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Working in Reverse

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Working in Reverse

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    1. The average cost of kitchen projects in the $50,000 to $60,000 range.
    “This is using really nice upper-midrange quality products, cabinets, and appliances,” remodeler Darius Baker says.

    2. In this price range, Baker used eight projects to determine the average cost. The more projects compared, the more accurate the figures.
    In the $80,000 to $90,000 range (not shown), Baker only had three projects.

    3. In this range, clients spent an average of 6.2% of their costs (or $4,682) on electrical materials/fixtures.
    Baker tells clients, “In a kitchen like this, for this money, you can expect to get eight recessed lights, three pendants, and [enough] undercabinet lights.”

    4. This area describes to clients what they might expect to happen at each cost range.
    Armed with the chart’s information, clients can make better-informed decisions and easily determine where to spend more money or to cut back.

When Darius Baker, owner of D&J Kitchens & Baths, in Sacramento, Calif., created a system he calls “reverse budgeting,” he also came up with a form that he could show to clients to help them better understand cost, budgeting, and value engineering.

He took 50 kitchen-only projects over a six-year period and calculated an average job cost within particular price ranges between $40,000 and $100,000-plus. (Not every category is shown below.) Most of the company’s kitchen remodels were between $50,000 and $80,000. The more jobs compared, the more accurate the numbers.

During the six-year time frame, D&J Kitchens & Baths had six people in the field, one of whom was a manager, and their efficiency was consistent over all jobs, says Baker, who does job costing for each project.

Form boxes show each area of the job, its average cost, and the percentage of the total job cost. Baker is careful to show clients that labor costs include all carpentry, electrical, and plumbing, none of which is subcontracted.

Using this form, “You can have a better discussion with clients about the types of things they can find in a budget range,” Baker says. “This gives you a starting point with clients, and they can make knowledge-based decisions.”

—Stacey Freed, senior editor, REMODELING.