The inability of contractors to cover overhead expenses is one of the key reasons why so many restoration companies fail and will continue to do so unless the overhead burden of the company is accurately reflected in their estimate’s markup.
In addition to the general operating overhead expenses, restoration contractors are expected to provide free repair estimates and consulting time to insurance adjusters, agents and property owners, especially if the contractor is on approved vendor programs. The expense for estimators to provide free estimates or consultation on a weekly basis is very costly. Based on two estimators averaging 10 hours per week, each at $86.00 per hour, based on a salary of $180,000 per year, it comes to $89,440. Estimators are usually required to pre-qualify jobs before signing contracts to be sure they will be profitable for the company. Estimators can see four to five jobs per day, and most do not become sales. Here are some circumstances that can affect the sales volume of restoration contracts: