Justifying GC costs for smaller development (TDC ~4M)...How do you make it feasible?
When does it make sense to get a GC on board for a project? How does a smaller-sized firm justify the costs of a GC? I am assuming most builders don't have in-house GC capabilities, and therefore, need to sub this out. My question is how much should I budget for GC costs for a project with a TDC of 3-4 million? Does hiring a GC even make sense or does this deplete the entire profit margin? How do you account for this on your projects/what do you typically budget for your GC?
What is the best formula to use with a GC? GMP? Cost plus etc.?
5% of hard costs for overhead and profit is pretty typical, but depends on contractor (this is for larger scale projects, can't speak to smaller scale).
You need a contractors license so unless someone on your team has that, you’ll be hiring a GC. If you have some conceptual drawings you can certainly have conversations with GC’s about pricing and can ask what their fee structure is. Like the above poster said, fee is typically a % of total contract value they’ll also have overhead costs (general conditions) within the budget to pay their overhead.
If you're in anything that may consist of a metro area you'll need a GC license just to get permitting. No GC is gonna bite on 5% on such a small job, probably gonna be at least 10% or have a lot of fat in the bid to deal with.
Honestly if you're asking these questions, I'd see if you could hire a CM/Consultant just to make it through. You'll probably get bodied if you haven't done this before and it's money well spent in your shoes.
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