Several weeks before Hurricane Sandy hit, contractor Laurence Carolan began purchasing tarps, plywood and sump pumps. The extra materials enabled him to assist existing clients as well as new customers in the wake of the storm, but the work challenged his company and threatened its short-term profitability.
How can contractors plan for jobs following a major weather event or emergency situation and ensure they produce enough revenue to justify the time and expense?
Supervise supply levels
Many contractors prefer to order extra quantities when buying supplies so they can avoid trips away from the jobsite. Materials such as Sheetrock and insulation typically offer the best value because these items run the greatest risk of being damaged, especially during an extreme storm.
“Often it’s difficult to be on the mark with the materials you’re purchasing,” says Carolan, president and founder of House of Laurence, a contracting and remodeling company in Merrick, New York. “When I needed 100 panels, I would buy 150 because I knew that I was moving on, and that allowed me to keep my jobs running [in Sandy's aftermath].”
Other commodities like roofing and framing lumber usually provide a sizable return on investment, too, when managed properly. These common materials tend to sell quickly following a significant storm and can be used on concurrent jobs unassociated with the emergency work.
“Any time you have an event of a certain magnitude, basic materials become somewhat rare,” says Doug Cornwell, chief operating officer at Alure Home Improvements in Plainview, New York. “And those are the items required to help close up a house to protect it from the elements and unwanted access.”
Consider emergency reserves
A stockpile of framing lumber and roofing material ensures a company can repair most damage, but the ability to board up a house on short notice often determines whether a contractor even receives the job. Emergency supplies such as plywood, rope and tarps become essential in reaching new customers and securing contracted work after the initial storm cleanup.
“We go out and buy a lot of rope, a lot of tarps, and we stock up because we know there’s going to be a run on the material suppliers,” says Stephen C. Gidley, president of Stephen C. Gidley Inc. in Darien, Connecticut. “We plan in advance and invest in advance so we have those things ready to go.”
Performing remediation services after a storm allows contractors to display their craft and professionalism to unfamiliar homeowners and neighbors. This widespread exposure not only fosters a relationship with new clients but also can lead to more work — and larger jobs — for the company down the road.
“After Sandy, we installed quite a few roof tarps to help protect the houses from any further damage,” Cornwell says. “Just about all of those instances became actual jobs that included not only the roof but some other work as well.”
Carolan estimates he generated a half-dozen referrals from the people he aided following Sandy. As a result, House of Laurence has one major storm-related remodel left to complete. “Once the emergency was over, we had developed relationships, as we would with any normal client, with the potential to — at some point — take care of their bathrooms and their kitchens,” Carolan says.
Know the framework
Before contractors attempt storm-related work, they must understand the inherent complexity of jobs generated by a weather emergency. Insurance policies dictate the scope and cost of any storm renovation, which puts the contractor in a tough position when deciding the extent of a job.
“People expect more than what the insurance company is going to pay for, and even the seasoned remodeling contractor will have a difficult time with this,” says Carolan, who recommends sitting down with clients at the beginning of the process and discussing the parameters before moving forward. “Keep your eyes open and make sure everybody is on the same page.”
Alure Home Improvements discovered the obstacles extend far beyond any labor or construction. “One lesson we learned in Sandy is that people in these situations look to get help first and figure out the finances later, so be aware that you might have to wait for insurance money or government money,” Cornwell says. “When we realized the amount of reconstruction effort it would take, we focused on our existing customer base first and then on those people we knew we could effectively help.”
Once contractors comprehend the system, storm-related work can become a viable business model for their company. “You can be profitable, but you’re really going to have to cross your t’s and dot your i’s,” says Carolan, who adds he would pursue the demolition, remediation and preparatory work again following a storm, but would shy away from jobs once they reached the next phase, because of the cumulative stress.
“That’s something I would take on again; but the second part of it, I would not do as quickly in the future,” he says.
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