How to Quote General Contracting Projects

General Contracting Quotes Are Business Plans in Miniature

A general contractor's quote isn't just a price — it's a financial model for the entire project. You're coordinating materials, managing subcontractors, accounting for permits and inspections, building in contingency, and projecting a timeline that determines when you get paid.

Get the quote wrong and you lose money for months. Get it right and you build a reputation that generates referrals for years. Here's how to build quotes that work.

The Formula: Materials + Labor + Overhead + Profit

Every GC quote should be built from four components:

Materials: All supplies, fixtures, finishes, and consumables for the project. Get actual supplier quotes — don't estimate material costs from memory. Add 5%–10% for waste and damage. Labor: Your crew's hours plus subcontractor bids. For your own crew, use loaded labor rates (wages + taxes + insurance + benefits). Typical loaded rates:

• Skilled laborer: $35–$55/hour
• Lead carpenter: $45–$70/hour
• Project foreman: $55–$85/hour

Overhead: Your business operating costs allocated to this project. Include:

• General liability and workers' comp insurance
• Vehicle and equipment costs
• Office/admin expenses
• Licensing and continuing education
• Warranty reserve

Calculate your annual overhead, divide by expected annual revenue, and you get your overhead percentage. For most GCs, this is 15%–25% of job costs.

Profit: Your margin after all costs. Target 10%–20% net profit on each project. Below 10% and one callback or delay wipes out your earnings. Above 20% and you may be pricing yourself out of bids. Example: A kitchen remodel with $15,000 in materials, $20,000 in labor (your crew + subs), 20% overhead ($7,000), and 15% profit ($6,300) quotes at $48,300.

Subcontractor Markup

You coordinate, schedule, manage, and warranty your subs' work. That has value. Standard subcontractor markup is 15%–25%.

If your plumber quotes $3,500 for rough-in and finish plumbing, your customer sees $4,025–$4,375 for that line item. The markup covers:

• Your time coordinating their schedule
• Your liability if they damage something
• Warranty management (the customer calls you, not the sub)
• Payment processing and cash flow management (you often pay subs before the customer pays you)

Be transparent about the fact that you manage subcontractors — customers expect it — but don't itemize your markup percentage. Present sub work as line items in your quote at your marked-up price.

Milestone Billing: Structure Your Cash Flow

Never structure a GC project as "50% upfront, 50% on completion." For any project over $15,000, milestone billing protects both you and the customer:

Typical milestone structure:

• 10%–15% deposit at contract signing
• 20%–25% at demolition/rough-in completion
• 20%–25% at rough inspection passed / framing complete
• 20%–25% at finish work commencement
• 10%–15% at final walkthrough and punch list completion

This structure ensures you're never more than one milestone ahead of your costs. You have cash to pay subs and buy materials for each phase, and the customer retains enough unpaid balance to ensure you complete the punch list.

For larger projects ($100,000+), monthly progress billing based on percentage of completion may be more practical than fixed milestones.

TradeKit's quoting and invoicing tools support milestone-based billing — set up the milestones when you build the quote, and invoices generate automatically as each milestone is reached.

Change Orders: The Make-or-Break Skill

Change orders are where GC projects either stay profitable or go sideways. The average residential remodel has 3–7 change orders, and each one is a potential margin event — positive or negative.

Change order pricing formula:

Cost of additional work + markup (25%–35% on change orders, higher than the original contract margin) + timeline impact assessment

The higher markup on change orders is justified because:

• Changes disrupt workflow and require replanning
• Materials for changes are often rush-ordered at higher prices
• Subs charge more for out-of-sequence work
• Your admin time to document, quote, and manage the change has real cost

Change order process:

Customer requests a change (in writing — verbal doesn't count)

You scope the change and provide a written change order with price and timeline impact

Customer signs before any work begins

Change order is documented as an addendum to the original contract

Never — and this cannot be overstated — never do change order work on a handshake. "We'll figure out the price later" always means you absorb the cost.

Building the Detailed Quote

A professional GC quote should include:

Project scope and specifications:

• Detailed description of all work included
• Material specifications (allowances for finish selections)
• What's explicitly excluded

Cost breakdown by phase:

• Demolition
• Structural/framing
• Rough plumbing
• Rough electrical
• HVAC
• Insulation and drywall
• Finish carpentry
• Painting
• Finish plumbing and electrical
• Flooring
• Fixtures and hardware

Allowances: For customer-selected items (tile, fixtures, countertops, lighting), set specific dollar allowances per item. "Countertop allowance: $3,500" means the customer can select any countertop up to that price — anything over is a documented upcharge. Timeline: Phase-by-phase schedule with estimated completion date. Include a clause for delays outside your control (permit delays, material backorders, weather). Payment schedule: Milestone billing structure aligned to project phases. Contract terms: Warranty period (1–2 years on workmanship is standard), change order process, dispute resolution.

Common GC Quoting Mistakes

• Using allowances that are too low. If your tile allowance is $3/sq ft but the customer's taste runs $8/sq ft, you'll spend hours managing expectations and change orders. Set allowances at the mid-range of what the customer is likely to select.
• Not pricing permit time. Permits don't just cost money ($500–$2,000+ depending on scope) — they cost time. Inspection scheduling can add days to a project. Build both the fee and the time into your quote.
• Underestimating demolition. Demo is the phase where you discover what you're actually dealing with. Rotted subfloor, asbestos tile, outdated wiring — budget a 10%–15% demolition contingency.
• Quoting before plans are finalized. A GC quote based on "we're still deciding on the layout" is a guaranteed change order fest. Require finalized plans (or at least finalized scope) before presenting a firm quote.
• Not including a contingency line item. Every GC quote should have a 5%–10% contingency line item for unknowns. Customers who push back on contingency don't understand construction — educate them or walk away.

The Bottom Line

General contracting quotes are complex by necessity — you're pricing an entire project with dozens of variables. The GCs who build detailed, phase-based quotes with clear allowances, milestone billing, and a documented change order process are the ones who finish projects profitably and earn repeat business. The ones who ballpark it are the ones writing checks to finish jobs they quoted too low.