Question 1

What do most general contractors charge per hour?

Accepted Answer

The average cost of a general contractor typically involves a fee ranging from 10% to 20% of construction costs for large projects, while small jobs are charged at a fixed, daily, or hourly rate, with contractor hourly rates averaging between $50 and $150 per hour.

Question 2

Why do general contractors charge so much?

Accepted Answer

The value of a good general contractor encompasses high-level service that enhances the likelihood of a positive experience, as quality home improvement services often entail substantial investments in hidden details, making them comparatively more expensive due to the need for significant resources such as time, expertise, and money.

Question 3

How much does a handyman make an hour in Arizona?

Accepted Answer

As of October 13, 2023, the average hourly pay for a Handyman in Arizona is $25.12 per hour.

Question 4

Do general contractors negotiate?

Accepted Answer

In the competitive landscape, many contractors are open to reducing their costs or negotiating specific contract terms, as demonstrated by a recent Angie's List poll in which over 80% of contractors expressed their willingness to lower prices in order to secure a job.

Question 5

What is the normal markup for a general contractor?

Accepted Answer

As a general contractor, your profit margin typically ranges from 7% to 20% or more, representing the amount remaining after covering all job-related costs, and this margin is commonly calculated as a percentage markup on expenses.

Question 6

Do contractors mark up materials?

Accepted Answer

Contractors must apply markups to the materials they acquire for each project to account for expenses related to purchasing, sourcing, storing, and transporting these materials to the construction site, and the extent of these markups can differ between contractors and even between different projects.

Question 7

How far off can an estimate be?

Accepted Answer

An estimate serves as an approximation, and it's not uncommon for the final cost to exceed the estimate by anywhere from 5% to 20%, underscoring the importance of adhering to your budget and allowing for a contingency buffer when embarking on any project.

Question 8

Is it normal to pay 50% upfront?

Accepted Answer

Deposit arrangements should ideally be mutually beneficial, with some projects necessitating a 100% upfront payment for those below a certain value, while the most prevalent deposit structure consists of 50% paid upfront and the remaining 50% upon completion, although it may not be without its imperfections.

Question 9

Is it normal for a contractor to ask for money up front?

Accepted Answer

Offering deposits to contractors is a fundamental and typical part of commencing a renovation project, with exceptions and potential flexibility depending on the contractor, and below, Sweeten provides insight into the rationale behind upfront payment requirements and suggests negotiation options for your contractor's deposit.

Question 10

Is it normal for a contractor to ask for a deposit?

Accepted Answer

The standard practice is for a contractor to request a deposit amounting to as much as one-third of the total project cost, with the exception of California and Nevada, where state law restricts down payments to 10% of the total estimated job cost or $1,000, whichever is less.

Question 11

What can a handyman legally do in AZ?

Accepted Answer

You are required to obtain an Arizona handyman license for work exceeding a value of $1,000, while tasks such as painting, drywall, and furniture assembly, falling below this threshold, do not necessitate a license.

Question 12

What type of work can a handyman do legally in Arizona?

Accepted Answer

In Arizona, unlicensed handymen are permitted to perform tasks like installing drywall, assembling furniture, repairing windows, installing doors, and replacing fixtures.

Question 13

What is the rule of thumb for negotiation?

Accepted Answer

"Know thyself," including your negotiation boundaries, the value you assign to relevant issues, and strive to optimize outcomes for your benefit.

Question 14

What percentage do most contractors charge?

Accepted Answer

General contractors typically charge between 10 to 20 percent of the total construction project cost, and for larger projects, this percentage may approach 25 percent, with current average contractor rates outlined for the United States.

Question 15

How much should I be charging as an independent contractor?

Accepted Answer

To calculate your hourly rate, you can follow a standard formula taught in business schools, which involves summing your labor and overhead costs, adding the desired profit, and then dividing this total by the hours worked, representing the minimum rate necessary to cover expenses, provide a salary, and generate profit.

Question 16

How much more should I ask for 1099 vs W2?

Accepted Answer

1099 contractors are responsible for paying both the employee and employer portions of payroll taxes, which can be approximated by adding/subtracting 7.65% (half of the total FICA taxes) in a straightforward manner when comparing 1099 and W2 pay differences for an hourly rate.

Question 17

What do most contractors charge per hour?

Accepted Answer

The average cost of a general contractor typically involves a fee ranging from 10% to 20% of construction costs for large projects, while small jobs are charged at a fixed, daily, or hourly rate, with contractor hourly rates averaging between $50 and $150 per hour.

Question 18

What are the disadvantages of Thumbtack?

Accepted Answer

Common complaints regarding the use of Thumbtack for lead generation encompass high lead costs, low close rates, an inability to target specific customers, and the experience of receiving leads that are frequently unqualified or do not align with their criteria.

Question 19

What is the markup for a general contractor?

Accepted Answer

The profit margin for a general contractor typically ranges from 7% to 20% or more, representing the amount remaining after covering all job-related costs, and this margin is commonly calculated as a percentage markup.

Question 20

How much of a project cost is labor?

Accepted Answer

Based on the industry-standard Construction Labor Market Analyzer (CLMA), construction labor costs typically constitute between 20% and 40% of the total project budget, encompassing expenses such as wages and additional items like payroll taxes and paid time off.

Question 21

Is there a legal difference between a quote and an estimate?

Accepted Answer

It's important to note that estimates serve as rough price approximations and should be considered as initial guide prices, while quotes are legally binding and should only be utilized when you are confident in the cost accuracy.

Question 22

What's the difference between a quote and an estimate?

Accepted Answer

An estimate provides a rough estimate of job costs, while a quote is a more precise figure, and once you accept a quote, the contractor is obligated to complete the work at that agreed-upon price.

Question 23

What not to do with contractors?

Accepted Answer

To avoid crossing the legal line and potentially misclassifying workers, refrain from assigning employees to assist the contractor, providing dedicated workspace, offering paid time off or benefits, engaging in long-term collaborations with the contractor, or having the contractor handle core business functions.

Question 24

What is contractor negligence?

Accepted Answer

Contractor negligence refers to instances of gross negligence or willful misconduct that have undergone dispute resolution as stipulated in the relevant Cooperation Contract.

Question 25

What does 25 upfront mean?

Accepted Answer

An upfront payment policy, commonly employed by contractors, freelancers, and service-based businesses, entails customers paying a deposit either before the project begins or upon its completion, with upfront payments typically taking the form of either flat-rate deposits (e.g., $1,000) or percentage-based deposits (e.g., 25% of the total estimate).

Question 26

Should you pay a contractor 50% up front?

Accepted Answer

Requesting an upfront payment exceeding 50% may raise concerns, but it's worth noting that the majority of contractors, as indicated by a nationwide Angi poll, do request down payments for projects, and many are open to negotiating down payment terms.

Question 27

Should you tell a contractor what your budget is?

Accepted Answer

An esteemed remodeling contractor will typically inquire about your budget to assist you in maximizing the value of your investment, so it's advisable to be transparent and forthright when asked about your budget.

Question 28

What is the average hourly rate for a handyman in AZ?

Accepted Answer

As of October 14, 2023, the average hourly pay for a Handyman in Arizona is $25.12 per hour.

Question 29

How much work can you do without a contractor license in Arizona?

Accepted Answer

Generally, contractors are required to be licensed in cases where labor and materials exceed $1,000 or when a permit is necessary, irrespective of the labor and materials cost, and for detailed information, reference the Arizona Revised Statutes on "Persons not required to be licensed; penalties; applicability" ARS §32-1121.

Question 30

Does a handyman need a business license in Arizona?

Accepted Answer

In general, a contractor's license is mandated for projects amounting to $1,000 or more in combined labor and material costs or when a building permit is necessary, and individuals exempt from an Arizona Registrar of Contractors' (ROC) license must include the phrase "not a licensed contractor" in their advertising.

Question 31

Do I need a contractors license in Arizona?

Accepted Answer

For any business engaging in contracting activities related to building, altering, repairing, adding to, subtracting from, improving, moving, wrecking, demolishing, or working on any building, highway, road, railroad, excavation, structure, development, or improvement, it is mandatory to hold a contractor's license.

Question 32

Can a handyman install a water heater in Arizona?

Accepted Answer

While technically anyone with the necessary tools and knowledge can install a water heater, it is advisable to have a licensed plumber perform the installation for optimal results.

Question 33

Do subcontractors need a license in Arizona?

Accepted Answer

In Arizona, the majority of construction contractors, including both prime contractors and subcontractors, are required to be licensed by the Arizona Registrar of Contractors, with certain exemptions, and obtaining a contractor's license entails submitting an application demonstrating the successful completion of one or more written exams, meeting relevant experience prerequisites, and securing adequate bonding.

Question 34

Should contractors ask for money up front?

Accepted Answer

Contractors are prohibited from requesting a deposit exceeding 10 percent of the total job cost or $1,000, whichever is lower, applicable to all home improvement projects, including swimming pools, and it's important to adhere to the scheduled payments without allowing payments to surpass the work completed.

Question 35

Should you ever pay a contractor in cash?

Accepted Answer

Paying independent contractors in cash is not illegal, but it may become burdensome as you would need to provide evidence of legitimate reasons for cash payments in case of an IRS audit.

Question 36

What is the 70 30 rule in negotiation?

Accepted Answer

Stuart recommends the 70/30 rule in negotiations, advocating for listening 70 percent of the time and speaking for only 30 percent, as it grants more control over the dynamic, often proving effective to say less in many instances.

Question 37

What is the 80 20 rule in negotiation?

Accepted Answer

The success or failure of most individuals in a negotiation hinges on their level of preparation, with the 80/20 rule emphasizing that 80% of the process is dedicated to preparation, while the actual negotiation with the other party comprises the remaining 20%.

Question 38

What are the 4 C's of negotiation?

Accepted Answer

In the realm of cross-cultural business negotiations, the four Cs of negotiation—common interest, conflicting interest, compromise, and criteria—prove to be universal factors present in all business deals, irrespective of cultural nuances.

Question 39

Should I accept first salary offer?

Accepted Answer

Avoid simply accepting the first job offer, as doing so might lead to an unfavorable outcome; instead, keep in mind that, unless explicitly stated otherwise, employers generally anticipate salary negotiations, and you should never hesitate to propose a counteroffer.

Question 40

What is typical general contractor mark up?

Accepted Answer

The profit margin for a general contractor represents the amount remaining after covering all job-related costs, typically calculated as a percentage markup, with the average markup ranging from 7% to 20% or higher.

Question 41

Do you pay more taxes as a 1099 or W-2?

Accepted Answer

Presently, employment taxes, totaling 15.3% of a worker's gross wages, are divided between employers, who contribute 7.65%, and W-2 employees, with the remaining portion withheld from their paychecks, while 1099 contractors are responsible for the full 15.3% payment from their earnings.

Question 42

How much is $20 an hour on W-2?

Accepted Answer

When hiring a W-2 employee at $20 an hour, the actual cost to the employer is approximately $21.50 per hour due to payroll taxes, whereas 1099 workers receive higher wages as they are responsible for covering the entire payroll tax burden themselves.

Question 43

Can I give someone a 1099 if I paid them cash?

Accepted Answer

By law, if you provide services to an individual or company and receive $600 or more in unreported income within a year (whether paid in cash, check, trade, or credit card without tax withholdings), they are obligated to issue you a 1099-MISC form.

Question 44

How many quotes should you get from contractors?

Accepted Answer

For homeowners seeking assurance in their selection process and lacking a pre-existing relationship with a contractor, it is advisable to obtain three quotes before making a decision.

Question 45

What is the average overhead for a general contractor?

Accepted Answer

Lower overhead percentages are advantageous for overall business profitability, with average construction overhead costs typically around 10%, although this figure can fluctuate based on project size, wherein larger projects tend to have higher overhead, while smaller ones have lower overhead on average.

Question 46

How do you calculate a 100% markup?

Accepted Answer

The markup percentage is determined by dividing an item's gross profit (calculated as the item's price or revenue minus its production cost or cost for resale) by its cost, with the result converted into a percentage by multiplying it by 100.

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