When facility managers are searching for industrial painting contractors to perform certain tasks in the facility, they are often provided with price proposals which vary from one contractor to another. Should this be the case? If the same tasks will be performed to complete the same job, why are they bidding with different asking prices?
The answer is because industrial painting contractors have different operational and business expenses. Their own unique business environment is influenced by many factors, which influences their pricing scheme.
There are major expenses that contribute to the industrial painting contractors’ total overhead costs. The more capable the workforce, the greater the knowledge base, experience and certifications, as well as higher limit insurance coverage that a company offers, the greater the overhead costs.
Overhead costs such as highly-skilled workers salaries and benefits, office expenses, rental fees, office supplies, utilities, are incurred to maintain the company offices. Since contractors spend most of their time going to and from client sites, another frequent overhead cost are transportation-related travel and vehicle maintenance costs.
As with any successful company, overhead expenses are considered and built in accordingly to all contracts to enable industrial painting contractors to make profits and stay in business.
Industrial painting contractors have to pay the obligatory taxes if they wish to continue conducting their business legally.
Insurance plays a big role in overhead costs. Small companies that are family-run and only employ family members often don’t have the huge expense of workers compensation insurance. General liability limits and coverage vary significantly and it is advantageous to see what limits a potential contractor can provide your facility.
Licenses, application and manufacturer certifications, safety training and compliance with local, state and federal safety requirements are more costs that contractors incur. These costs, as all overhead costs, may not be visible in the bid price quotation, but are some of the drivers of the total project cost charged by painting contractors to clients.
Soaring material costs, increasing competition and a changing market environment present new challenges for industrial painting contractors to earn a decent profit. Close consideration of their earnings and expenses balanced with clients’ budget allocations can vary the profit margin for the company.
To attract new clients, contractors spend for advertising in newspapers, local phone directories, and in the Internet to promote their business.
When working on a client project, they incur material, labor, and travel expenses. Travel expense is affected by rising fuel costs, toll fees, and vehicle maintenance. Material costs, on the other hand, are acquired at every stage of the project from surface preparation, application and post-application, with quality materials costing higher than sub-standard ones.
Facility managers should estimate the profit and expense rates of bidding industrial painting contractors in order to obtain the fairest project price from them.
Because of the varying price rates of industrial painting contractors, facility managers should consider 3 to 5 price quotations from differently-sized painting companies. A price comparison from these short-listed companies helps facility managers make a more informed decision which of these industrial painting contractors is price-right for the project. But facility managers should be cautious of industrial painting contractors who price the lowest, because this may be a ploy to simply win the bid, but results in poor workmanship, cutting corners during the project. Low bidders often plan on implementing changes to the scope of work during the project to increase the overall contract price. Skills and experience should remain the major factor for the contractors’ costing.