I recently spoke with a client who completed an 18-month project that stretched to 2.5 years.
That’s not just a 40% timeline blowout – it’s a financial disaster hiding in plain sight.
Why? Preliminary costs.
These are the expenses that keep accumulating regardless of progress:
● Site supervision
● Temporary facilities
● Equipment rentals
● Compliance costs
● Insurance
● Administration
Every day a project runs overtime, these costs continue to drain your margins while your team remains stuck instead of moving to the next job.
The brutal math:
• Project prelims estimated at $15K/month × 18 months = $270K
• Actual timeline: 30 months
• Actual prelim costs: $450K
• Silent profit erosion: $180K
The most frustrating part?
This contractor was showing a “profit” in their accounting system because these overruns weren’t properly allocated to the specific project causing them.
This created a dangerous blind spot where they couldn’t see which projects were truly profitable and which were bleeding them dry.
One of our goals at Contractable was to eliminate this problem by making preliminary costs transparent and trackable in real-time.
When you can see exactly how delays impact your bottom line on a weekly basis, you make different decisions.
You prioritize getting unstuck and moving forward.
Most importantly, you learn which preliminary costs tend to be underestimated in your business, improving every future estimate you create.
What’s been your experience with preliminary costs?
Are they accurately reflected in your project budgets?
