Table of Contents
- Materials: Constant States of Change
- Labor: The Right People for the Job
- Permits, Prep Work and Rentals: Other Miscellaneous Job-Related Costs
- Overhead: Everything Else That Makes Your Business Go
- Profitability: Because You’re in This to Make Money
- Reducing the Time You Spend Estimating Drywall Installation Costs
Drywall Hanging & Taping: the Complete Guide
In the United States, the estimated cost of drywall installation costs can vary greatly. Though residential jobs tend to vary from $955 to $2547, with an average for 1,000 square feet at $2,290, the area of the country, contractor, and specs for the job tend to drastically impact the overall cost of the job. Adding specialty material such as greenboard or Class X drywall for fire resistance or adding features that require special skills such as archways can increase the price, and cities in the northeast such as New York City and Philadelphia tend to have the highest labor and material costs in the country, drastically increasing the cost of having drywall installed on your project. On a per-square-foot basis, the average range for drywall installation costs is between $1.60 and $2.35, with outliers at $1.20 and $3.00 on the low and high ends of the range. But how do you determine the exact cost for your next project with the rapid changes in material costs, labor, and similar aspects of your total project costs? This guide will delve into all of these areas to help you determine the cost of your drywall project, as well as ways to save time so that you can spend more time making money and less time chasing projects.
Materials: Constant States of Change
What kind of drywall is needed for the job? Three-eighths, half-inch, and five-eights are the mainstays of most projects, with some specialty archways and similar projects requiring quarter-inch. Do you need greenboard for a damp area such as a break room, bathroom, or pool\? What about heavy sheets of class X for separating working spaces from manufacturing or other fire-prone areas to provide additional protection against the fast spread of fire in a structure? Can the entire project be handled with 4×8 sheets or do you need to get 10′, 12′, 14′, or even 16′ panels that will be harder to handle? Understanding all of the materials that will be required for the specs and codes of the project is a vital part of creating a solid estimate of drywall installation costs.
Another aspect to consider is how material prices can rapidly change. When Hurricane Katrina swept through Louisiana and Mississippi, the cost of purchasing materials nationwide went up. Factories went into overtime to produce enough material to meet the massive demand pouring into the area following the disaster. In addition to homes and businesses being wiped out, production facilities for materials were also impacted. It’s estimated that building material costs rose between 10-20% following the hurricane over the following 12-24 months, depending on the exact material in question.
Generally speaking, you want to lock in prices for your estimate to ensure you can receive that price when it’s actually time to build, but it can be a pain requesting a quote from your supplier every time you have a project come up. This extra work is the reason many contractors fail to get quotes from suppliers, which can lead to problems if there is a sudden national shortage of that building supply following a natural disaster, manufacturing plant fire or similar issue that causes a shorter supply than is usually available.
Labor: The Right People for the Job
Having the right people on your crew makes a big difference in the cost, efficiency, and profitability of the job. An experienced drywall hanger may cost a little more, but they’re going to know when they can get multiple cuts out of a single sheet of drywall, will avoid making errors in placing outlet or switch box cutouts and are less likely to make mistakes in handling that will damage the drywall beyond reasonable use. Similarly, an inexperienced taper may take much longer to get the job done, so even though their hourly wage is less than that of an experienced taper, they will actually cost more in the long run because they move more slowly.
Using the same example of Hurricane Katrina above, following a natural disaster of this magnitude that requires a massive rebuilding effort, construction labor prices often rise dramatically following the disaster by a few weeks to months, when the rebuilding effort begins. Following Katrina, construction labor costs increased in Louisiana and Mississippi by 8-12%, depending on the exact location. Because of the high demand for qualified, experienced construction workers and the large amounts of overtime that was needed to get the region back on its feet, the high increase in construction labor costs was often borne by the contractor in the hope of making money while there was plenty of work that needed to be done.
In a similar vein, your specific region may be undergoing a faster or slower economy than usual. Going into 2020, it was anticipated that qualified, experienced construction labor was going to continue to be very hard to find, and for the first few months, this was true. However, the advent of COVID-19 and the related economic fallout that was caused by required shutdowns and loss of business stability caused a rapid slowdown in the industry, even though construction was still considered to be an essential service and didn’t fall under the limitations that many other industries faced.
Permits, Prep Work and Rentals: Other Miscellaneous Job-Related Costs
Beyond simple labor and materials, there are a number of other miscellaneous job-related costs that your business wouldn’t incur unless you were working that specific project. Permits for the project, extra labor, and expenses for having prep work done in advance of drywalling, renting a scissors lift to get to that high cathedral ceiling, buying lunch for your crew on a fast-track project, additional insurance for high-profile projects and any number of other expenses can eat away at your profitability if you don’t take them into account. When you’re estimating a new job, it’s important to consider every potential expense so that you’re including everything.
As an example, you’ve got a project working on a cathedral ceiling, which you haven’t done very much of in the past. Instead of a simple ladder or stepstool to reach the ceiling, your crew now needs to rent a scissors lift or a scaffold to get materials into place. Because of the height, OSHA regulations may require a safety harness for each worker. If you don’t already have that in your tool kit, you’ll have to pay to buy it, often costing a few hundred dollars per worker depending on the style and features in the harness. It’s a fast-track job, so even though you’ve added overtime into the project for your labor costs, did you remember to leave a few hundred bucks available for pizza or subs to keep everyone working well into a 12-hour shift?
Though these costs can be somewhat small individually, overall they can lead to a much higher cost when added together. The above example may well have $3,000 or more in miscellaneous costs that you may not have taken into account when preparing your usual estimate using a labor plus materials plus profitability formula. However, that’s not necessarily the extent of your expenses for this project. Overhead also needs to be taken into account which, depending on how busy you are, may eat substantially into your profitability.
Overhead: Everything Else That Makes Your Business Go
Overhead includes all of the expenses that you need to keep your business in operation, regardless of whether you have any jobs to work. The cost of estimating projects to keep work coming in, your office staff expenses, computer and IT costs, insurance, vehicle payments, rent or mortgage payments, association dues, magazine subscriptions, utility payments, replacing or repairing tools that are used across multiple projects, even coffee for the office break room. Outside expenses can include software subscriptions, working with a marketing agency to keep business coming in without a lot of work on your end or the money paid to an accountant to prepare your business taxes.
These expenses can often be cut back during hard times, such as canceling magazine subscriptions or membership in some associations, reducing the number of office staff you have or reducing the items available for employee use in the break room, but they can’t be eliminated entirely without closing down the business. Without a truck to haul crew, tools, and materials, how will you get what’s needed to the job site? Without the associations that you’re a member of, how will you hear about new local projects? Without a bookkeeper or receptionist, how will you stay on top of the back-office work or contact with new prospects?
It’s important to keep overhead expenses as low as possible to keep those expenses from cutting too strongly into your profits. However, it’s also important to remember what keeps your company growing and in business. Will your employees respond poorly to being asked to provide their own refreshments at work? How will you handle estimating new projects if you don’t have an estimating team or by paying for that estimating software month after month? If you put off repairing tools that need work, will it result in more expensive repairs down the road? Though each of these issues is a matter of balance, finding the right balance to keep your business operating efficiently is a vital part of your company’s success.
Profitability: Because You’re in This to Make Money
It’s important to remember to add a profit to your drywall installation costs, because you’re in this industry to make money, right? Though many people get into work they generally enjoy, they typically wouldn’t keep doing it if they weren’t being paid for it. Businesses exist to provide you and your family with a livelihood on your own terms. If you don’t build profitability into your projects, you’re only making a hand-to-mouth existence, not making headway into your dreams. Make sure that you take time every year to lay out your goals for the year, then determine how you’re going to reach those goals on a quarterly, monthly, weekly, and daily basis. As an example, if you know that you want to grow your business by 25% this year, you know that you need to make 25% more contacts on a daily basis, set up booths at 25% more trade expos and estimate 25% more jobs. Can you outsource the work to keep you on the job site?
As a business owner, you wear a lot of hats to keep the doors open and your business operating successfully. That dedication to your company means a lot of long hours spent strategizing and figuring out the best plan of action to move your company forward, hours that are unbilled in any fashion. By having profitability built into your projects, you can enjoy the fruits of those unbilled hours in the form of capital gains, business profit, and a nice payout at the end of your tax year. You’re able to put money back for hard times for your company, for college for your kids, and for your retirement dreams, whether that’s just puttering in a workshop at home, spending time with the kids, or even enjoying the good life traveling the world in an RV.
But adding profit margins into your drywall installation costs goes beyond making money and giving yourself a reward for your hard work. If you didn’t have that profit margin in place during the past few good years, would you be able to get through some of the harder times now? Being able to invest money back into your business means that when times are tough, you have the resources to keep your crew moving, accept jobs with lower profit margins, pay the overhead bills and buy materials when you see a great price available in a clearance sale or supplier closeout. It could even put you in a solid enough position to buy out a competitor, giving you rapid growth and the ability to extend your company’s reach significantly.
Reducing the Time You Spend Estimating Drywall Installation Costs
Of course, the more time you spend in the office estimating potential future projects increases your overhead costs, which in turn eats into your profitability. Running a successful drywall company means you need to be competitive, but that doesn’t mean that you need to sacrifice profitability to be competitive! Many businesses have turned to estimating software to improve their turnaround time and reduce overhead, but that still leaves you needing to learn how to use often complicated estimating software. What’s more, you’ll have to trust the software to catch every aspect of the project and that no errors will be made in the process, whether through human error or the virtual software not comprehending the many real-world issues that are common on construction sites, such as material damage, installation mistakes or delays in the construction process.
Simply uploading plans won’t give you exactly what you need, even if the computer can manage the rest of the work, because it may miss important facets of the project, such as the difficulty in handling sixteen-foot sheets of drywall, the additional time required to curve and install quarter-inch drywall into a complex arch, the additional scissor-lift rental needed to finish a fast-track job because the electrician has been running behind or any number of other issues that can come up on a job site. A computer simply estimates time and materials, then adds in overhead and profitability. Relying solely on the output of a computer without separate human input can quickly eat up any estimated profits on the project if you don’t catch errors or issues with the calculations before submitting your estimate. By having a solid understanding of exactly what factors tie into your overall drywall installation costs, you can ensure that you’re providing your clients with an accurate estimate of the total project costs. This helps you save time and effort later on when you’re estimating projects. However, even with the best estimating software, you’re still going to be spending time in the office instead of on the job, which increases your overhead and costs you money. What if you could decrease those costs while drastically increasing the number of projects you bid? 1Build delivers solid construction estimating services with a combination of artificial intelligence, human knowledge, and insider information on how the industry works. Simply upload your plans to our website, talk with us a few minutes on the phone while you’re headed to a job site so we understand your needs, then receive your estimate with intel on how to ensure your business is the one chosen for the job. Interested? Take a couple of minutes to request a demo and find out exactly how effective outsourcing your estimating process can be.