What would happen if the pilot of your next flight cut back the throttle to save fuel just as the plane was leaving the runway? It wouldn't be pretty. Similarly, business-savvy remodelers seem to morph into their irrational clients when it comes to technology projects, expecting it to take less time and money than predicted. They throttle back too soon.
How much is enough? The metrics below show actual numbers for a $1 million remodeling company with five full-time employees split between field and office. The larger you get, the smaller the percentage of sales you'll need to budget, but the higher the actual dollars.
These numbers should get you in the ballpark, but remember that special projects, such as a new integrated software system, can double or triple your regular annual budget in the first year. Budget enough money to get your technology “plane” off the runway and to keep it flying.
Note: These numbers are for remodelers; new-home builders can often budget less as a percent of sales because their cost/price structure is so different. —Joe Stoddard is a process/technology consultant to the building industry. Contact him at email@example.com.