Using Business Systems, Part 1

In McCadden’s opinion he feels that most remodeling businesses are a bricolage; a construction made of whatever materials are at hand; something created from a variety of available things.

“A remodeler might have a contract and change orders because they know they need to have them, but maybe they are working together,” says McCadden. “Does the change order maybe conflict with what his contract says? So if a remodeler is going to run a bricolage, they have to know the pieces that they’ve assembled, in some way, make sense.”

McCadden feels that in order for the pieces to make sense it’s important to start right with the financial systems. He hasn’t seen many remodeling companies that can estimate their labor the same way they can job cost their labor. Companies don’t remember to estimate travel expenses, phone use, insurance benefits, workers’ compensation, liability insurance, and if they’re not, they should be.

“Most people out in the field don’t all cost the same,” explains McCadden. “If you just keep estimating everyone at 40 and one guy costs you 30, that guy probably costs you 30 because his production value is 3/4 that of the guy that costs you 40. Therefore that guy shouldn’t be able to get the job done in the same number of hours. He may take more time to get the job done, but may still be within the budgeted labor costs.”

Proceed to the test