The National Association of Home Builders conducted the Cost of Doing Business survey of remodelers in September 2004 to provide a detailed picture of the financial performance of remodeling companies. The survey questionnaire was mailed to a randomly selected sample of about 3,000 remodelers. From this sample, 195 usable responses were received and checked for consistency. The full report is available through the National Association of Home Builders bookstore ( www.nahb.com) at both a member and non-member price.
Of the responding companies, 47% had revenues of more than $1 million and 53% had revenues of less than $1 million. The average revenue of all the respondents is $1,322,000. The average for smaller companies is $520,900. For the larger companies, the average revenue is $2,380,000. In the 1996 Cost of Doing Business Survey, the average revenue was $1,014,316.
Only 21% of companies have been in business less than 10 years.
In many of these charts and tables, we have included totals for all respondents, as well as responses broken down by company size. The full NAHB report includes a statistical breakdown of the top 25% and bottom 25% of performers by profitability.
Editors' note: Because we ask different questions in each new Cost of Doing Business Survey, it is impossible to compare all the details between the five surveys item by item. Wherever we were able to make comparisons between the current study and previous ones, we have done so.
How many jobs did you do in 2003?
What types of remodeling work did your company do in 2003?
Number of jobs in 2003
Did your net profits increase, decrease, or remain the same from 2002 to 2003?
How is your firm organized?
A sole proprietorship does not protect the personal assets of the owner. Larger companiesincorporate to protect assets. In an S Corp., taxes are paid not by the business but by the owners, eliminating double taxation. An LLC is a newer option, chosen by small businesses because it has the same liability protection of an S or C corporation but is less complicated to run.
What method do you use for your company's accounting?
Several respondents indicated that they use more than one method of accounting. Some companies might be converting from cash to percent complete accounting. Or they might use one method for their bookkeeping and one for tax purposes. Consultant Steve Maltzman recommends percentage of completion for bookkeeping and completed contract for taxes.
The field to office ratio for all respondents is 2.74 field personnel for every 1 office person. For smaller companies, the ratio is 2.71 field personnel for every 1 person in the office. For larger companies, it is 2.65 field personnel for every 1 office person.
Does your company employ full-time salespeople?
How did you pay your full-time salespeople in 2003?
*In the 1996 survey, only 22.5% of respondents paid salespeople by salary alone. The higher percentage shown here must mean that in this year's survey, the owners counted themselves as full-time salespeople.
Balance Sheet in 2003
Average in thousands of dollars
Payroll expenses as share of total revenue