Our Approach to Pricing a Kitchen – CCI Management Memo

At Custom, we’ve been doing kitchen renovations since 1990. Someone here is preparing a proposal for a kitchen renovation most every day. And yet, accurately pricing out these projects is always tough.
As a design/build contractor, our first responsibility is to give you a preliminary estimate of what we’ll charge to complete your project. Then, you can let us know whether we seem to be a good fit budget-wise.
In order to put together this initial estimate, we must sit down with you
to get a feel for what you have in mind. What are your overall project
goals? What kinds of products do you want to incorporate?
Some customers are very specific on both counts. Others, however,
are more vague — particularly when it comes to products. They might
say they like a certain countertop material, for instance, or some color
scheme for the backsplash tile. With so many products and accessories
to consider, though, it’s unrealistic for most homeowners to have all
the decisions made so early on.
Based on the information we gather, we get to work on pricing. During
this process, we often have to draw on our vast experience to make
assumptions about the products you want to use. So if you told us you
like Shaker style cabinets, we’ll try to choose a model that we think
fits the bill.
As you can imagine, it can be quite difficult for us to make that call.
However, it’s a necessary step for us in order to come up with that
preliminary estimate.
Which brings us to the issue of allowances.

 

Understanding Allowances
Keep in mind: The purpose of that preliminary estimate is to confirm
our projected budget is even in the ballpark of what you want to spend.
The assumptions mentioned above factor in to the initial allowances —
i.e. the amount we set aside to purchase certain products. For example,
we might establish allowances of $12,000 for cabinets and $5,000 for
countertops based on what you’re telling us.
At this point, the allowances are not considered final. It’s important to
understand a few things about allowances:

 

  • They’re based on specific models or products, which we will stipulatein our preliminary estimate. If another contractor quotes a lower allowance, there’s a very good chance they’ve assumed a different model or product.
  • If you later change your mind about your selection, that will affect
    the allowance amount. For instance, the costs for a sink can vary
    widely, from a basic model at a typical supplier to a luxury alternative
    from a high-end manufacturer. Should you switch from the
    former to the latter, your allowance will change accordingly.
  • Allowances can’t be finalized until you’ve finalized all your product
    selections, which generally happens closer to project kickoff.

Please note: Our pricing, including allowances, reflects the quality
of the products and vendors that we deal with. When you go to an
F.W. Webb or Roma Tile, you can rest assured the products are of the
highest quality and covered by warranty — and that the service will
be excellent. Better yet, because these are preferred Custom vendors,
you’ll receive significant discounts off list prices.
Why do we send homeowners to certain vendors? There’s no financial
gain for us. Rather, we know you’re going to be happy with the products
we use — and it’s much less likely you’ll need to call us back to
fix something that’s broken.
Ultimately, pricing out a kitchen product is an imperfect science. We
hope you now have a better understanding why.

 

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Custom Contracting, Inc. 1267A Massachusetts Ave. Arlington, MA 02476 Phone: 781-648-2835 Fax: 781-648-0907 Email: cci@custom-contracting.com

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