The silent PROFIT KILLER in the Roofing Industry - Hidden Costs.

Let us introduce you to a silent profit killer, hidden costs. What makes them so dangerous is that

you won’t notice them until your money is gone, if you know your numbers.

Has it happened to you that your projected profits are finally much less than you expected? If

you're selling at the right price, keeping your expenses within your budget, and your sales aren't a problem, it's most likely because of hidden costs, they usually appear in these four situations:

1. Estimating mistakes. These can be caused by these four factors:

a. Due to lack of training and experience.

b. Rushing through appointments.

c. Passing inaccurate information.

d. If your sales team or estimators are well-trained and your prices of materials and

labor are up to date, you should have no problem in this regard.

2. Repairs/punch lists due to bad supervision/installation. You’ll always have to fix your mess

and no matter which crew or supervisor was responsible, your company’s name is on the

line. Ensure the quality of your installation process and maintain the standards of the

manufacturers' warranty. The results of a bad installation can come to light months or even

years later and your company will have to bear the time and the cost necessary to fix the

problem.

3. Unproductive use of assets. Do you have materials in stock? Trucks that you’re not using?

Are your people using your trucks for their personal time? The cost of keeping them or not

using them for the benefit of the company is something that will play against you month

after month. Try to be precise when acquiring an asset, plan the use you will give it, and ensure that the cost/benefit ratio is in your favor.

4. Not keeping installation evidence. In this business not everything is based on trust, in

some jobs you’re going to run into some extra costs, such as wood replacement, second

layer tear off, and more. It’ll be much easier to collect on these change orders if you have the

proper evidence, saving you money and the relationship with the homeowner.

In conclusion, hidden costs can be a silent profit killer, eroding your projected profits without your knowledge. To protect your bottom line, it is essential to understand and address these hidden costs. By avoiding estimating mistakes through proper training and accurate information, ensuring quality supervision and installation to avoid costly repairs, optimizing asset utilization, and keeping proper installation evidence, you can safeguard your finances and maintain a positive relationship with your customers. Remember, knowing your numbers and proactively identifying and mitigating hidden costs are crucial for long-term business success.