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Do You Say Yes to the Wrong Remodeling Jobs?

Say Yes to the Right Remodeling Jobs

The opportunity cost of saying yes to bad remodeling jobs – rather than saying yes to the right jobs – can be devastating. It’s the difference between big profits or payroll stress.

In my last blog on Nailing Your Job Mix, we covered the importance of putting together the best possible winning hand of cards – high-value, high-profit job types. That starts with knowing exactly what your ideal criteria are. Not unlike a strong set of compatibility factors to form a great marriage or long-term partnership.

The right jobs DO come along. The question is this. Will you be ready to say “heck yeah” when they do? That’s only possible if you aren’t buried in bad jobs that eat away at your time and bottom line.

Saying no to projects is as hard as breaking up. Let’s be real. It can cause fear or second-guessing yourself.

Yet, as Alexander Graham Bell said, “When one door closes, another opens.” He should know. Most inventors survive multiple failures before they learn to pick the winners.


If you would like to discuss this, contractor coaching, or any other business strategies, please give us a call at 888-252-8998 or email us at [email protected]


3 Starter Steps to Land the Right Jobs

1. Value your own time.

Valuing your worth, your talent, and your time is the first step. Also, remind yourself, rationally speaking, that there is plenty of work out there.

Adopt an abundance versus a scarcity mindset – meaning, know there is a lot of work out there, and you can be choosy.

Why do contractors take bad jobs

Even in the worst of times, says the Housing Crisis of 2008, there were still $500 million in US custom home and remodeling projects for the taking! And while new home builds shrank, many homeowners remodeled instead and invested in home equity. So, make sure you’ve defined your ideal mix of jobs – based on the highest profit goals for each job type, where your team excels, and what you enjoy most.

2. Proactively choose jobs that fit your ideal job mix.

Contractors are known for being “sales-reactive” – meaning, saying yes, trying to please, and stuffing in another yet one more job even if it’s a bad one. That only drives up your stress and workload, but not your profitability.

Instead, be proactive. Know your ideal job mix, and then:

a) target market to those ideal customers; and

b) patiently wait for those jobs to find you.

Again, if you keep filling your dance card for the first thing that comes along…well, you know how that ends. Most contractors can stack up the last 12 months of jobs in order of profitability. Armed with that information, you can identify the patterns of what made each project work out from a profit standpoint (revenue minus variable and fixed costs). Use your insight to go after more of the most profitable ones.

3. Create a lead-qualifying process to identify your best customers

Getting leads is okay. Prequalifying those prospects is golden. Do that with a ready-made email questionnaire that helps you match customers to ideal job types before your first sales conversation. Aspire has many job aids like this, but here’s one prequalifying example to zone in on the highest-value leads.

Customer Questionnaire

Sample: Customer Email Questionnaire

  1. What room/s do you want to remodel or expand?
  2. Why do you want this done?
  3. How long have you lived in your home, and how long do you plan to stay?
  4. How long have you been considering this remodeling project?
  5. What does the finished room(s) look like? How does it make you feel?
  6. Any special appliances, features, or brands you will insist on? e., Brizo faucets?
  7. Have you remodeled before? What was that like?
  8. Do you have photos, drawings, or ideas that help share your vision – such as magazines, Houzz, or Pinterest?
  9. Is there an interior designer or decorator involved? Do you want us to recommend one?
  10. Will you stay within a specific investment amount? What’s your range?
  11. What is your ideal timeline – both start and completion date?
  12. Are you speaking with any other contractors? Is there a reason you decided against working with one of them?
  13. Is there something you hope I will do differently?
  14. How will you decide which contractor is the best fit for the job?
  15. How will you measure whether your project has been successful?
  16. Will there be anyone else involved in making decisions about this project?
  17. Are you looking for an estimate or a fixed price for this project?
  18. Do you have money saved or make financing arrangements? Both?
  19. What are your communication preferences? Are you comfortable using an app or computer for reviewing contracts, making selections, and paying regular invoices as work progresses?
  20. What motivates you to create your new space? Convenience? Uniqueness? Multi-functionality? Street of Dreams beauty? Family-friendly? Easy to clean and maintain? Personalized to your passion (music, wildlife, skiing)? Resale value?

The sea is vast, the fish a’ plenty

Residential construction is set to evolve and expand throughout the next decade, following the Long Recovery from 2009 to 2019, followed by the Stay-At-Home Boom of 2020.

Remodeling expanded over the last decade with 150 million projects completed and $1.5 trillion (about $4,600 per person in the US) in home improvement. The current supply of general contractors can still not meet high consumer demand. So, believe us, the work is out there – although now is the time to watch early signs of recession due to inflation and higher interest rates. All said, the U.S. outlook is strong.

So, you can afford to be choosy and hold out for “the real thing.” So get comfortable saying N-O to the wrong jobs.

And don’t sweat it. There is plenty of fish in the sea.

Read more in our popular paper: Why Contractors Take Bad Jobs

Cash-Strapped, Stressed, Yet Working Harder Than Ever?

Nail Your Cash Flow with fully loaded labor costs

Are there days when you’re not sure if you’ll make payroll? Weeks when you worry about affording your next critical hire? Months when you’re actively remodeling bathrooms, kitchens, or entire homes – but waiting for a cash avalanche upon completion?

If so, read on. You’re probably not accounting for the full cost of each job, let alone billing your customers on a regular, rhythmic, real-time cadence as your jobs progress. And that will negatively impact a positive cash flow on a regular basis.

Here’s the good news. You can nail your cash flow and build a predictable stream of money coming into your business on a regular basis. Start by not acting like a charity or a bank. Instead, account for the genuine cost of each job.

Limiting age-old beliefs get in our way 

For decades – centuries actually– builders were taught to be a bank or a charity. In a couple of ways: 

  1. Were you taught to collect payment after project milestones or in the last mile as the job wrapped up? That leads to cash famines then feasts. That’s a bank, not a builder.
  2. Were you expected to carry big dollars in fixed costs or operating expenses – things like labor benefits, tax, and equipment allocation? Those costs actually belong to each job’s variable costs and should be built upfront into your cost estimates. Without doing so, you are giving away your time, talent, and tools for free. That’s charity, not business. 

To get a handle on your future cash flow and prevent throwing away money:

  • First, change your mindset. Start with a personal belief and commitment to be profitable every week, month, and year – not just sometimes, the end of a project, or year-end reconciliation. 
  • Second, start regulating your cash flow. Calculate your job costs differently than you imagined – both in “what counts” and “how often”. 
  • Third, never give away your talent and time for free. That is literally throwing profits down the dumpster. Start accounting for the true and full cost of performing every remodeling and homebuilding job.

Fully account for your true and full labor costs3 Ways to Calculate Your True Job Costs 

Little revs up Aspire’s business coaching staff more than the unfairness of general contractors giving away your assets for free; that is, the 3Ts: your tools (equipment), your time, and your talent. To avoid miscalculation and nail your cash flow, ensure that you: 

1. Account for all related job costs.

Think of these as the non-human costs that eat at your profits if not built into your estimates, worksheets, and billing systems. These costs include vehicles, gas, equipment, tools, warehousing, and shops. One job may not eat all of it – so estimate the percentage used across relevant jobs over one or more years. If you buy special equipment for a special job, apply the cost to that job and then depreciate it over time.

Looking at the 25 Must-Have Kitchen Features That Boost Storage, Convenience, and Style, it’s easy to see how special screws, expensive drill bits, or one-time dust collectors might add up. Failing to include those costs to your customer is the same as giving away your tools for free. If the customer wants to keep them afterward, that’s a different story that you can easily manage through effective communication.

2. Track project management and your own time – job by job.

You are human cost #1. When you’re the owner, you wear multiple hats including salesperson, estimator, development, project management, and on-the-job time. In today’s changing labor market, you’ve been smart enough to hire a dedicated, professional project manager (PM) to free up your time for strategic and business development. Either way, build yourself and your PM into job estimates, adjusting your and PM actual hours in real-time.

Because let’s face it – if you’re just taking out those salaries from your profit at the end of the year, you’ve created a huge profit leak. Your value needs to be accounted for job by job – not a fixed slush fund! What’s more, it will be hard to expand your business or replace yourself one day if you have no baseline of what each job requires in terms of you, the owner, and/or PM time. 

3. Track fully loaded labor hours.

These are human costs #2. Think of your labor as limited inventory (not counting trade partners of course). You only have so much of it because your tradespeople and partners are each typically available 2080 hours per year assuming no illness and 15 days (about 2 weeks) of holidays.

On top of that, labor costs you more than just hourly wages or salaries. You incur more costs through payroll taxes, benefits, workers compensation insurance, meals, supplies, and training to hit a true labor cost. If you aren’t passing the full cost onto your customers, you’re giving away their time and talent for free.

Your $20 hourly employee is more like $26.33 hourly

Let’s make this less theoretical with a real example:

  • One of your crew makes $20/hour, and assume you pay $2,000 in payroll taxes, $1,000 in insurance, $2,000 in benefits, and $5,000 in supplies for that one employee. Add together $2,000, $1,000, $2,000, and $5,000 to get a labor burden cost of $10,000. Then, multiply the employee’s hourly wage by the number of hours available for work per year to determine the annual payrolllabor cost.
  • Now, add the annual payroll labor cost to the labor burden cost by multiplying $20 per hour by 2,080 hours resulting in a $41,600 annual payroll labor cost. Add the $41,600 with the $10,000 labor burden to get $51,600.
  • Now, divide your result by the number of actual hours worked to calculate the fully burdened labor cost. In this example, an annualized salary of $51,600 is divided by 1,960 hours to get a fully burdened labor cost of $26.33 per hour. 
  • So, that means the total cost to employ your worker is $26.33 per hour of actual work, not $20 per hour. The same approach applies to your field crews and office staff alike. Your crews will be 100% allocated to each job, while office staff time is spread across multiple jobs (marketing, finance, administrative, and so on).

See the difference that $6.33 per hour per employee makes to job estimates and customer billing? It pays off in profits – and more money you keep from each job.

Lots of items going into nailing cash flow for contractors but start with fully loaded labor costs

Nail Your Cash Flow in 2022 

So, remember: Manage all your job costs in real-time and make corrections across the project between estimates and actuals.

Most importantly, value your time, tools, and talented team. Account for them all in each job.

Your customers will learn to value skilled construction trades and your business differently. Just as Aspire sees it – as a complex, customized, and specialized service where the price is NOT the primary driver. Value is. You’re not a ready-made, off-the-shelf product. That’s Home Depot – not you! 😊

So, don’t be shy about fully loading your true cost of labor. Your cash flow will thank you. So will your team.

Download our full paper: Business Strategy for Contractors