The Design Builder's Blog

3 Tips for Prepping Your Vehicle for the Job Site

As someone who works in construction, you already know about the importance of having the right equipment to stay safe on the job. From installing scaffolding to access certain work areas to making sure everyone is properly trained on using heavy equipment, you pride yourself on having safe work sites.

If you use your own car or truck as a work vehicle — and routinely drive it to construction sites — it's important to treat it like any other piece of work-related equipment. That's why many contractors as well as their employees make sure their vehicles are properly maintained and prepared to be on any job site.

With this in mind, check out the following tips that will help keep your car in good shape on any and all job sites:

Maintain Your Tires

Construction sites can be muddy and filled with sharp objects that can puncture tires. With this in mind, regularly checking your tires is a must; after all, you'll want rugged tires that can handle slick and rocky conditions — and you'll need to catch and fix any damage before any tires go flat.

Before heading to work each day, check the treads and condition of your car or truck’s tires to make sure they're safe to drive on, and then conduct the same practice before heading home at the end of the day. When it's time to replace the tires on your truck or SUV, consider an all-terrain variety like the Nitto Ridge Grappler from an online retailer like TireBuyer.com.

TireBuyer.com stocks a wide variety of sizes of the Grappler tire, which can easily handle driving over uneven and muddy construction sites. The Grappler features shoulder grooves, which will clear mud from the tread, along with stone ejectors that can help keep your treads clear and damage-free.

Stick to a Maintenance Schedule

To ensure your vehicle is in proper working order at all times, adhere to the manufacturer’s recommended maintenance schedule. Driving through construction areas can wreak havoc on air filters and other parts of the car that collect dust and dirt, so making sure your car goes in for regular tuneups is essential to control repair costs as well as fuel costs.

If you have to tow or haul a lot of heavy equipment, or if you drive long distances every day traveling from site to site, you may want to bring in your vehicle more often for maintenance. To help stay on top of your car’s maintenance needs, consider downloading the free AUTOsist app, which let's you keep detailed records of all of your oil changes, brake jobs and tire rotations. You can even set reminders within the AUTOsist app to bring in your car for a tuneup based on mileage or date.

Always Keep Safety Equipment in Your Car

In addition to maintaining the outside of your vehicle, what you keep inside it should also prepare you for safely spending time at a job site. Keep your personal safety equipment in your vehicle at all times and double check you have everything before leaving home in the morning.

ISHN.com suggests keeping safety glasses and/or a face shield and eye protectors on hand, along with a hard hat, heavy gloves and an extra pair of steel-toe work boots. Experts also suggest keeping a checklist of all of your safety equipment and storing everything in a bin that fits into the trunk.

Finally, check your hardhat and other gear regularly for cracks or other damage; if you notice anything amiss, replace it immediately.

Guest Blogger: Alison Stanton has been a freelance writer for the past 18 years. Based in Phoenix, Arizona, Alison thoroughly enjoys writing about a wide variety of people and topics. When she is not writing, Alison can be found hanging out with her family—which includes three wonderful rescue dogs—and sipping a caffeinated beverage from Starbucks.

How To Handle Mold And Avoid Liability As A Contractor

Mold remediation experts are not the only contractors who encounter mold on a fairly regular basis. Often times, the homeowner does not learn that there is mold in their house until a contractor points it out. This may be a restoration contractor, an HVAC contractor or even a plumbing contractor.  Read on to find out how contractors can handle mold at their job sites and avoid liability.

Contractors should always warn homeowners if they spot mold on the job even if that is not why they are there. Mold can pose a serious risk to the foundation of the home as well as the health and safety of the inhabitants. The homeowner can then contact an Indoor Environmental Professional (IEP) to fully diagnose the problem.

This should be good news to the homeowner. However, this puts the contractors in a tough position. Over the past few years, there have been a growing number of lawsuits against contractors who pointed out the mold to the homeowner. The homeowners often attempt to place the blame on the contractors as the source of the mold, but why?

The number of claims made to insurance companies regarding mold damage began to skyrocket in the 90s and 2000s. This was good for the homeowner because the insurance providers paid to have the mold removed and the area restored. It was also good for the restoration contractors because the insurance companies were paying them to do their job. The only entity that didn't benefit from this growing awareness was the insurance provider who had to cover the costs.

Insurance companies found a way out of this predicament by including new and more severe mold exclusion clauses in their policies. This meant the insurance companies were no longer paying for mold remediation. The funds had to come from the homeowner, the contractor, a lender, or a third-party source.

Homeowners didn't want to be stuck with the bill so they began opening lawsuits against contractors claiming that the mold was a result of their work. This greatly increased the risk of working for homeowners as well as in commercial buildings.

How Can Contractors Avoid Liability?

Contractors must rely on their own insurance policies to avoid liability in many cases. Their Commercial General Liability (GPL) insurance policy is a standard tool of protection. However, there is a pollution exclusion clause included in this policy. The exclusion states that the insurance does not cover any bodily or property harm caused by the escape, dispersal, or release of pollutants.

Whether mold is considered a pollutant that is not covered by this policy is a widely debated issue. Court cases often tip one way or another without offering any universal standings. Some cases have found the policy to be too ambiguous with their definition of pollution. Others have classified mold as an airborne pollutant.

Contractors are not advised to leave their career up to chance. Instead, contractors should consider investing in new insurance policies that are specifically designed to cover mold and pollutants. (As well as the standard GPL policy) Contractors Pollution Liability (CPL) covers liability for such pollutants with a clear definition that includes mold or fungi.

CPL may be the best tool currently available for contractors to avoid liability when mold is discovered on a property. That is in addition to proper risk management. Properly managing risk means carefully choosing what customers to work with and how the problem is approached if detected.

Dealing With Customers

The customers a contractor chooses to work with, how well they document their work, and how they approach the customer regarding mold will play a big role in how the situation unfolds. First, it's a good idea to avoid working with customers that already seem disgruntled with insurance companies.

This is especially true for mold remediation contractors where the homeowner already knows of the problem and isn't happy that their insurance policy doesn't cover the loss. They may still try to pin further damage on the contractor that outweighs the bill for the services provided. These customers are time bombs that should be avoided when possible.

Addressing the issue as carefully as possible is the final point of recommendation. It's important for contractors to put themselves in the homeowner's position. Mold remediation can be expensive work and the insurance providers have dumped the costs on the homeowner. They need to approach the subject carefully, with empathy, and with a proper course of action.

Risk Exists

It is impossible to work as a contractor and avoid risk altogether. However, by utilizing ethical work standards, by carefully choosing and approaching customers, and by adding CPL policies to their arsenal they can greatly reduce the risk associated with mold.

Guest Blogger: R.S. Hall is the owner of several successful businesses and the publisher of the website www.moldremovalrescue.com which provides solutions for mold problems.

More Work Coming In Than You Can Produce? – Here’s Some Guidance and Advice

The Joint Center for Housing Studies at Harvard University indicates that the dollars spent on remodeling will increase by 8.6% by the end of 2016.   Most remodelers are already feeling this surge in spending as their backlog of work keeps increasing and at the same time the number of estimates they need to push out is also increasing.  Smart business owners seeing this happening are already increasing their field staff capacity to take advantage of the work.  Adding staff can help get more work done.  However if production efficiency and organization are challenged due to the growth profits can quickly drop. To help these contractors out I have searched out and assembled the list of articles below. Each article is helpful, but collectively they can help identify a plan of action contractors can take to protect the profits they expect to earn by growing their businesses.

A good number of contractors have been contacting me for help in this area.  Most share now that they have more staff they are challenged to properly manage them and the sequence of work. Others report they have come to realize they may have hired the wrong staff.  The solutions to these problems are actually not that difficult to put in place.  What typically gets in the way is not knowing what systems to put in place to support the growth and how to get things started. 

Here is one message I got just today, from an employee:

“Hello. I was hired 3 years ago as an estimator. We had 2 carpenters and a super. We now have grown into 7 carpenters, super, production manager and additional secretary. None of our carpenters are "lead carpenters" but about 4 think they are. We are experiencing some growing pains for sure so any input would help. Thanks.”

So, here is my list of helpful articles for contractors seeking to advance and grow their production capabilities.  The articles will help enlighten you to what your options are as well as several important considerations to be aware of before you jump in and get things started. I hope you find the info helpful and motivating.

List of articles about growing production capacity at a Remodeling Company:

Options for Managing Production

What’s the Difference Between a Production Manager and a Production Supervisor?

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

Is He Really a Lead Carpenter?

Key Differences Between Carpenters and Great Lead Carpenters: Part 1

Key Differences Between Carpenters and Great Lead Carpenters: Part 2

Checklist for Implementing the Lead Carpenter System

Considerations for Putting the Right Employee on the Right Job

Help With Evolving From Contractor to Construction Business Owner

What’s the Difference Between a Production Manager and a Production Supervisor?

As a remodeling contractor seeks to grow his or her business past a million dollars it’s important to bring someone on to help with getting the work done. Without doing so the business owner can quickly become overwhelmed wearing too many hats.   At this stage in business it’s important to decide whether you want to hire a Production Supervisor or a Production Manager. Before making the decision be clear on the difference between the two and how you should decide.

What is a Production Supervisor?

A Production Supervisor supervises the work to be completed as well as the employees and other workers doing the work.   The key word here is supervises.  

With a Production Supervisor on-staff employees performing the work typically have little authority to make decisions about how the work will be done, who will do what, and in what sequence the work should be performed.   All of those decisions are typically left up to the Production Supervisor.

When subcontractors become involved in the work they too will be supervised by the Production Supervisor. They will be required to contact the supervisor for project information, onsite decisions and to discuss solutions when challenges and or discrepancies occur at the jobsite.

If the home owner has questions, wants to make changes, and or is upset about something they too would typically be referred to the Production Supervisor.

This method of production management works well if your business relies heavily on subcontractors and or only hires carpenters with little or no project management experience. You might want to think of the production supervisor as sort of a baby sitter of both the job as well as the workforce used to complete the work. If you decide on using a production supervisor be sure to hire employees who are OK with being supervised all the time and are not interested in career advancement.

What is a Production Manager?

Unlike a Production Supervisor a Production Manager manages the work and the workers involved in completing projects. The key word here is manages.

With a Production Manager on-staff employees working on the job should have the skills and or be trained to independently follow written work orders. They should also have the skills to make on-the-job decisions about how the work will be done, what equipment is needed, when to order materials to maintain efficiency and what to do when common challenges and discrepancies occur. To facilitate this ability many remodeling companies hire or create real lead carpenters.

When subcontractors become involved in the work they are typically managed by the on-site project foreman or the Lead Carpenter. Onsite decisions and discussion about challenges or discrepancies with their contracted work descriptions are commonly solved right at the job site. This can be very cost effective because the Lead Carpenter or foreman is already at the jobsite, saving hours of commuting time and other related costs for the Production Manager.

If the home owner has questions, wants to make changes, and or is upset about something, again those things are typically handled right at the jobsite. The Lead Carpenter can reach out to the Production Manager for things outside of his expertise or authority.

This method of production management only works well if your business hires and or trains field staff to take on project management responsibilities. You might want to think of the Production Manager as the Production Mentor.  In addition to organizing project schedules and securing the right resources so site employees can be successful, the production manager is also typically responsible to mentor the company’s field staff so he or she isn’t required to supervise at the job site. If you decide on using a Production Manager be sure to hire employees who have the cognitive ability and desire to learn project management skills.

Is It Worth It To Risk Using 1099 Workers To Avoid Employee Responsibilities?

Many contractors are using what are refer to as 1099 workers to avoid employee and payroll related administrative responsibilities and financial costs.  Some use this tactic to reduce their costs to help win bids and or make more money. If you never get caught you may feel or believe it was worth it. On the other hand if you get caught, whether you knew what you were doing was illegal or you really believed what you were doing was OK, the financial and litigation related costs can kill your business. The chance of this happening has dramatically increased in certain areas of the country because Washington is offering money to states to help them do so. Read on to find out about what is already happening in Virginia.

In a well written article written by Courtney Malveaux of Thompson McMullan PC, Courtney shares a scary story where a GC jobsite is inspected by VA’s version of OSHA and makes and on-site determination that certain “Independent Contractors” were actually employees, triggering the automatic loss of any ability to negotiate violation penalty reductions. The story gets much scarier as you read on; I suggest you read the whole article.

“Under the new policy, if the inspector declares that your contractors should be considered employees, watch out.  You’re paying full freight on each penalty, without exception.  Your only recourse would be legal action.” Courtney Malveaux

Guilty until proven innocent

The part I found most scary in the story was that the contractors who take this risk, for whatever reason they justify doing so, are automatically assumed to be guilty by the inspectors.   If that happens to you it means you are guilty until proven innocent, at your own expense to try to do so. And, even if you eventually win your legal battle, you are not entitled to receive any damages for your challenges. So your legal fees cannot be recouped.

That means you have to pay up on any fines, at their full rate (anywhere from $7K to 70K per violation) right away. Then you have to decide if you are willing to wait for your legal case to make it through a legal system sponsored by the same entity that is accusing your business.

Collateral damages may be unavoidable

From what I have witness I know the story can go even further than explained in the article. For example if the 1099’s are deemed to be employees you may also become responsible for all employment related taxes on all the money you have paid to them to date, plus fines of course. The same may happen with Workers Compensation and General Liability insurance coverage. Again the likelihood of these things happening has also become more likely. For example in Massachusetts several different state departments are participating in a memorandum of understanding, committing to refer observed violators discovered by each department to the other departments. In a 2012 article I reported on how OSHA and EPA have done the same regarding RRP Inspections.

The Bottom Line

As a business owner only you can decide the level of risk you are willing to take on by avoiding employment responsibilities. I recognize by doing so you may be saving your business and your customers money. At the same time by doing so perhaps both of you are preventing a worker, or many workers, from having the employment rights and benefits your customers expect and even demand at their jobs. Some know they are doing it. Some, I hope, just found out.

Key Differences Between Carpenters and Great Lead Carpenters: Part 2

As I pointed out in part one of this article skilled carpenters are assumed to have the trade skills needed to do the work at hand and to understand construction. But just because a carpenter has these skills doesn’t necessarily also mean he or she has the rest of what it takes to be a successful Lead Carpenter. In the first article I listed the basic skills and thinking skills a carpenter must possess to be eligible to become a Lead Carpenter. Below is the second half of a list of key skills a carpenter should have or will need to acquire to become a great Lead Carpenter. We will be covering these topics and others at our Lead Carpenter System Workshop for business owners coming this summer.

This second list describes the people skills and personal qualities a carpenter must possess before becoming a great Lead Carpenter. These are skills that can be learned and mastered while working as a carpenter. Training, supervision, mentoring and coaching by the business owner and or other leaders in the business can help the right carpenters acquire these very important skills. Before investing in a carpenter in these areas make sure your Lead Carpenter to be has the demonstrated cognitive ability and willingness to learn and apply such skills.

People Skills needed to be a Lead Carpenter

• Social: Has a natural ability to show understanding, friendliness, and respect for the feelings of others, but at the same time is able to assert oneself when appropriate. Also takes genuine interest in what people say and why they think and act the way they do.
• Negotiation: Ability to assess and identify common goals among different parties and at the same time clearly present their and the company’s position. Can also examine possible options and make reasonable compromises.
• Leadership: Can appropriately communicate thoughts and feelings to justify a position. Can also encourage or convince while making positive use of rules or values. Demonstrates the ability to have others believe in and trust in them because of demonstrated competence and honesty.
• Teamwork: Contributes to the team offering ideas and effort, but also does his or her share of the work to be done. Has the ability to encourage other team members and can resolve differences for the benefit of the team. At the same time can responsibly and appropriately challenge existing procedures, policies, or authorities for constructive purposes.
• Cultural Diversity: Works well with people having different ethnic, social, or educational backgrounds and understands the cultural differences of different groups. Can also help the people in different groups make and embrace cultural adjustments when necessary.

Personal qualities needed to be a Lead Carpenter

• Self-Esteem: Understands how beliefs affect how others feel and act. Can identify irrational or harmful beliefs they may have and understand how to change and or adjust them when needed.
• Self-Management: Honestly assesses his or her knowledge and skills accurately. Proactively sets specific and realistic personal as well as professional goals and can self monitor progress toward those goals.
• Responsibility: Works hard to reach goals, even if the task is unpleasant. Will consistently do quality work and maintains a high standard of attendance, honesty, energy, and optimism.

Click here to see a Job Description for a Lead carpenter

Click here to read part one of this article

Other articles to help contractors and construction business owners choose and grow the right carpenters into Lead Carpenters

Helping Lead Carpenters Become Managers Benefits Them and The Business

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

Interesting Considerations For Putting The Right Employee On The Right Job

Getting Employees to Think Like Owners

Key Differences Between Carpenters and Great Lead Carpenters: Part 1

Skilled Carpenters are assumed to have the trade skills needed to do the work at hand and to understand construction. But just because a carpenter has these skills doesn’t necessarily also mean he or she has the rest of what it takes to be a successful Lead Carpenter. Below is the first half of a list of key skills a carpenter should have or will need to acquire to become a great Lead Carpenter. I created this list to help carpenters and construction business owners improve their chances of success developing Lead Carpenters and a true Lead Carpenter System.  

This first list describes the basic skills and thinking skills a carpenter must possess to be eligible to become a Lead Carpenter. These are skills that should be inherent to the carpenter already, learned from an early age through schooling and practical application as a person evolves from childhood to adulthood.   If a carpenter does not already possess these skills the chances of success as a Lead Carpenter will be greatly compromised.

In my next article I will discuss the people skills and personal qualities a great Lead Carpenter must learn and develop.

Basic skills needed to be a Lead Carpenter:

• Speaking: Ability to speak clearly including selecting language, tone of voice, and gestures appropriate to a specific audience.
• Listening: Listens carefully to what people say, noting tone of voice and their body language, then can respond in a way that shows a true understanding of what is said.
• Reading: Ability to identify relevant facts and locate information in books or manuals. Ability to find the meanings of unknown words and use computers to find information.
• Writing: Ability to write ideas completely and accurately with proper grammar, spelling, and punctuation. Also able to use computers to communicate information in writing.
• Mathematics: Ability to use numbers, fractions, and percentages to solve problems and communicate solutions.

Thinking skills needed to be a Lead Carpenter

• Creative Thinking: Has the ability and is not afraid to use imagination freely to combine ideas or information in new ways. Can easily make connections between ideas that seem unrelated to others.
• Problem-Solving: Can easily recognize a problem, identify why it is a problem, create and implement a solution, and naturally watches to see how well attempted solutions work so they can be revise as needed.
• Decision Making: Can identify goals, suggest alternatives and gather information about them. Can identify and weigh pros/cons and choose the best alternative along with a plan to follow through.
• Visualization: The ability to imagine, strategize and sequence the construction of a building, object or system by looking at a blueprint or drawing.

Don't miss Part-2 of the list

Be sure to come back here to find the second half of this checklist to learn about people skills and personal qualities a great Lead Carpenter must learn and develop. It will be published in a few days.   To be automatically notified via email when new blogs are published simply subscribe to the Design/Builders Blog.

Click here to see a Job Description for a Lead carpenter

Other articles to help contractors and construction business owners choose and grow the right carpenters into Lead Carpenters

Evolve From Being A Contractor To Being A Construction Business Owner

Afraid To Hire Production Employees For Fear I Would Run Out Of Work For Them

A lead-carpenter system helps both the business and the employees to grow

Compliance Checklist: Will You Be Ready If OSHA Visits Your Job Site?

Construction Equipment: Should You Buy or Rent?

The decision to rent or buy equipment for construction work depends on different factors for each business, according to Peter Gregory, Wells Fargo Construction Group Equipment Finance VP. He says that while renting is often a more attractive option in a tough economy when construction activity has slowed down, companies that need and use construction equipment regularly must decide how buying affects their bottom line.

Advantages of Buying

The advantages of buying the equipment your company needs to perform revenue-generating work include:

• immediate ownership
• deductions for depreciation
• interest to save on taxes
• onsite availability of equipment when work needs to be done

Note that deductions for depreciation are just one tax aspect of buying equipment, and any businesses subject to the Alternative Minimum Tax experience depreciation as a penalty, not a credit.

Thomas Westerkamp of Facilities.net says it makes sense to buy equipment that is just as expensive to rent as to buy, as well as equipment needed immediately in emergency situations to prevent loss or damage, or danger to health and safety, such as emergency generators and portable coolers.

Advantages of Renting

Equipment such as a scissor lift that might be used on a rare occasion would be wise to rent, allowing you to reallocate money towards buying equipment used more often on job sites. This way, the cost of maintenance is eliminated while the use of the equipment is still available. Renting is also advised when trying out new equipment and deciding if it's versatile, useful, and efficient for owning in the future.

How to Decide

One alternative to consider is to purchase quality used equipment which can bring the purchase price down from a new unit, while still providing the same capabilities and convenience of owning. But in this case, buyers beware! Check all safety equipment with the purchase, inspect it closely, and check all manuals and accessories to ensure it's in good condition for your purpose.

Other considerations when deciding to rent or buy include:

• Was the unit previously used as a rental?
• What are all the costs, initial and ongoing, of the rental or purchase?
• What agreements or contracts are part of the deal (purchase or rental) and what is included in them as far as dealer references, equipment demonstration, operator training, and terms of use and return?
• If you buy, will it eventually pay for itself when you consider the time saved and renting fees?
• Does the machine show signs of having been repaired? If so, what is the quality of the repair?

The decision about buying or renting really depends on unique business factors at individual companies. Mid Country Machinery owner Lucas Peed advises that the decision to buy or rent has a lot to do with the type of contractor business. He says local contractors are more likely to buy equipment to get the tax breaks and equity, while general contractors who travel a lot are more likely to rent equipment rather than haul it out of state for jobs, which adds to the cost of operation and ownership. Discuss your potential investment with your accountant and be thoughtful of the longevity of your potential purchase. If it will be an asset to your business for years to come, continue to bring new business, and improve the efficiency of your work, it is a wise investment.

Guest Blogger: Heidi Cardenas is a freelance writer with a background in human resources, business administration, technical writing and corporate communications. She specializes in human resources, business and personal finance, small-business advice and home improvement. She enjoys creating informational content for clients including blog posts, articles, white papers, case studies, and talking points, as well as business documents such as sales letters, business plans and strategic plans.

Building the Right Team: How to Work With the Architect, Subs & Designers

As a contractor, you know that building a custom home or doing a major remodel is not a one-person job. You need to work with an architect, an interior designer, one or more sub-contractors and any number of laborers—and, of course, the homeowner. Getting everyone on the same page can be the difference between an amazing house and a patchwork disaster.

Who’s the Boss?

The buck stops with the owner. The one who is paying for the work is the top dog, even if it doesn't always feel that way. Hurricane-torn Florida has some of the strictest construction laws in the nation, so let’s use it as our model. A full construction team may consist of an architect or engineer, a building contractor and an interior designer. The contractor may hire subcontractors. All of these people are, in some ways, like employees of the owner.

At the top of the chain is the architect. Since he or she is the one who has taken the owner’s ideas and turned them into schematics, all significant changes need to go through him (or her). These changes are done via a written document called a change order. The use of a change order is important and often costs money, so get agreement from the owner and interior designer before you issue one.

The Social Aspect

In a study about collaboration, students from the architecture, interior design and construction schools of Mississippi State University were blended into different collaborative groups, ranging from highly engaged to mainly separated. The findings showed that the groups with the most social interaction had the most creative outcomes, though not the fastest completion rates.

Bring your construction team and your interior designer together for coffee and make them talk. With construction, speed is not necessarily your friend. Some jobs take time to do them right. If your people cannot find the time to sit and understand the project, then they will not have the time to do the job correctly. For example, a designer working with a contractor on windows and lighting might meet at a Shade Store showroom to point out ideas as they discuss them. They do not need to become fast friends, but they do need to work together on a creative level.

The Subs

Most contractors do not have a licensed person on their team who can handle all the components of a construction job. For roofing, foundations, plumbing and electrical, they will usually subcontract to a licensed professional and or expert. In many cases, the interior designer may be a subcontractor of the lead contractor, making him the designer’s de facto boss. Whichever way you structure the construction process, you have some legal issues to handle. Make sure to meet with and manage your subs since, at the end of the day, you are responsible for paying them.

Guest Blogger: Paul Reyes-Fournier has served as the chief financial officer for social service organizations, churches and schools. He created his own marketing firm, RF Media. Paul holds a BS in physics and an MBA.

Why Building a Backlog of Work Could Cost Some Contractors a Lot of Money

Builders, remodelers and lumber dealers often get in trouble with lumber framing packages by overlooking the obvious…the volatile lumber market. Most contractors and lumber dealers do not have the luxury of pricing a job today, signing it tomorrow and buying the required materials the next day. By the time a job is priced, signed and the lumber gets delivered to the jobsite 30, 60 or even 90 or more days may have passed and lumber prices may have changed as much as 20%. At the Estimating Workshops I did this concern comes up quite often and attendees often share how their profits are affected as a result.

An educated guess is much better than a Wild Ass Guess!

Matt Layman is the publisher of The Layman’s Lumber Guide. I met Matt through LinkedIn. His expertise is forecasting “when” lumber market pricing will change. Having and using the information he assembles through his research can help contractors and lumber dealers price future jobs involving framing materials with precision.

According to Matt lumber prices are reported twice weekly.

He says some weeks do not change at all. However he also points out that 70% of the time they do change by an average 2.5% each week or 10% per month.   Based on those realities a contractor who estimates a framing package using today’s lumber costs at $10,000 may end actually paying over $13,000 for that same package 90 days later. For those of you who understand how margins and markups work, not only will the contractor have lost the $3300 due to price increases, but also the gross profit margin on that difference. At a 50% markup that’s another $1650 of gross profit that could have been included in the sell price to help cover overhead and profit.

If as a contractor you buy a lot of framing materials you may want to consider subscribing to Matt’s monthly publication called the Lumber Market Blueprint. I also think lumber dealers serving contractors could share this information with their customers on a regular basis. Doing so would be a great service that could help differentiate them in the marketplace.

The image above is an excerpt from the February issue of Matt’s Lumber Market Blueprint. Notice that the information not only includes his predictions for the next 30, 60 and 90 days, he also offers some insight as to why he makes his predictions. I suggest by knowing the why’s behind his predictions you can consider your own pricing adjustments if for any reason conditions change dramatically during the month.

I appreciate Matt allowing me to share this information with you.

If you are a contractor do any of your lumber dealers share this kind of info with you?   If so, it would be great if you shared the name of the dealer with us as well as an example about how the information has helped you.