A Model of Excellence
Minimum Bottom Line Profit Should Average 9.4%!
For Trades & Subcontractors, at Least 11%
After Income Taxes Are Paid!
During my 27 years of doing accounting work, I’ve had the privilege of providing temporary controller duties for a new home contractor. He built custom homes in an upper middle class area. The homes ranged between $450,000 to $900,000 depending on the square footage, style, and amenities. I learned a lot about home construction from him. I’m going to call him Jim in this article. Jim started out as a framer and then built a small home on the side for another contractor; in effect, he ran the project. He ultimately acquired his contractor’s license and got a contract to build a nicer home. Well, Jim was able to get through the framing aspect without much of an issue. But as the project proceeded, he made his errors and when it was all said and done, he lost money. He learned some valuable lessons and wanted to get better. As he built more homes, his efficiency and ability to deliver a great product got him plenty of customers.
He calls me in to help because this was the mid 2000’s prior to the real estate market crash. He was building nine homes a year and didn’t have any money to show for his work. Jim was at a loss.