There are several reasons for the high prices, including inventory shortages, manufacturing issues, supply chain disruptions, wildfires, tariffs, and the strong demand for materials. And worst of all, no one knows how long this will last. But one thing is sure—contractors must be on top of their game to keep their businesses moving forward.
I have never seen anything like the shortages and rapid price increases of building materials that are occurring today.
There are several reasons for the high prices, including inventory shortages, manufacturing issues, supply chain disruptions, wildfires, tariffs, and the strong demand for materials. And worst of all, no one knows how long this will last. But one thing is sure—contractors must be on top of their game to keep their businesses moving forward.
Listed below are a few tips to consider in these unprecedented times:
- Stay in contact with your suppliers for weekly updates on material prices and availability. Your suppliers are also in communication with other contractors in your area who are in the same boat. You may pick up a tip or two from them.
- Research different options for materials and lead times for delivery. This can include interior and exterior finishes as well as roofing. For example, you could consider prefab framing components versus traditional stick framing, precast versus block versus pre-engineered, steel versus wood studs, or trusses versus post and beam.
- Your bid process is critical this season. You may need to shorten the time to hold your pricing from 90 or 120 days to 30 days. Shortening the project schedule from 16 weeks to 13 weeks may also help.
- Contracts are very important. A construction attorney can help with drafting and understanding them, especially when it comes to contingencies for material cost increases, which may be drafted under a force majeure clause.
- Upfront communication with your client can help create a win-win situation. Being transparent about the industry situation can help avoid problems with price increases or material delays. Understanding your clients’ needs and desires can help you formulate options to present to them. They may want to complete the project in phases.
- Relationship capital can be leveraged to explain the situation to the right person. An established working relationship can speak to your character, integrity, and value. Use it—you’ve worked hard to develop it.
To see how else Beck Insurance Agency can help your contracting business, call 419-446-2777, email us at help@beckinsurance.com, or click here.
