Budgeting for Commercial Roof Repair
Getting ready to bid out commercial roof repair or replacement? Your first instinct is likely to withhold budgetary information due to fear of overpaying. But that reasoning is flawed, and here’s why…
Many people have worked closely with a real estate agent on purchasing a home. During the process, they reveal to their agent details such as preferred location, must-haves, and—most important—budget. After all, there is no sense wasting time looking at a home that is not affordable.
The same is true concerning commercial real estate transactions, whether it’s for the purchase of an existing property or land for new development. The search and sale depend on budget.
Yet when it comes time to repair or maintain property, discussing budget suddenly becomes a sensitive matter. If this sounds familiar, you’re not alone. We all want the best deal from contractors. And if we disclose budget, they will likely charge the same amount even if the work costs less, right?
In truth, it’s not an issue of right or wrong. At the heart of the matter is mistrust. If you don’t have a true partnership with your vendor, it’s impossible to feel like you are getting what you pay for. So rather than helping the bottom line, withholding budget information could hurt it.
Withholding budget hurts:
Time Lost – Withholding budget creates a lot of additional work and time lost during the bid phase. If numbers do not match expectations, the contractor must revisit the site and revise scope of work until an agreement is reached.
Too Many Options – Without a budget, contractors will likely provide multiple options. While both a waste of time and potentially the wrong solution, multiple options also create confusion. When negotiating, limited options provide the clearest path to the best deal and solution. (Read more on that topic from Harvard Law.)
Compromised Solutions – If budget isn’t disclosed, it’s commonplace for contractors to assume there is little money. This results in an inexpensive repair solution. While attractive from a pricing perspective (and potentially under budget) it may not address the underlying problem. Typically, a full understanding of the problem and the resources to solve it (including budget) equates to a better scope, result, and value.
Partnering provides relief:
The mindset of holding cards close to the chest often leads to frustration, loss of valuable time, and compromised solutions. All of which create discord and weaken the relationship between contractor and client.
Instead, take time to vet honest, competent contractors and partner with them. True partnership involves discussing all aspects of the project and budget. When all variables are known, your contractor can work with you to create the best outcome and the roadmap to get there. Learn more about this process in our next blog which focuses on partnership.
