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RRPedia has been created by Shawn McCadden to help remodelers and others affected by the New EPA Renovation Repair and Painting Rule. 

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EPA RRP Jobs: Pricing for profit and consistency

Posted by Shawn McCadden on Thu, Apr 15, 2010 @ 02:57 PM

Understanding the costs associated with EPA RRP work will help you price this work to keep it as profitable as non-RRP work. Costs usually include job-specific materials, labor, and general supplies (like poly and tape) that may or may not be assigned to a particular job. It's important to job cost for several reasons. First, you want to be sure you're not just making money, but making enough money to cover the costs of that job, plus that job's fair share of overhead, plus that job's fair share of profit. Can you really afford to accept a lower profit margin on RRP jobs? What are the implications for your overall profit if this happens? What about profit-sharing? If your profit-sharing or bonus plan depends (as it should) on achieved gross margins, is it fair to under price RRP jobs and then pass along your loss in the form of reduced profit sharing? If you have one lead carpenter who's your certified renovator, supervising RRP jobs is going to take up most of his time. Should his profit-sharing or bonus be reduced because of this? So be sure that you price your RRP jobs according to a plan in which the true costs in materials and labor are represented. If you do, your achieved gross margin shouldn't suffer as a result of your decision to work on RRP projects.

Note:  This information was contributed by Melanie Hodgdon of Business Systems Management.

Topics: Production Considerations, Estimating Considerations