Remodeler Phil Branstetter not only adds 1% of the total estimate to the final budget to cover warranty work, he also marks it up as part of the budget. The owner of R.L. Rider Remodeling in Lansing, Mich., considers this part of the cost of taking care of his clients — something that is very important since his business is 100% repeat and referral. “For any kind of repeat/referral database, you must take care of those little things above and beyond even the legitimate ones,” he says
Branstetter offers a two-year warranty, but often does work past the end of the warranty. He says another option to cover these costs would be to add another 1% to his margin, but that method does not allow him to track costs for warranties. “This allows me to track the labor and materials,” he says.
Branstetter includes a line item for warranty work in his proposal, and his clients all accept it as part of the cost of their project. He says taking care of warranty work is more costeffective than generating a new lead.
Another line item he includes in the estimate is for the cost of site protection, which includes the cost of floor coverings and dust control.
“We break down our jobs by task. When I look at how much it costs, I make sure I'm recovering it as part of job cost,” he says. HomeTech estimating software allows him to easily modify line items.
Branstetter says providing cost coverage for small items such as warranty work and site protection is crucial. “Once you contract the job, if you've done it right, you make the kind of money you want, you meet the schedule, and the client is happy,” he says.