Over the years we have heard from many customers that they experience “sticker shock” when gathering quotes for their fence project. It is not that Draper Fencing is wildly higher but just that fences are expensive! In this blog post, we will break down what goes into the cost of a fence.
Overhead
The first category we will go over is usually termed “Overhead”. The overhead category includes all costs associated with running a business that does not apply to individual jobs. Some of the main costs in the overhead category are:
-Rent or Mortgage – Construction companies always need a place to store equipment and materials.
-Utilities – Of course the business must pay for water electricity heat internet and telephones
-Tools – fencing requires a variety of tools to build quickly and with quality and all tools cost money. Some of the major expenses in this category include digging machines, hand tools, compressors, and post pounders
-Trucks & Trailers – most jobs require a sizeable amount of materials and this means you need a large truck and trailer that can safely pull the weight
-Marketing – At its simplest, marketing connects the customers who need a product to the businesses that provide that product or service. One major cost is ensuring our website etc is easily accessible and found in Google searches.
-Office personnel – This category would include customer service representatives, inventory management, material preparation, and management.
– Estimators – Fencing can be an incredibly complicated project, especially depending on the yard and terrain it is being built on. A good estimator will walk you through any obstacles and options to handle them.
-Insurance – companies are required to carry a variety of insurances to ensure that any large mistakes or accidents are covered for the business and customers
-Capital – to grow a company needs access to capital and of course, this costs money including the interest charged on the loans
Materials
The next category of cost would be the cost of materials. While fences often do not need a large number of components they are stretching over hundreds of feet requiring a large amount of materials. Material cost varies widely depending on the type of material.
Wood Materials
While many fence companies build with either Pressure Treated Pine or Cedar, at Draper Fencing we only use Cedar for our wood products. Simply put it is a far far superior material that will last much longer than pine. There are a variety of species of Cedar. Incense, White, Sugi & Western Red to name just a few. At Draper Fencing we use Sugi Cedar due to its quality and beautiful red hues. Other companies may use incense or white Cedar which is cheaper but comes with some drawbacks on quality.
Aluminum
Prior to the pandemic aluminum used to be a more economical option however, over the last few years, we have seen an increase in the price of aluminum fencing. Metals are not cheap and each aluminum panel requires a manufacturing line to assemble. Again quality is a large part of the price. Many companies use imported aluminum from Asia. While some of the Asian factories assemble a quality product they are often using less aluminum per panel and an inferior quality of powder coating. If you walk around your neighborhood with a keen eye you will see the various qualities of aluminum fences.
Vinyl
Vinyl fences also require a substantial amount of manufacturing to create. This leads to a larger price tag than wood fences. Similar to aluminum, different companies create different products and use a different amount of material per panel.
Chain Link
The most versatile type of fence there is. Chain link fencing has been around for a very long time and it is an excellent choice for the budget-conscious. While the materials are cheaper it requires a lot of parts and pieces and you will want a professional to install it.
Labor
The next major price category is the fencer’s pay or Labor. You want qualified and trustworthy people building your fence. There are several things to consider here.
Skiller Fencers – Like all trades there are new fence builders and experienced fence builders. The cost of their skills will be reflected in the price.
Healthcare – Does the company offer healthcare? If so this could add around 2-5$ per hour for each worker. At Draper Fencing we are proud to offer healthcare for our employees.
PTO & Holidays – Building fences is hard work. Demolition of old fences and digging for fence posts can be exhausting. Everyone deserves some vacation time. At Draper Fencing we are proud to offer over 60 – 80 hours of PTO and major holidays to our employees.
Workman’s Comp, Insurance & Taxes – The government requires workman’s comp as well as payroll taxes which have to be included in the price of each worker’s wage.
Employee or Subcontractor– Many companies use subcontractors or hire people using 1099. By doing this they get out of paying the company’s portion of things like Overtime, Medicare, Social Security, Unemployment Insurance, and Workman’s Comp Insurance. This allows them to undercut businesses that are hiring normally and paying these expenses.
Profits
Of course, the last category to cover is profits. In the 21st century profit has gotten a bad name especially concerning mega corporations who have the power to change markets. However, profit does mark the health of a company and there are several good reasons you should want your contractors to profit.
–Invest and Grow – a good company will reinvest their profits into offering more products, creating efficiencies, and hiring more employees. These investments allow businesses to offer more value to more people. Additionally, by investing profits in employees, a company is able to offer more benefits.
-Giving Back – At Draper Fencing we are always looking for ways to give back to our community. We build several free fences each year for veterans with service dogs in need of a yard to run. We also sponsor many amazing non-profit organizations that help to strengthen our community.
-Warranties – Reputable companies will always offer a warranty on their products. However, the company must be in business to fix any problems that arise. A company that is not profiting will not be around to address future problems that arise with their products.
-Incentives – Starting and running a small business can be long grueling days. Our owner, Ryan Draper, started this company 9 years ago with the goal of finding a productive way to put food on the table and take care of his family. While profits are never guaranteed we all need to see successful businesses succeeding to incentivize entrepreneurs to put in those long hours in hopes of everything paying off in the long run.