How Much Does a General Contractor Cost?

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Hey y’all! Can you believe it’s already June?? In the last month, we continued construction on the Franklin Road and Cooks Hill projects (you can see progress here), attended the Interior Design Society’s virtual conference (always gotta stay on top of the industry!), and on a personal note, we celebrated my girls’ Sweet 16. I know… why can’t they stay little forever?!

But today, I don’t want to talk about our projects… I want to talk about your project. Because if you’re planning an addition or a smaller renovation (such as a single kitchen or bathroom), you will want to start NOW if you hope to have it done by Christmas!

Y’all know that the most successful projects start with a thorough plan, so this week’s topic is all about budgeting — nope, not for the renovation itself (which I shared here), but budgeting for those talented folks who will bring your home to life. (Believe me, it’s worth the investment in people who do things right the first time!)

Today, we’re going to talk about…

  • What’s included in a GC’s service fees
  • Various ways GCs charge for their services
  • How we do things at Superior Construction & Design
  • Typical project costs for new builds, kitchen remodels, and bathroom renovations

I know money talk isn’t nearly as exciting as decorating tips and inspiration, but it is SO important to your success! So stick with me y’all, and let’s make this as fun as it can be. 😉 

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What is included in a General Contractor’s service fees?

Let’s start here, because most people believe that GCs simply manage and construct your project. This is true, but this definition only scrapes the surface of what we actually do behind the scenes…

We are neck deep in documents and permits… We bring in subcontractors (electricians, plumbers, etc.) that we know and trust…. We lead the project, renovate and build, travel to and from your site, do quality control as we go, communicate with you, and keep everything as on-time and in-budget as humanly possible.

Sounds like a lot, BUT… that’s not even all of it, y’all! 

When you think about a GC’s fees, remember that you are working with a local small business. In addition to everything we’re doing above, we also have travel expenses, taxes to pay, a staff to support (who all make a livable wage), overhead (office and tech expenses, our accountant, etc.), and more. 

Whew! Now, that’s a lot! Like any business — from a law office to a medical center to your favorite restaurant in Mt. Juliet — all of these are wrapped into the service cost. It’s the only way to stay in business and keep serving our communities! Welcome to my world. 🙂

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How do General Contractors charge for their services?

Alright, now that you know what you’re paying for, let’s talk about how GCs charge. You know I love giving you straight answers, but it’s hard to give you just one. Each GC has their own method of working and charging for their services. Most GCs I know use one of these two pricing structures:

1. The Flat Fee Model

GCs who charge a flat fee will usually sit down with you at the beginning of your project, lay out the scope of the work and your budget, look at the materials and features that will be going into the space, and give you a flat quote (bid) for their everything — labor, materials, and their services.

Pros: You know exactly what your out-of-pocket expenses will be for the project, and it will not vary as the project progresses, as long as you adhere to the agreed upon scope of work. 

Cons: Your investment will likely be higher with a flat fee rate. 

2. The “Cost Plus” Model

With this fee structure, your GC will charge you a percentage of your project’s total cost. While you will have the same preliminary conversations with your GC (discussing scope, budget, materials, features, etc.), the cost of your project will be an estimate. This is because things like the price of materials or shipping can fluctuate from week to week, month to month. 

Pros: Your investment in professionals is directly proportional to the scope of work being done, and your GC will likely be happy to make any updates to your project or scope of work, since they will be fairly compensated for them.

Cons: As I said, you won’t know the exact cost upfront, only a very close estimate. We tend to estimate high to be safe, so oftentimes our estimates are higher than the actual cost ends up being. (Who doesn’t love that?!)

Don’t forget to factor in the human connection…

Before we move away from fee structures, I want to remind you that when it comes to your home, you really do get what you pay for. Although it is smart to meet with multiple GCs to find the best fit for you, I would not recommend making a decision based solely on price. 

Being smart with your investment means choosing the right people.

Your GC and their teams will be inside your home, building your dreams (for upwards of a year, depending on the project!), and allocating your budget to the project’s various expenses. You want someone who is experienced and trustworthy… someone you have a connection with!! 

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Which fee structure do we use at SC&D?

Y’all know I love transparency! At SC&D, we use the “cost plus” model. (Could y’all tell which way I was leaning based on my pros vs. cons list?) 

I believe that this is the best option for our clients and for my business. For me, it’s much easier to keep up with, it’s transparent, and it’s fair compensation no matter which type of project we’re working on.

So… “cost plus” what? 

Our clients pay whatever the cost of the project is plus 25%. We use these funds to lead and manage everything I mentioned in the first section, all while upholding our high standards of quality, longevity, and professionalism. (I love my job!!!)

What are some typical project costs?

Okay, we’ve made it to the final section. Grab your calculators, y’all! Since you now know that we charge “cost plus,” I figured I’d give you a quick breakdown of some typical project costs and let you do the math on the GC part. 

Of course, these estimates can vary greatly based on your wishes for the space (quality of materials, fixed features, etc.), so I HIGHLY suggest sitting down with us to crunch the numbers before you make a decision.

superior construction and design lebanon, tn general contractor cost new build cost based on materials and what you are adding

New Builds

In this area (Lebanon and Mt. Juliet, TN), new builds cost around $175-$200 per square foot. However, that number can vary greatly, again, based on what you’re adding into the home and the materials you choose.

Kitchen Renovations

For a full kitchen renovation, including your floors, appliances, and cabinets, you can expect to spend about $50K on the renovation alone (not the people). If you’re adding custom work, moving walls or plumbing, or selecting high-end appliances and materials, this number can go up.

Here’s another way to calculate it… according to the National Kitchen and Bath Association (NKBA), a kitchen renovation will cost about 10-25% of your total home value. So renovating the kitchen of a $500K home would likely require an investment of $50K-$125K.

Bathroom Renovations

Bathroom renovations are typically smaller than kitchens, don’t require appliances, but DO have plumbing features that may impact your overall cost if you move them. I’d say most bathroom renovations fall around $15-20K or more, again, depending on what you want in there and how much is getting changed. Moving plumbing or walls is always a bigger investment.

From a percentage standpoint, the NKBA says that a master bathroom remodel will typically cost 5-10% of your total home value. So renovating a master bath in that $500K home would require an investment around $25K-$50K.

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What’s Next?

Once you have a general idea for how much you would like to spend on your project, it’s time to reach out to the professionals who can make it happen! In our initial conversations, we will be very transparent with you, looking at the numbers, talking about your goals, and sharing our thoughts on your next best steps for getting you the home of your dreams.

I invite y’all to reach out to us if you’re ready for a project, but if we’re not the right team for you, that’s okay, too.

If there’s anything you take away from this post, I hope it’s that hiring the right people will make all the difference in how smoothly your project runs, how well your investment is spent, and your level of success. 

Home is something close to my heart, and I want nothing more for you than to live in a place where you feel genuinely happy and at peace every single day. Have questions? Need help? I’m here for y’all.

Much love,

6 replies to “How Much Does a General Contractor Cost?

    • hey Dana!
      that’s a great question!
      our design fees are separate from our GC fees:)
      thanks for reading and great question!

  • Great post Elizabeth. As I move further an further into whole home renovation with each new project these are costs I’ll need fo be discussing with clients. How do you assess design fees for large projects. Is it different for new construction vs. existing homes ?

    • Thanks Rebecca!! I’m happy you found this helpful:)
      Yes, we charge differently for design in large projects- in new construction we charge by the square footage, and that’s based on the area.
      For instance, a kitchen is a larger sf amount than a guest bedroom because of the scope of decision and planning required in that area.
      Loved spending time with you last week- hate I didn’t get to see you before I left!

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