The Design Builder's Blog

Three Options For Getting Paid to Do Estimates

The debate about charging for estimates will probably go on forever within the residential construction industry.  Contractors and consumers both have strong opinions about the subject. Back in December I posted a blog about ballpark pricing and charging for estimates here at the Design/Builders Blog.  I also posted it on several LinkedIn groups in the discussion area at each group.   Well, the comments began to fly.   Many commenters defended their position of not charging for estimates.  Many others scoffed at them for being willing to work for free.

If you want to do estimating for free, go for it.  You can stop reading this now.

On the other hand, for those who want to charge for estimates, I decided to post this blog to help you out.  If you are using a different method than the ones I share here please feel free to share it with the rest of us by using the comments area below.

Here are a few ways a contractor gets paid to do estimates:

1. The contractor charges a fee to do the estimate, separate of the project’s contract price. 

• The fee is paid by the customer even if they do not contract for the work.
• Some contractors credit the fee towards the job if the customer goes forward with the work.
• If the contractor doesn’t somehow have the cost of doing the estimate in the sell price of the job, crediting the fee against the price of the job means the contractor did the estimate for free.

2. The contractor includes the time/cost to do the estimate inside the estimate as a line item.

• Contractor does not get paid to do the estimate unless the customer signs a contract to do the work.

3. The contractor considers doing estimating an overhead expense and the cost of estimating is therefore covered in the markup applied to the estimated cost of each project to determine the sell price of each project. 

• Requires that the contractor knows how to figure out what markup to use.
• The only way the contractor recoups the cost of estimating is by selling jobs. 
• To cover the full cost of estimating the contractor must achieve the installed sales volume and produced gross profit margin (GPM) assumed when he/she figured out what markup to use.
• In this scenario, because not all projects go to contract, customers who sign a contract for work end up paying the costs of doing estimates for the prospects who do not choose to do business with the contractor.

I hope you found this information helpful.  

I encourage all contractors to charge for their estimating efforts.  As a professional I believe you deserve to get paid for your time and your knowledge.

Now, let the debate begin.  About which method makes the most sense.

 For the contractor, as well as for the customer!

Need help with estimating? 

Checkout this Estimating Workshop for Contractors

Guest Blogger: Melanie Hodgdon is a Certified QuickBooks ProAdvisor who has been providing financial analysis and QuickBooks training for contractors since 1994. She’s the author of A Simple Guide to Turning a Profit as a Contractor.  Melanie and Shawn often coordinate their efforts when helping remodelers develop financial systems for their businesses so they serve the contractor, not just their accountant.

Who's Paying For Your Carpenter's Non Productive Time?

I was discussing the cost of labor the other day with a client, and he told me he really had a handle on what his costs were. “No kidding? That’s great,” I said. I then quizzed him on what factors he’d included, and was impressed that he’d gotten so many: wages; company-paid payroll taxes; Worker’s Comp; liability insurance; vehicles, cell phones, and small tools used by production workers; health insurance; retirement. “And what about non-productive time?” I asked. Puzzled, he asked me what I meant.

The fact is that while it’s relatively simple to calculate what it costs to pay a production worker for an hour of time, you have to remember that he’s not going to be available to perform the work that you estimated for 100% of that time.

Let’s do the math.

Assuming no overtime, a worker is typically paid for 8 hours/day, 5 days/week, 52 weeks/year. This adds up to 2,080 hours. So you’re paying him for 2,080 hours a year.

But for how many hours will he actually be available to you to perform the work you’ve included in your estimate for labor?  Subtracting for some common events, we see the number of hours available for producing the estimated work starts to evaporate.

What else cuts into that productive time? How about those weekly production meetings? OSHA safety meetings? Meetings about the new health insurance or retirement options? What about training and education? How about the requirement that they clean out the vans every Friday afternoon? Do they help clean up the shop? Maintain tools? Are they paid for commuting time?

How might this affect estimating the cost of labor for a job?

Let’s say that you pay Will $20/hr. After adding all the burdens to that hourly rate, you discover that his total annual cost is $63,500.

You can look at this annual total in two ways: how much does Will cost you per paid hour, and how much does Will cost you per productive hour: the hours that he’s actually available to perform those labor tasks you included in the estimate when calculating the job’s sale price?

From the chart, you can see it costs over $5/hour more for Will’s time when you base the cost on his productive time.

So what does this mean in terms of pricing jobs?

Using the wrong labor cost can be devastating, particularly in jobs where there is a high proportion of labor.

Let’s see how it would play out in jobs with varying amount of labor.

For a 100 hour job, based on the burdened cost per paid hour, the estimated cost would be $3,053.

Those same 100 hours, based on the burdened cost per productive hour, costs $3,553. So the cost difference between using the paid vs. productive hr cost figure would be $500. For a 1,000 hour job, the cost difference would be $5,000.

Now let’s look at the selling price of the job, assuming a 50% markup.

For a 100 hour job, the difference in selling price would be $750.

For a 1,000 hour job, you’d be underpricing by $7,500!

So next time you estimate work, be sure you’re working from realistic costs. Labor is tricky to estimate anyway; getting a handle on what it really costs for that hour of nail banging will bring you closer to costing and pricing your jobs accurately.

Need help with figuring out your labor costs?

Call or Email Shawn today. 

Do it now so you can be confident you are pricing your spring and summer projects correctly!

Contractors: Do You Do A Better Job Picking Lumber Than You Do Picking Employees?

Lots of contractors these days complain that they can’t find any good help.  Others complain they can’t get the help they do have to do good work and or be conscientious employees.  These contractors claim their workers just don’t have the skills, attitudes and or behaviors the business owner desires.  It would seem, at least in my opinion, that these contractors are rationalizing why it’s their employees who are at fault for this, when in reality it’s the business owner who interviewed and hired the employees.

Here’s an analogy for you. 

Choosing employees is a lot like choosing lumber.   Like lumber, employees are available in different grades.   If you want good quality lumber you need to know where to go to get it and you will have to accept the fact that the better grade will cost more money than the lower grade.

Are you making do with what you have in stock?

If you buy straight, clean and clear lumber, decking for example, you can quickly install the decking because you won’t have to straighten out each piece as you go.   Also, you won’t have to worry about trying to hide any imperfections like loose knots, wane or checks.  On the other hand if you buy (hire) a lower quality decking (employee) you will need to do the best you can with what you bought (hired).   And, with low quality employees or lumber, you ultimately won’t know what finished quality you can expect until you are done doing the best you can with what you have to work with.

Does this make sense to you?

Why is it then that so many contractors make personal trips down to the lumberyard to pick up and pick out the specific materials they want to build with, but spend little time or effort choosing the right employees?   Why will a contractor buy the best materials for the job but then make do with poor or average quality labor to install those materials?

I think it’s mostly because contractors have no idea how to recruit, interview and hire properly.   These same contractors learned how to hold up and “eye” a piece of framing lumber.    A similar concept can be used to qualify and pick out the right employees.

Shouldn’t you be committed to being a business owner, too?

For the most part contractors gain and master all the required trade skills because someone first taught them the skills and because they have purposely practiced those learned skills with the honorable desire to become craftsman.  In my opinion this same process and commitment should apply regarding learning business skills; like hiring employees.   A good business manager must first learn the skills required to properly recruit, interview and hire the right employees.  Then, they must have actual experience using these skills so they can apply what they have learned and eventually become successful at doing them.  

So, like lumber, you can bring low quality or discount employees onto the job.   But, if you do, you will also have to spend extra time trying to “straighten each one out” and to make sure you “hide their flaws” so they will look acceptable when the home owner comes around to see how things are going.

As a construction business owner the quality of your employees, just like the quality of your work, is your full responsibility.

Related Articles:

Is He Or She Really A Lead Carpenter?  Probably Not!

Successfully Grow Your Business By Creating a Ladder of Opportunity For Employees

Equal Employment Opportunity Commission to Contractors:  Start Hiring Convicted Felons!

Mentor Me, Please - Gen Y Business Owner Offers Peers Advise on How to Learn From Craftsmen

Why Contractors Should Get A Line Of Credit When They Don’t Need One

Guest Blogger: Melanie Hodgdon is a Certified QuickBooks ProAdvisor who has been providing financial analysis and QuickBooks training for contractors since 1994. She’s the co-author of A Simple Guide to Turning a Profit as a Contractor.  Melanie and Shawn often coordinate their efforts when helping remodelers develop financial systems for their businesses so they serve the contractor, not just their accountant.

A line of credit can be your cash flow insurance

I recently had a conversation with a client who, after an incredibly profitable startup a couple of years ago, encountered a perfect storm of difficulties and recently found himself facing a severe cash flow crunch. This is one of those things that happens in any industry, and seems particularly prevalent among construction and remodeling companies

The problem is sort of like health insurance.

When you’re young and in perfect health, it seems stupid to waste money on insurance. There are so many more important (and fun) things to buy: trucks, tools, additional personnel; the list is endless. I remember when I fell off my roof, my life didn’t flash before my eyes, but I did have a very clear sequence of thoughts.

1. I hope the cat isn’t lying where I’m going to land (he wasn’t)
2. This is SO going to hurt (it did)
3. I really, really wish I had insurance (I didn’t)

Back to the cash flow issue.

The point is that when everything is going great and you have oodles of cash, it seems stupid to waste time setting up a line of credit. However, that’s exactly when you should apply: when you don’t need it.

Once you need a line of credit (or, more accurately, once you admit to yourself that you need it), the chances are pretty good that your Balance Sheet will look pretty bad, and it’s your Balance Sheet that creditors want to look at.

Working with your lender

Your bank is actually less interested in your income or even your profit figures; what matters is the extent to which you’re able to pay off debt, and the degree to which your company is running on credit. We’ll look at the critical numbers in a follow-up blog. In the meantime, one of the things that saved my client from being turned down by the bank was that he had an excellent relationship with the bank staff, who went to bat for him. While things were going well, he’d made a point of sharing his successes with key personnel. They knew he was a hard worker with a solid business plan and a track record of success, and this personal knowledge allowed them to see past the current bad-looking financials.

Here is a summary of steps to help contractors secure a line of credit

1. Learn more about your Balance Sheet, the often under-utilized and misunderstood financial report that can spell success or failure
2. Make a point of getting to know your bank personnel, particularly your loan officers; this can up your chances of approval by lifting you from anonymity
3. Apply and get approval for a line of credit when your books look good, when you have plenty of cash, you’ve paid down debt, and you don’t need credit

Guest Blogger: Graeme Owen, based in Auckland NZ, is the builders' business coach.  Since 2006, he has helped builders get off the tools, make decent money, and free up time for family time, going fishing, and enjoying sports.  Get his free ebook: 3 Reasons Builders Lose Money and How to Fix Them for High Profits at TheSuccessfulBuilder.com

To Close More Free Estimates Be There for the "Which Builder?" Decision!

Are you wasting time preparing building estimates for jobs you don’t get? Frustrating!  And costly!  Maybe you are like so many builders making one of the most common estimating mistakes: Not being with the client when they are deciding which estimate to accept!

There is no doubt that the builder who is with the client when they are deciding on which estimate to accept is highly likely to get the job.  Wouldn’t it be great if you could be that builder? The thing is...you can.

Here are three keys to being present when the client is deciding "which builder" to hire,

1. Discuss Other Estimates

In your first meeting with your client make sure that you discuss with them how many other estimates they are planning to get. Even though they may like you and tell you you are the only one, it is highly likely that they will consult another builder - if only to check that you are not “ripping them off.”  Also, if they are borrowing money for the build, they may be required to get multiple estimates.

2. Set the Estimate Close-off Date

Having broached the subject, discuss the close-off date for accepting estimates.   Make sure that you give yourself enough time to get your estimate together and enough time for your client to talk to other builders.

3. Position Being There

Finally, in your first meeting ask permission to be with them when they are making their final decision. Set the date and time for that meeting on your first visit.

Here is an example

You say, “Will you be getting other estimates?”

They say, "Yes."

Accept this graciously with something like. “That’s great.” Then say,

“When do you think is a good date for us to have all the estimates together?”

“What we request is that when you have all the other estimates together we meet and go over them with you. This way you can be certain that you are comparing apples with apples. Now I know that you are probably quite capable of doing this yourself, but we have had cases where people have accepted estimates they have later regretted. They did not fully appreciate exactly what was covered and ended up paying more than they had expected. So it’s our company’s policy to do this. Is that OK?”

“When would be a good time for us to meet?”

Summary

Follow this simple procedure and you will increase the number of times that you are able to be with your client at the strategic time when they are making their decision on which builder to use.   Some will not agree.  But if you don’t ask, none will agree!

Post and share your comments below.

Would you try the scenario described above?

So, how many of the last 5 estimates did you close?

What have you found to be the best key to turning estimates into sales?

Guest Blogger:  Steve St. Onge founded RI Kitchen & Bath, an award-winning design/build residential and light commercial remodeling company located in Warwick RI specializing in kitchens, baths, and multi-trade interior renovation projects.  Steve contacted me about help finding a production manager, so I convinced him to do this guest blog as a way to find a good candidate.  Steve can be reached via email at Steve@rikb.com

All I want for Christmas… Is a Real Production Manager!

OK, so why is it so hard to find a complete package???

I want an employee who has:

• A complete understanding of residential construction including knowledge about the challenges of older homes – say built before 1940, and also a working knowledge of current building code. 
• A person with field installation experience so they understand just how long a task should take and what a quality fit and finish really looks like.
• A people person – someone who can assemble and motivate a team of skilled professionals to complete projects on time, as well as maintaining a professional, respectful and solid working relationship with the architects and sales and design team that brought the project to us in the first place, with the ability to overcome challenges of missing information or changes, along with that all important trait of empathy for the client’s experience.
• A communicator -someone who can exchange ideas, and be open to other’s solutions in addition to being able to clearly articulate their ideas through verbal and written channels in a timely and responsive manner.
• A problem averter, not just a problem solver, because once there is a problem, it is too late.  This has to be someone that has vision and can plan and then implement that plan.
• A detail person, someone who is organized, doesn’t lose the details and can create spreadsheets and collate data to analyze the stats and make adjustments to stay on schedule or increase efficiencies.
• A tech savvy person, who understands how to leverage technology and use it in new and creative ways to manage multiple projects and tasks at the same time.
• A student- someone who wants to continue to learn, and grow and accept new challenges.
• A teacher- someone who is willing and able to share their knowledge to help others.
• A happy person with good manners and a pleasant demeanor - someone you would invite to dinner.

Is this too much to ask?   I’ve been good….  Really.

This is the second blog article in the "All I want for Christmas" series here at the Design/Builders Blog.

If you would like to contribute a guest blog for the Design/Builders Blog email Shawn with your suggest topic.

Tips For Contractors On Ball Park Pricing and Charging For Estimates

Any contractor who has been in business for any length of time has probably had to deal with Ball Park pricing and charging for estimates.  Home owners always seem to want one but not the other.  Rather than risk letting a Ball Park price make them look bad, savvy contractors can use the request for one to help cause the other to happen.  If interested in how to do this, read on.

Let’s start with Ball Park Pricing

How many times in your career has a homeowners asked you for a “Ball Park” price for their project.   And, how many times did your Ball Park price end up being nowhere close to the actual price of the project? 

I find the whole idea of Ball Park pricing comical. I’m not saying it doesn’t have value in some selling scenarios.  I am saying however that when contractors offer a Ball Park price more times than not they strike out rather than hit a home run.

So, when I was selling remodeling and a prospect asked me for a ball park number, I would respond by asking them which ball park they preferred; Fenway Park or Yankee Stadium. That usually stopped them right there in their tracks and helped them think about what they just asked for.  And, by asking that question, I was able to get them into a much more meaningful conversation about their project.  Let’s face it; a "ball park number" really doesn't have much value unless there are some specifications to help give it any relevance.

Try asking them about which Ball Park they are looking for.  Feel free to substitute the parks you use. I think you will find doing so to be a great conversation starter. 

Then there’s the whole idea about charging for estimates

As contractors we know estimates are not free.  Somehow the cost of creating an estimate must be recouped by the contractor. 

Some contractors may say they don’t charge for estimating.  If that is true they are working for free and the cost of estimating is not included in the price quoted to the prospect.  I don’t know about you, but in my opinion if you do estimates for free you are undervaluing your worth and might also be putting your professionalism in doubt.  If you are not charging for estimates, and you also are not accumulating enough money to someday retire, working for free might be a good part of why.  And, contractors who do so are making things challenging for those who do charge by helping consumers think they should get estimates for free. 

On the other hand many contractors who tell their prospects they do not charge for estimates are actually not charging for the estimate in advance, they recoup the cost of estimating through their markup; but only if they sell the job.  

It’s OK if they don't want to pay, but why get offended? 

So why do prospects get offended when you tell them you charge for estimates?  Did they expect you to work for free?   Do they work for free at their jobs?  I doubt it. 

When I was selling remodeling and homeowners asked if I would do free estimates I would say yes and give them an estimate right then and there.  I would say something like “I estimate the bathroom project will cost somewhere between $15 and 25, 000”.   Then I would just wait.   When they asked why such a big range I would simply ask them why they thought I had to give such a big range.  It usually led to meaningful conversations about the fact that an estimate is really just a guess and may not have any relevance to the true cost of what they would actually want to buy.  And, as a result, having this conversation helped them discover the need for plans and or specification so I could give them a fixed price in place of the “estimate”. 

After all, that’s what most remodeling consumers really want; a fixed price for what they actually want. 

One option you can try if the Home Owner can’t understand why you charge for estimates

Next time a homeowner wants a free estimate, or is upset about charging for one, why not suggest bartering?

"If I spend the time to collect all the info about your project, seek pricing from my vendors, meet with my subs to get accurate pricing for their work, and then assemble an accurate cost and proposal; how about we do a trade? Maybe while I'm doing that stuff you could either babysit my kids or cut my lawn? What to do think Mr. Home Owner, would that be a fair trade?"

A point of clarification which should already be obvious

If you choose to go down the “Which Ball Park” or “Let’s barter” path make sure you do it in a respectful manner and your purpose for using this analogy is appreciated by your prospect. 

How you say it can make the difference between being the contractor of choice and being shown the door!

Need help with estimating? 

Checkout this Estimating Workshop for Contractors

All I Want For Christmas Is A Real Business Management System Software

Its Christmas time and I like to get presents.  Being surprised is always nice.  But when you get what you asked for it can be even better.   If Santa is listening here’s my request:

“I wish that someday the residential construction industry will have a true single solution business management software system”

I know some companies claim to have a full or complete system, but I have yet to find one that really does.  Most handle the front or back end of the business, but I have yet to find one where the front end supports the back end.

Santa, please give these specifications to your elves

• First, the product would be one system, not a bunch of systems and or disparate apps.
• I’m looking for a system that actually does include everything a remodeling or construction business needs from cradle to grave for each prospect, customer and project. 
• It needs to be web based so the entire team can have access to it whenever they need to; office and field staff.
• It would be designed and built by a company that actually understands how a remodeling business should be run, and includes best practices that will be adopted; not adapted by the users.  
• I want to be able to assign tasks and duties to employees, prospects and customers, and I want to be able to track and verify whether things are getting done and done in a timely manner.
• I want a system that helps me see and know things are under control so I don’t need to always take over control of things.
• It would include the ability and the requirement to do things like first creating a financial budget.  Then it would use the budget information to calculate and automatically apply the markup the business needs to use to reach its overhead and profit requirements.
• It would include the ability to create a strategic and measurable marketing strategy including the ability to schedule and assign fulfillment of marketing tactics included in my plan and budget.
• The system would tell me if the marketing tactics being used are actuality providing the intended ROI. 
• The system would include a dash board of the key metrics the business needs to keep and eye on to know if things are on track or not;  against the business’ plan for things like budget, marketing goals and sales goals.
• A system that would help me implement and manage a profit sharing program that is accurate and fair to both the employees and the business.
• Estimated costs for labor hours added to an estimate will automatically be based on the true burdened labor costs for the business using it, based on that budget that was entered.
• When time cards are entered into the financial module the actual burdened labor rate of the employee who did the work will be reflected in the job cost reports.
• A system that can provide true apples to apples comparison of estimated to actual job costs and estimated to actual overhead costs.
• One that includes an estimating system that actually generates an accurate materials list I can order with, as well as detailed work orders for employees and subs.
• One that warns you how much money you will lose, or alternately, how much more volume you need to sell and produce, when sales staff may be tempted to drop the price below what the system says is the recommended selling price.  
• One that helps make sure my company, my employees and my subs are complying with the RRP Rule and relevant OSHA requirements.
• It would come with training that goes beyond just how to use the software.  The training I am imagining would include clarity on the “HOW” and the “WHY” the best practices included within the system work and contribute to a successful business.

Santa, If you like my specs so far let me know, I can keep going…

Many may say that I’m dreaming, asking for the impossible...

I disagree. 

I truly believe it can be done if the right company and the right experts work together to make it happen.    

So Santa, if you really want to make me happy this Christmas please make sure I find the system under the tree on Christmas morning.   If your elves don’t have the skills or knowledge to put it all together have them give me a call.   I’ve got the specifications and best practices part under control.  If you have elves who can design the software and write the code together we could get it done in time for Christmas next year and make a lot of construction business owners very happy!

Feel free to use the comments area below if you want to add to the list.  Only contractors who have been nice though!

This is the first blog article in the "All I want for Christmas" series here at the Design/Builders Blog.

If you would like to contribute a guest blog for the Design/Builders Blog email Shawn with your suggest topic.

Free RRP Renovation Checklist Will Help You Estimate And Document RRP Work Practices

One of the requirements of the RRP rule is that the certified firm must create and maintain documentation of the work practices used on any renovation projects falling under the RRP Rule.  EPA is not doing field inspections unless someone reports a violation of the rule.  Rather, EPA checks on a firm’s compliance with the rule through the required paperwork a renovation contractor must create and keep on file.

It has come to my attention that in addition to illegally operating businesses, even many RRP Certified firms are not doing this required paperwork.   That’s a big mistake with the potential of up to a $37,500 fine for not having the documentation if EPA does an audit.   Plus, if you don’t have any documentation to prove what you did do, you may be subject to additional fines because you won’t be able to prove you used any of the required work practices while completing the work. 

Remember, the fine is up to $37,500 per day, per violation! Ouch!

Help with RRP implementation

To help contractors out with implementing the RRP rule I will be presenting a half day RRP Implementation Workshop along with Mark Paskell of the Contractors Coaching Partnership.  The first workshop will be held in Mansfield MA at National Lumber on January 7^th, 2014 from 8AM -12:30 PM.  Additional dates and locations will be announced soon. 

At the workshop I will be sharing a complete set of the required RRP documentation paperwork with attendees.   The paperwork bundle will include several custom forms I created to help contractors and their team members with RRP rule compliance. 

The RRP paperwork bundle will include all the forms a renovator needs:

• Non-Certified Worker Training Documentation Form
• Lead Test Kit Documentation Form
• Paint Chip Sample Collection Form
• Occupant Pre-Renovation Notification Form
• Common Area Renovation Notice
• Record of Tenant Notification Procedures form
• Renovation Recordkeeping Checklist Form

 

About the free RRP renovation Checklist

The form that I think will be most valuable to attendees is the Renovation Recordkeeping Checklist Form.  When I created this customized 3 page form I did it in a way such that the same form can be used in three different ways as follows:

• The estimator can use it to help assess what work practices will need to be included in his estimated costs, for both interior and exterior projects.
• The production manager can then use the same form to go over RRP work practices and containment requirements with the team doing the project.
• The certified renovator can then use the same form to document what work practices were actually used.
• Because of the design of the form, employee are less likely to miss or forget what needs to be done to be in and prove compliance.

At the workshop I will be going over the forms and how to use them to properly and accurately prove compliance with the rule.    After doing so at previous workshops many of the attendees said they found that RRP compliance and completing the required documentation was nowhere near as hard or as time consuming as they had imagined.  Plus, they found my forms to be easier to use and much more intuitive that the EPA sample forms.

Click here for information about the workshop

If you would like to Shawn to conduct the RRP Implementation Workshop at your place of business email Shawn or call him at 978-726-6531

Stars are Aligning for Contractors; This Year Could Be the Turning Point in Your Business

The economy and the remodeling marketplace finally seem to be improving.  It’s not happening as fast as we all might like, but it is slowly improving in what appears to be a sustainable way.  And, as a result, consumers have been gaining the confidence to once again spend money on and invest in their homes.   If the recession caused your business to downsize or slow down, now might be the time to decide whether you want to and will commit to improving and growing your business.

Indications that contractors and the supply chain are both optimistic

I am still being cautious about making such a statement about the marketplace, but a few key indicators have prompted me to do so.  

First, is the number of contractors not only contacting me for help with their business systems, but actually committing to the investment required to do so.  About a year ago I noticed the inquiries picked up, but after we discussed the typical costs to put business systems in place many contractors decided to hold off, citing concerns about short work backlogs and protecting their cash flow requirements.   Now, with a good backlog of work under contract, both the calls and the commitments have dramatically picked up. 

Second is that the supply chain is finally spending money again on marketing to and investing in their remodeling contractor customers.  Although still not as busy as they used to be, trade shows this past year have grow in size again as more manufacturers and distributors are back participating at the shows.   Also, since about early this past summer, the number of manufacturers, distributors, dealers and trade associations contacting me about speaking at their events has also dramatically picked up.   The supply chain is once again spending money to educate their staff as well as their contractor customers, as a way to grow their businesses as well as their customers’.  The Rhode Island Builders Association Boot CampsThe Rhode Island Builders Association Boot Camps I was involved with is just one example of this trend.

Don’t get left behind

If you’re a contractor thinking about the future opportunities and potential for your business now is the time to act.   As I discussed in a previous blog titled “Generic Contractors Are Fading Away, Brand Names Are Shining”, those contractors who are investing in their business systems and their brand have been capturing good projects with good margins.   Those who have been and continue to protect “their status quo” are going out of business or continue to struggling financially. 

Here’s how I look at it. 

About 75-80% of remodeling consumers buy predominately on price.  Also, my experience tells me, about 75-80% of contractors are generic commodities in their market place.   That means that if you want to capture business from the 20-25% of consumers who select a remodeler for reasons other than lowest price you better get going improving and differentiating your business.  The idea is to build your market share, in your target market, before someone else does.

Here’s a quote by a famous baseball personality that I think sums things up

"There are three types of baseball players: those who make things happen, those who watch it happen, and those who wonder what happens."     

 Tommy Lasorda