is month, we begin a series of occasional
"business benchmarking" articles. e goal
is to shed light on some of the fundamental
concepts of running a remodeling and home
improvement firm. In this series, the focus is
on accounting and finance. We speak with
experts to take the guesswork out of a topic;
and in this issue, senior editor Kyle Clapham
tackles overhead.
We begin with the topic of overhead be-
cause it is the cornerstone of any business.
You cannot accurately price your jobs with-
out knowing your overhead. Too many
great craftsman and
project managers have
made the leap into en-
trepreneurship without
knowing what it takes
to set up a chart of ac-
counts and make choic-
es between their overall
business costs and the
costs of running each
job. Margin and mark-
up will be covered in a
future issue this year.
We hope that for some of you this article
(and this series of articles) will give you enough
information to get started on an educational
track—through NARI, NAHB, NKBA and
others—in which you improve the level of op-
tics and control of your business. It can make
all the difference. For others who already op-
erate at a high level, we hope this article is a
reminder of some of the intricacies involved
in overhead and potentially injects a new in-
sight that could lead to an opportunity for
improvement.
|
any of you truly manage your
business with great knowledge
and skill.
In fact, it is a great perk of this
job to know some of the best business leaders
in the industry. Amongst them, it is easy to see
the clear trade-offs they make between revenue
and margin to hit profitability targets. As most
of you know, more revenue does not necessarily
translate to greater profits.
Top remodelers, through experience and ed-
ucation, know how to balance profits with goals
for owners, employees and customers. On top
of it all, they take pride in
their craftsmanship and a
job well done. We at the
magazine see evidence of
this craftsmanship in the
hundreds of masterful
design award entries we
receive each year.
However, this level of
business know-how is not
the norm. Tracking data
from Harvard University
and others suggests a so-
bering figure: 20 percent of new remodeling
firms are out of business within five years of
launching. As Les Cunningham, owner of
Business Networks, says in this month's article
on how to calculate business overhead: "e
biggest lie in remodeling is if you do good,
quality work you'll be successful at business."
At Qualified Remodeler, we view our role
in the industry as an aid to remodeling firms.
rough our educational events, our news
and analysis on QualifiedRemodeler.com,
our annual Top 500 rankings, our Master
Design Awards and our articles within the
print edition, we seek to increase the level of
professionalism in the industry.
Remove the
Guesswork
At Qualified
Remodeler , we
view our role
in the industry
as an aid to
remodeling firms.
M
6 June 2017 QR QualifiedRemodeler.com
EDITORIAL DIRECTOR'S NOTE
Patrick L. O'Toole
Published by
SOLA Group, Inc.
1880 Oak Ave., Suite 350
Evanston, IL 60201
847.440.3000
Publisher and Patrick L. O'Toole
Editorial Director Patrick@SOLAbrands.com
Ext. 103
Senior Editor Kyle Clapham
Kyle@SOLAbrands.com
Ext. 107
Associate Editor Kacey Larsen
Kacey@SOLAbrands.com
Ext. 105
Proofreader Nancy Mueller-Truax
Audience Development Mike Serino
MSerino@magservgroup.com
Creative Director & Tracy Hegg
Production Manager Tracy@SOLAbrands.com
Senior Graphic Designer Erika Nygaard
Editorial Advisory Board Stephen Gidley, GMB, CAPS,
CGP, CGB, CGR, CPRC, CR
Jeffrey Holloway, CKD, CBD, CGR
Michael Nagel, CGR, CAPS
Scott R. Sevon, CGR, CAPS,
GMB, CGP, GMR
Donna Shirey, CGR, CAPS, CGP
Kenneth P. Skowronski, CR
Midwest and West Paul DeGrandis
Sales Manager Paul@SOLAbrands.com
Ext. 100
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Ext. 117
East Sales Manager Beth Emerich
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Ext. 101
National Automotive Tom Lutzke
Sales TLutzke@ACBusinessMedia.com
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Classifieds Mike@SOLAbrands.com
Ext. 102
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Ext. 106
Projects Manager Heidi Riedl
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of the National Association of the Remodeling Industry
and the NAHB Remodelers