Home performance is growing and I think it is a good idea for contractors to take a look at this aspect of construction industry and adjust their own business to take advantage of new opportunities that are rising to the top. There are a lot of both government and private dollars being invested in energy savings and there aren’t enough contractors or people to get the work done that is needed.
But we’ve noticed the same problem with home performance contractors that we’ve seen with other specialties. They believe that because their work is focused on the concept of making a house or home a thermos bottle, their business operates differently. Somehow, the business rules that apply to remodeling contractors or new home builders or electricians or sheetrockers don’t apply to home performance contractors.
Guess what? That’s not true. Regardless of your specialty, the business rules are still the same. You have to charge enough for your work to cover your job costs, pay your overhead, and make a reasonable profit, or you’ll go out of business. Every specialty contractor performs a different trade, and there are many points of differentiation on the building or installation side of their business. But the financial issues are the same.
Now, if you get involved with government agencies or nonprofits, you’ll need to watch your overhead carefully because the paperwork required will definitely push your overhead up. Your profit expectations should be about the same as any other specialty contractor.
Our book, Markup and Profit, A Contractor’s Guide Revisited more clearly defines what does and doesn’t matter between general and specialty contractors. Check it out – we want to see you succeed.