Many remodelers are curious about the benchmark for how much dollar volume a lead carpenter can produce in one year. To calculate this figure, start with a projected sales volume. We'll say it's $1.5 million for this example. Divide this figure by the 2,000 hours a lead works per year. In this case, $1.5 million ÷ 2,000 = $750. All your leads must produce $750 per hour total to achieve the projected sales volume. If you have three leads, each lead must produce $250 per hour, or, in one month, each lead would have to produce $40,000 in sales volume. A $200,000 project would need to be completed in five months.
This figure differs based on how companies work. I suggest companies set their own benchmark by analyzing the following:
What size are your jobs? One large job completed in a year may tell you that a lead can produce $1 million in volume. However, trying to complete $1 million by doing 20 small projects is next to impossible.
Do you use in-house or subbed-out labor? If the job is mostly in-house labor, the volume will be lower because it will require a step-by-step approach. In other words, one step must be completed before another starts, because the same labor force is performing it. If the labor is subbed out, multiple tasks can be completed at the same time, moving the job along faster.
Does your target market involve expensive labor and finishes or is the volume created by size? Some companies work in an environment where labor and finishes cost twice as much as in another market. This will skew the numbers by telling us that a lead can produce $500,000 in work when the work is essentially worth less but requires high wages and expensive finishes. --Tim Faller, Field Training Services, www.leadcarpenter.com.