This was the overriding message delivered by Rob Baugher, a remodeler with 44 years of experience and owner of Baugher Inc. based in Birmingham, Ala., during an International Builders’ Show seminar in Orlando, Fla. earlier this month. He summed up his philosophy as follows:
“Turn overhead dollars into profit dollars by working faster.”
The key to increasing profits and making your remodeling operations more efficient is to gradually change each day and to hone a system in which you:
- Dissect each project like an autopsy
- Examine and ask questions
- Diagnose and learn
Baugher suggested always having a full-time project manager onsite to make decisions, plan efficiently, avoid delays and monitor job costs so they are defined and controlled.
When remodeling jobs run quicker and more efficiently, tradespeople make more money when they work for your company, Baugher said.
To further maximize profits, Baugher said remodelers should:
- Charge for design/pricing estimates
- Collect 100% of the cost of change orders and add-ons upfront
- Require 50% of the cost of the job to be paid at the signing of the contract
- Aim for an 88% mark up and 46% margin on jobs
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