The Associated Press Wants Your Feedback On Gas

Nathan

I was contacted today by the Associated Press and they are looking for some input on how you guys are dealing with high gas prices.

I edited out the contact info but here is the request
So, if you have any input post it below. Also post your name if you want to be quoted.

I'm not sure if it will be used or not but it might be fun either way.

Thanks

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Nathan

"He is no fool who gives what he cannot keep to gain that which he cannot lose." - Jim Elliot

Ed the Roofer

As a Roofing Contractor and Service Business, I find that changing the way we do business would be a disservice to the performance level that our clients have come to expect from Right Way Roofing Company.

We are based out of the NW Suburbs of Chicago, around Carpentersville, Dundee and Elgin Illinois. There is a significant populace located in our designated market area and we continue to operate the same as before.

I use the most convenient locations for filling up with gasoline as the most critical criteria rather that the price per gallon at various gas stations. If I were to either limit my driving around doing estimates or narrow the market area radius that I would be willing to drive to, then the customer service and expectations would not be met by many of the potential clientelle we are trying to accomodate.

Yes, it seems outrageous, while throwing $50.00 into the gas tank, that the needle on the gas guage barely moves, but this is just a small part of the cost of doing business and can not be cut back and obviously can not be sacrificiouslly eliminated.

Although the gas prices do affect the job costing and contract amounts, it is no where nearly as insane the magnitude of price increases that have been pushed across the board with asphalt roofing related products and accessories. But, even those price increases have been bearable, although disdained. It has just meant that we must provide more value to the customer to entitle our company to receive the benefit of the trust from the consumers.

It seems as if the continual haranging about the topics by the media, related to all of the various price increases have thrown many consumers into a purchasing comatose state. It is times like these that a dedicated professional needs to step up to the plate and provide more detail and service than ever before, to have a chance at surviving this hopeful temporary economic downswing. Otherwise, only the Contractors who cheat the systems will be able to take advantage of this less available funding for home improvement projects.

Ed

Right Way Roofing Company
Carpentersville, IL 60110

Note:
Full name and phone number for contact information are available by e-mail to: eddiesdad@sbcglobal.net

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joasis

I now look at each job and estimate the actual miles X trips to complete the job, and work at $1 a mile, round trip....then add this figure to the total price of the project. Since I use large equipment, I have to add for moving to and from job sites, which we never did in the past.

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Mike Finley

Scaling back? I'm not sure what that would mean, you can't scale back anything that effects the outcome of projects for your customers, the materials, the man hours or the customer service is not scaleable based on cost cutting without effecting the final product delivered, that's just not an option.

Charging more in these economic times isn't really an option for the majority of us either. The devestation to the new home industry has flooded the remodeling market place, creating a unsustainable downward price pressure and an increase in consumer complaints of shoddy contractors and fly-by-nights caused by the cross over of new construction tradesman into remodeling.

More and more contractors seem to be discussing and exploring the implementation of charging for their estimates to lessen the sting of fuel prices. Many suppliers are now tacking on "fuel" surcharges to many materials. I don't think many contractors are finding passing on these charges very easy. As a result I'd guess there are a lot of smaller profit margins in the industry as a result of all this.

Tom R

Bein's you're the AP, - - just go ahead and make up some liberal slant like you know you're going to anyway . . .

Cdat

I make enough of a profit it hasn't affected me at all. I earn less but I earn too much anyway.

Mike Finley

That's the spirit!

BKFranks

With the remodeling business in a downturn, consumers face fewer backlogs, lower bids.
Orange County Register, California

http://www.ocregister.com/articles/r...5-percent-work





Remodeling contractor Eddie Kesky had a backlog of customers three years ago, many of them paying to have their tract homes torn down and new McMansions erected in their place.

Today, however, "tear downs" are few and far between. Instead, the Los Alamitos builder keeps busy remodeling kitchens and bathrooms, adding rooms, giving homes a facelift. He's one of the lucky ones.

"From what I understand, talking to some of the other guys, some people are dead. Some people are still plugging away," Kesky said of his fellow contractors in the remodeling business. "Very few are busy."

A new report out this month predicts that things are going to slow down even more for U.S. remodeling contractors.

Harvard's Joint Center for Housing Studies forecasts that the level of home remodeling activity nationwide will continue dropping into the winter of 2009.

After peaking at $147.4 billion in the second quarter of 2007, homeowner improvements are projected to drop to $122 billion by the first quarter of 2009, a 17 percent decline.

The rate of decline will accelerate as well, the center forecast, with remodeling down 11 percent next winter over last.

"The slumping economy and struggling housing sector continues to drag down spending on home improvements," said Nicholas P. Retsinas, the joint housing studies center's director. "Households are reluctant to undertake major improvements in the context of falling prices."

In Orange County, the decline in home remodeling is even more severe.
After hitting a peak of $580 million in 2005, remodeling work here likely will total $355 million this year, a drop of $225 million, or 39 percent, according to the Construction Industry Research Board.

The tripling of Orange County real estate prices during the boom made it easy for homeowners to borrow against their increased home values and remodel old tract homes into custom palaces. They often equipped renovated homes with high-end electronics, spa-quality bathrooms, state-of-the-art kitchens and outdoor entertainment areas.

But after 33 months of falling home sales, a credit crunch and a 23-percent drop in home prices, owners aren't spending so freely anymore. Plus, it's no longer easy to get loans as home values tumble.

Anaheim-based Ganahl Lumber, which derives a large portion of its income from remodeling contractors, saw its sales numbers fall 7 percent in 2007, said President and CEO Peter Ganahl. This year so far, sales are off 15 percent from last year, he said.

In 2005 and 2006, remodeling contractors would be lined up outside the chain's stores at opening time.

"It was a madhouse," he said. "Now, it's not such a madhouse."

While a slowdown is bad for business, it can be great for customers. No longer are they paying top dollar to employ busy contractors and their overworked crews. And with less work, there are no backlogs, so they can start work when they're ready and are less likely to face delays.

Kesky, the Los Alamitos contractor, and Fullerton contractor David Neilson confirmed that competition among contractors for scarcer jobs has worked to the customers' benefit. Both have dropped their prices at times to ensure they got a job.

"We're working harder for less money," Kesky said. "I tightened up my percentages. But my costs haven't gone down. … We're working for less profit."

Kesky said he's had two clients cancel jobs because their financing fell through.

Meanwhile, Neilson said he's having an easier time finding subcontractors.
"The subs have told me that the other general contractors they work for have become more slow or (have) no work," Neilson said. "They're very appreciative and cooperative and willing to lower their prices here and there for the work that we're giving them."

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Ed the Roofer

First point I want to make, is that the request was for your own experiences and how has the gasoline pricing affected the way you operate your contracting business.

I do not think that a copy/paste of an article, even though it was very informative, is what was being sought for this thread.

Next:

How incredibly assinine can not only those subs be but the GC, named Neilson, be as well.

If the subs are already workng for bare bones profit, unless they are fraudulent or cheating or illegal immigrant subs, then their is no financial or economic rationale to require them to work for less than before.

Provide the proper value to the job so that it provides a proper ROI for the consumer and the "Slightly" higher prices will still be merited.

It is the mental suggestion that induces so many that "The Sky Is Falling", so we "MUST LOWER OUR PRICES." No way!!! By doing so, when surviving on a minimal Net Profit to begin with, is akin to slicing your own business throat. How long must any contractor prolong the bleeding before they either must give up or change their ways?

Ed

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TimNJ

I bought another truck that gets 50% better mileage and I use it for doing estimates and running around. The gas hog truck only comes out to job site.