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Nothing is More Important to Your Business than Job Costing

Martin Stout Roofing Industry Advice
April 17, 2019 at 2:30 p.m.

RCS Influencer Marty Stout says the best piece of advice for a new contractor is to learn to love job costing more than anything else you do.

You must track all of your costs and charge your active jobs for the costs they incur. If you send a crew to a job, when you are starting out that's you, charge the job for the daily cost of your truck and the fuel to get you there. When you have 10 jobs going or 100 jobs going the process will be the same.

Track the cost of your tools and charge the job for them, the NRCA has a great resource for how much a shovel costs per hour, use it. But a simple equation for this is if a tool cost me $500.00 and I think it should last 1 year ($300.00 divided by 260 work days in a year, equals $1.92) seems like a little thing but it adds up. How many tools do you have use to get a job done? Now add the cost to maintain the tool to the equation and track how long your tools really last and you are starting to get the true cost and your job needs to pay it. Or see what the rental cost of that tool is and charge the job based on that rate.

Know exactly how much material was bid, ordered and used on each and every job. Use Purchase Orders and organize them daily. As you grow your system will already be in place. Examine where your overages are and where your shortages are to better refine your bidding process. Look at the extra material at the end of the job and figure out why it's there, that material is profit that you can never spend. When you start to grow you will not be on the ground at the end of the day putting away the tools and collecting the trash, your men will, and the extra material will be in the trash. Watching it when you are starting out will teach you how to correct the problem before it starts.

When we are starting out, we think everything will work out with more work. But growth without order is only disorder magnified.

Martin Stout is president of Go Roof Tune Up, Inc.  See his full bio here.



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