Big vs Small Building companies - PROS/CONS

[Blair007]

Hi all,

Im halfway through a build in Perth at the moment. Bricklayers are a few weeks off finishing (only taken them just over 2 months, not including my 6 week wait from slab down.) It's with one of the largest building companies here in Perth.

I just want to hear some thoughts on the Pros and Cons of choosing a Large company over a smaller crew that only has a couple of houses on the go at once.

I was of the understanding that the smaller companies could do better prices but I thought you paid a bit more for the bigger companies because they could get things done much quicker and get straight into it rather than waiting for other projects to finish.

I know the construction industry is pretty busy here in WA at the moment, but the length of time this project is taking is pretty frustrating, and to top it all off I am not even allowed to speak directly with a building supervisor I just get stuck with some client liaison who gives me very vague answers and timeframes that are never accurate.

From all of the more experienced developers/investors I have talked to on here they all seem to deal with the smaller builders and build up relationships with them. Is this the way to go? because at the moment I cant see any downside to using smaller companies...

reasons being

• cheaper price
• you mean more to them and are not just one of 50 builds in progress
• most likely deal with the company owner directly/they may even be on the tools themselves
• there is probably more pride in their work rather than a sub contractor who wouldn't care as much.

The only downside I can see is that if you have a dispute with a smaller company things could get messier than with a larger building company who could potentially switch project managers etc. But if due diligence is done this shouldn't be an issue.

keen to hear other peoples thoughts

cheers

 

[HD_ACE]

Big company:

Cheaper
Take longer
Your just a number
Should have more tradies on their books.
Harder to get an answer or issue resolved.

Small company

More expensive
Quicker
More personalised service.

Just have to way it all up. Cost vs waiting longer vs quality etc.

Cheers

 

[D.T.]

Smaller co more risk of going broke mid project ?

 

[Blair007]

Smaller co more risk of going broke mid project ?

Yip that's a good point.

Chase for some reason I've been hearing lately that smaller companies can do things cheaper. I have no evidence myself but always thought like you that the larger companies where cheaper

 

[HD_ACE]

Chase for some reason I've been hearing lately that smaller companies can do things cheaper. I have no evidence myself but always thought like you that the larger companies where cheaper

The bigger companies go by volume. To get this the need to be cheaper. This volume causes backlogs and delays so its quite possible the savings will be erroded by holding costs etc.

From my recent costings ie ventura cheapest, medium builder was 20k+ and a small builder 80k+. This was for a single build with work to existing dwelling aswell.

But can also depend on how vanilla the project is and i would imagine if a smaller builder has nothing coming onto the books then they would be pretty competative to keep things ticking over.

Cheers

 

[Kent Cliffe]

There is no hard and fast rule in selecting builders and the size relating to customer service is not always the best indicator.

When we do tendering due diligence on a builder some of the items we seek clarity on include (but not limited to):

• Have the completed similar projects?
• How many projects they currently have going on?
• How many supervises are currently employed?
• Who is the supervisor for your potential site?
• How many projects does this supervisors currently take care off?
• Call up the Building Commission to found out how many (if any) disputes they have had and what the outcomes were?
• Ask them to visit 2 or 3 completed projects and 2 or 3 projects under way.
• Ask them how long the 2 or 3 completed projects took and to confirm they are being honest time stamp the information with Nearmaps.

This is just some of the items. To give you an idea on how hard it's even for professionals with industry nous to find a quality builder, our enquiry on potential builders scorecard has 67 questions/actions we take to ensure they are suitable for our clients. This list is to date and it is always growing!

 

[MTR]

The bigger companies go by volume. To get this the need to be cheaper. This volume causes backlogs and delays so its quite possible the savings will be erroded by holding costs etc.

From my recent costings ie ventura cheapest, medium builder was 20k+ and a small builder 80k+. This was for a single build with work to existing dwelling aswell.

But can also depend on how vanilla the project is and i would imagine if a smaller builder has nothing coming onto the books then they would be pretty competative to keep things ticking

Cheers

I have used larger companies with previous projects had no major issues, though its vanilla not what I want now.

I am now using a smaller company. The smaller builder I am using came in well under larger builder, about $40K.

I chose the smaller company not just on price but also on product, time frame and checked out referrals and his builds. I was impressed with his quality and also the fact that he builds for one of the high profile real estate agent who builds quite a few pa. I was able to contact this agent and chat about his projects and all positive.

So far so good. My builder is hands on and always available to chat about my project, he also has another project manager who is also available any time and also involved in management of projects. I like this set up very much.

The smaller builders that are good at what they do from my experience do not have issues sourcing clients, and its the opposite they reject work/clients. I actually had to go elsewhere with one particular builder as he could not take on any more clients, good builders are in high demand.

cheers
mtr