realizing it.
If such sensitive information is not handled appropriately, it may lead to severe consequences. It is highly recommended that you should sign a nondisclosure agreement with the contractor before sharing any sensitive information.
Frequently Asked Questions
What is a general contractor markup?
A general contractor markup is an amount of money a contractor charges above their direct costs, usually represented as a percentage.
When do you pay a general contractor?
The contractor will usually provide a payment schedule based on the length of the job. Generally, there is an upfront payment to secure the job, followed by monthly or quarterly payments based on the deal between both sides, and a final payment when the job is done.
Do you tip a contractor?
Tipping is not required or expected, and it depends on yours. If the contractor satisfies you with their work, they get the job done before the deadlines, or the outcome is way better than you expect, then tipping is fine.
Hopefully, this article helps you understand more about how much do contractors cost. If you find it difficult to hire contractors in Vietnam, don’t hesitate to contact ERA Staffing solution. We provide a wide range of staffing solutions, including Contract, Permanent (Direct) Hire, Managed Solutions, and Mobile services.