This year’s Business Benchmarking survey looks at typical remodeling company expenses in five revenue categories. In this space, we wanted to compare these results with those from earlier surveys. Although reported in 2009, current data covers 2008 expenses and is so labeled; likewise for 2006 expenses (reported in our December 2007 issue). The 2003 data come from the “ Cost of Doing Business Survey” (March 2005), a REMODELING and National Association of Home Builders’ Remodelers joint venture. That study used just two revenue categories: less than $1 million, and $1 million or more, so we have aggregated more recent data here in the same way.
Typically, these kinds of percentages are based on the amount of money a company earns. In this case, however, survey revenue data were problematic and, as was the case with the 2006 data, we chose to base these percentages on the amount of money a company spends.
That said, the data confirm what we already knew — 2008 was a tough year. The cost of construction has risen steadily since 2003, but recession-fueled competition has forced deep cuts in overhead, chiefly in worker benefits such as insurance and profit-sharing, but also in education and training, vehicle allowances, and other perks.
Smaller companies have had to make fewer adjustments, but the data show that overhead for this group is on the rise. This is probably not a case of actually laying out more money and is more likely a result of fewer jobs and less revenue coming in. But it’s something that small operations with little in cash reserves should be keeping an eye on.
—Sal Alfano, editorial director, REMODELING.
Click here for a spreasheet with more data.