b'Controlling ExpensesALetter to Improve the Bottom LinetotheHRCII by RobertHansen, MRCA DirectorPresident R The Braxton Report verified what many ofThissamerelationshipexistswhen us thought - that the net profit for roofingconsideringlossesthatarefrequentlyThe following letterwritten to MRCA contractors is low. A parochial view wouldexperienced during roofing projects (waterwas argue that sales are slow, and this accountsdamages due to leaks, asphalt spills, etc.).PresidentHarlanHansonbyHarryJ. for the low netIfIfitanWendlandtofHarryE.Wendlandt profits.only sales wouldyou have a $300 loss,would requireCompany, Inc.in response to Hanson\'s up, everything wouldofJanuaryMidwestRooferarticleabout pickwork out.additional $6,000sales to offset the loss. One obvious solution wouldto beThe table below can be used to determineMRCA\'s standard two-year guarantee. seemto hire another salesperson.Ifadditional sales needed to offset losses, or the salary isDear Mr. Hanson: $30,000, that amount plus the associatedthe equivalent sales from a reduction in additionaloverheadwouldhavetobeexpenses.WeareanMRCAmemberroofmg recovered before any improvement wouldcontractor, and I am writing to say that I be seenthe bottom line.Consider the following actual case.An onenjoyed your recent article on standard atwo-year guarantees. WeMRCA out-of-townnewspaperwas selling ads at OncostofONLY$500. "Youonlyhavetosellsalutein the other hand, reducing expenses putsits work to maintain two year contractor money directly to the bottom line.Forone roof(at $500) tofor the ad, and jobpayresponsibility and guarantee. example, ifis 5a reductionif you sell any more, it would be more your net profit%, of$400 would be equivalentprofit." AtNet Profit, you can expenses by5 %see thatIn spite of being proponents of two year to increasing sales by $8,000.Considerthere would only$25 profit. You would becontractorguarantees,westillseea beproblem with regard tobuilding owner. how much easier it wouldto cut $400 inhavetosell20jobstorecoverthecostofthe expenses as opposed to increasing salesad.This would be $10,000 in additionalthe $8,000.sales.To use the table, go down the 5The scenario is quite common, whereby a %contractor returns duringfirst two years column to the $500 row and read $10,000.the and in a remedial way corrects problems at his expense.The two-year period arrives and passes, followed by more incidental Remember that controlling expensesproblems.Nowthebuildingowner is essentially on his own (with exception of can improve your bottom line.aninstancewhereamanufacturer\'s warrantyapplies).In short, we feela ~n:PROFITroofing contractor can install a roof, in a YOUR NETJS a~4\'is-~less than quality fashion, and virtually be "off the hook" at the end of the two year YOUWit ~ Tm$AMOtlNTperiod. The building owner is left with the tlffl WUtOF UlllflONAL~lt$O.FFSE1theadache.One of our foremen recently SA f()LOSS commentedme: "Itwe work toseemswith 110,$11333a different set of standards than much of \'000_ :: ..our.competition." aou.;\':.,_\'.,We . feel a contractor should not guarantee .A.OO, loo16,166his workmanship for more than two years, but thathe shouldmaintain reasonable accountabilityfortheyearsafterthe guaranteeexpires.Ourcompanyhas practicedthisformanydecades.If a New Publication by AMCAproblemsurfacesduringthenormal expected lifethe roof (i.e., 20years), and of it is a causedesignworkmanship that ofor AMCA (Airhas developed, through its Air Movement and Control Association)Movementwasoriginallyunder the control of our EngineeringStandards Committee,a newpublication for the users and installers ofcrew,wefeelweshouldremain IndustrialCommercial Fans. Items covered by AMCA Publication No. 410 are: Safety, &accountable.Regardless of whether it\'s Startup Check List, Maintenance, and Trouble Shooting.The 19-page publication isthe third year or the eighteenth year, we available at .50 each from:feel it\'s ourto go back and responsibility makeitright.Wehavealifetime Air Movement and Control Association, Inc.accountability plan that offers this value to 30 West University Drivebuilding owners.Itan extension of is not Arlington Heights, IL 60004warranty or guarantee, however.What it 708-394-0150is, is a strong maintenance program and a trusting relationship which means that we will come backmake it right. to Page4'