Once you have an approved scope and a contract with your client, it’s time to create a project budget. I am always surprised by how many contractors utilized tools such as Xactimate and don’t use all of its capacities. You can go deep into the weeds with any software, but the purpose of this article is to take a quick run through a restoration repairs budget using Xactimate. 

Your restoration repairs budget will only be as good as your Xactimate estimate

Once you have written your detailed estimate, supplemented with thorough documentation following the principles we talk about in Be Intentional: Estimating, it’s time to put the plan to work. When you sketch accurately, you enable yourself to efficiently create and extract relevant project information including quantities of materials, estimated labor, and even the project duration. 

Restoration repairs budget materials lists from Xactimate

• Select “reports” in the top right of your estimate
• In “print options” select “components” from the “report” tab

Depending on how detailed you want to be with your budget, this report gives you a deep dive into the materials assumed with the estimate line items. You have a count of framing nails and/or drywall screws at your fingertips. For most projects, I will highlight the larger quantity line items and extract my main data from these. For example, I am looking at an estimate that has a nearly $500 line item on a page where only a few others break $100. This item happens to be a 3 linear foot (LF) vanity, which is an item we will want to note in our materials budget. 

If you are separating materials and labor for tracking, or in the event that you are subcontracting portions of your work, you will have to decide how in depth you want to break these items out. 

The components list is also helpful for checking your quantities for materials such as flooring, insulation, and drywall. On this page I have 83.25 square feet (SF) of snaplock laminate. If your flooring is 30 SF per box, you can determine how many boxes you need to order. If you estimated to replace the transition strip in multiple rooms, you will also know how many linear feet of material you will need. Before you take the unit price and give that to your client as their materials budget, go back into your components within the estimate and understand the breakdown of labor, burden, materials, etc. Seth Harrision of Actionable Insights has many helpful videos, including this one covering an Xact Hack for creating a materials budget.  

To observe the cost factors:

• Go back into the “Estimate Item” menu
• Click on the FCW LAM line item in a room 
• Click the “unit price” and select the “i” next to the price

Restoration repairs labor budget from Xactimate 
While still in the components print out, you can scroll down to observe the labor quantities by work category, Xactimate unit price, and labor factor totals. Using these figures you can cross reference the labor for each of the scope categories. For finish carpentry (FNC), which is for “Carpenter - Finish, Trim/Cabinet”, we have 7.30 hours based upon the assumptions of the software for this estimate. 

Restoration repairs project budget from Xactimate 

• Select “reports” in the top right of your estimate
• In “print options” select “final draft” from the “report” tab
• Before you print, select “recap by category”

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Recap by Category assembles all of the line items from each room and combines them into core groups. Each of these line totals include materials and labor. If you are creating a budget, this is likely the report that you will want to start with. If your company is built so that you work for less than 20% overhead and profit, then this sheet may be all that you need. Otherwise, you will need to use these numbers to compose your plan. 

A simple format for budgeting includes taking the line item totals provided in recap by category, subtracting your profitability goals, budget for project management time, and build in a buffer. You can do this on scratch paper, a simple spreadsheet, utilize budgeting software, or use a program that integrates with your estimating tool of choice. 

Restoration repairs project scope from Xactimate

Another good resource from Xactimate is the scope report. This will provide you with a resource that you can print out and post in each room of your project so that everyone on your team is on the same page with regards to what the approved scope is. Too often only the estimator knows what the scope is and that information is not downloaded to the production team. By training your team to read and understand your estimating document you have a better chance of continuity in your workflow and combating the costly effects of scope creep. 

I share a story in my latest book about being hired to elevate training for an established office and then being berated for doing what I thought I was hired for; training. The experience of working in an environment with a supervisor that didn’t do much to help their team members with career development was a challenge but I want everyone reading to understand that it can be done. Career development in property restoration, as in most of the skilled trades, will require you to develop the right mindset and habits in customer service. We will address two key components of customer service in this article, communication and cleanliness. 
 

• If you want to develop your career, you have to be intentional in your personal development. 
• If you want to attract, develop, and retain good talent for your organization, you have to be intentional in your team’s professional development. 
• If you want to be an intentional restorer, you must make a constant commitment to develop your mindset and your habits. 

Property restoration career development: Create your own opportunities

It may surprise some of those reading to learn that prior to 2008 we had specialists for almost everything. When I started in the industry in 2002, with the team in bright yellow, we had separate divisions. There was some crossover assisting teams when they needed help, but our primary functions and teams were distinct from each other. We had managers for each of our divisions, mold, water, fire/contents, repairs, and carpets. 

When I arrived with the company listed in the opening paragraph, my role as production manager was expected to oversee all of the “divisions” similar to those listed above. As a side note, we offered trauma/crime scene cleanup but it was not a service we did a lot of. I saw bio-services as an opportunity to learn more about the process and market those services so that I could create a growth void that I could then fill. You may be starting over, like I was, or feel like you are stuck in career limbo, look for something that no one else wants to do and create your own opening. Whatever level you are at in your career, life is about opportunity, not convenience. 


Property restoration career development: Training for customer service

While I was not aware of the title at the time, I had to develop a process for teaching my team soft skills in addition to the technical (hard) skills of property restoration. If you are a manager and/or owner, when you train your team members to develop their mindset and habits, you communicate opportunities for growth which will also push you to continue to grow. This quote attributed to Richard Branson, is a strong encouragement to any organization that wants to thrive with their people, "Train people well enough so they can leave, treat them well enough so they don't want to." 

The chart below is the result of years of grinding out a process for addressing what I felt was important when training a diverse group of team members who had to master multiple service offerings. If you are committed to training, you have to budget time to focus on core principles and supplement scheduled training with on the job follow up by yourself and your team members. You don’t have accountability until you create clarity, develop consistency, and your team is committed to holding each other to the shared standards (culture). Accountability starts with the people in positions of leadership leading by example, without which it won’t exist.  

Customer service, or better said, the customer experience, is essential to long term success in a service based industry like property restoration. You cannot expect that customer service is common sense or that your existing team will pass down everything that you hold dear. 

Two key aspects of customer service that you have a direct impact on are:

1. Cleanliness, and
2. Communication 

Property restoration career development: Cleanliness is godliness 

Cleanliness is godliness in property restoration. What is the first thing you should do when you meet a client, regardless of the time of day? If you are entering a home, you should be asking, “Would you like me to take my shoes off,” or slipping on protective booties that your company supplies you boxes and boxes of. Why is this important? Because it demonstrates to the homeowner that you respect their home, you respect them, and your number one priority is their experience during this process. 

What is the alternative? You may walk in and the customer may be fine, but making this consideration known is key to setting yourself apart - even if no one else in your company does it. Obviously, if the whole house is flooded, you aren’t taking your shoes off and booties are useless. You can say, “Normally we would take our shoes off but it does not appear to be safe at this time.” One component of sales is ensuring you communicate how you and your company are different, not by putting your competitors down but by showing your client your unique values and habits.  

Additional habits that demonstrate a standard of cleanliness:

• Flooring protection and sticky matts - be aware of the impact to certain finishes
• Containment and dust barriers 
• Air scrubbers and environmental controls
• Sweep and/or vacuum as you go about your work as at the end of each day 

I can remember early on, I was on a project where I had forgotten my vacuum cleaner (or someone had borrowed it and not returned it), and the day was wrapping up. Somehow the only tool I had was a hand broom and dust pan. My boss had made it clear that sweeping at the end of every day was important to him and would pay off with the customer. So, I swept my way out on my hands and knees. This wasn’t a detailed sweep as we were coming back to complete more demolition the next day, but that action won a lot of favor with the customer. Unfortunately, not every customer will vocalize their satisfaction, but your habits are critical as they establish your way of doing things. 

Property restoration career development: Communication 

Communication is more than just talking. If you are the one presenting the information, your integrity is essential. Unfortunately, there are too many examples of people who will speak when without thinking about what they are saying or about things that they don’t fully understand. You are not doing yourself or your client a good service if you tell them something just to ease the tension or sound important. 

Whenever we would onboard new technicians, or in peak season when we would bring in temporary labor, I would give some variation of a speech about two great communication anathemas that weren’t to be practiced in our team culture: 

• The first rule of earnest communication for intentional restorers is, don’t speak about things you have no knowledge of. If a customer asks you a question and you don’t know the answer, tell them, “That is a great question, let me get my supervisor to ensure we get you the right information as this is a bit above my paygrade.” You can use a little humor to maintain the confidence of the customer and be a broker in the transmission of truth rather than slipping into slimy sales mode and saying something useless just to fill the void. A thoughtful pause will serve better than a quick tongue as you develop your career. 

 

• The second rule of earnest communication for intentional restorers is, NEVER utter the words, “I don’t know.” If one extreme is to say something just to say something, the other extreme is deepening the chasm of stupidity by saying those three confidence killing words. Not knowing an answer does not mean you are stupid or unqualified. The same line from above helps in this scenario as the goal is to maintain the confidence of the customer in the abilities of your team. If you want to grow your career, the first time a customer asks you a question that you don’t know the answer to ought to be the last time that you are unprepared to address that issue. 

Property restoration career development: Be intentional

What is a business? In order to have a sustainable property restoration business you will need two things: happy customers and profitable jobs. Too many organizations, and people in a position of leadership, focus on profits as though they are the cause and not the effect. This is not to diminish how important profits are, but to understand that it is much more effective to direct your team members to focus on what they can control. All team members play a role in achieving happy customers and this is where we should focus our training. If you teach your team how to produce happy customers, you will find ways as a team to achieve profitability. On the other hand, if you always preach profits first, you will struggle to achieve happy customers. One is a cause, the other is an effect. Al Erisman, author of The ServiceMaster Story, discussed how early leaders in this flagship restoration organization had the mindset that profits were the subject but not the object of their efforts. 

As you develop your career in property restoration, use these three guides: 

• Do it Right.
• Do it Efficiently.
• Do it excellently. 

Being an intentional restorer starts with doing it right. Whatever your roles and responsibilities are, learn how to do them right. Once you have this foundation you can learn to perform these functions more efficiently. This does not mean faster. Yet, efficiency increases overall team speed without cutting corners or sacrificing quality (doing it right). In everything we do, we want to add that sizzle which stamps your work with your way (reflects your culture). When you arrive with booties, lay down flooring protection, set dust control barriers, and close every day with sweeping the worksite, you are showing your customer that you have a way; that you have pride in what you do (excellence).

• If you want to develop your career in property restoration, customer service is key.
• If you want to develop your team into intentional restorers, consistently teach them the skills of communication and cleanliness as keys to the customer experience.   

South Sound Connection (SSC) LIVE - Episode 012 Part B

SSC LIVE is brought to you by The DYOJO Podcast and All American Restoration Services (Tacoma, WA).

Tuesday, February 2, 2021 9am PST - SSC LIVE ​

GUEST 2
Todd McKellips (Tiny Home Guy), Seattle Tiny Homes

On SSC LIVE 012 Part B we discussed:

• Zoning and building challenges for tiny homes as residences
• Obstacles to getting tiny home as solutions for homelessness through bureaucracy
• Use of tiny homes for veterans, emergency housing, and community solutions
• Following your passion, as Todd says, "Fight for something that will change the world."

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INTRO
Todd McKellips is a social entrepreneur, philanthropist, chaplain and family man. Todd is the state chapter leader for the American Tiny House Association a national effort with affordable housing as at his core mission. He is passionate about bringing home ownership to those who can only dream of it. Todd is the director for Washington Tiny House Association.

WEBSITE
SeattleTinyHomes.com

Join us next Tuesday at 9am PST for SSC LIVE 

Bill Wilson's acclaimed book, When Words Collide: Resolving Insurance Coverage and Claims Disputes, includes an entire chapter dedicated to best practices for this process. Bill is famous for his admonishment to "RTFP", which, in terms safe for work, stands for "Read The FULL Policy." The policy outlines what is covered and what is excluded and as our co-host, David Princeton of Advocate Claim Service, says, Mr. Wilson's book is, "A new bible [for policy interpretations]." As Bill notes, there are areas of ambiguity in every policy potentially leading to claims disputes and/or denials. While many who have had the misfortune of working through a disputed claim have a less than savory view of the process, Bill outlines

Four Basic Reasons Insurance Claims are Denied:

1. They're not covered (or there is no legal liability for the loss);
2. There is a legitimate difference of opinion on coverage;
3. One party is committing material misrepresentation or fraud; or
4. Cranial inversion (medically, cranitis rectal inversio).

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Many restoration contractors believe reason number four always applies to "the other side", but When Words Collide presents a balanced approach to resolving disputes. While policy ignorance is a significant contributing factor, Bill states, "Most coverage disputes likely arise from legitimate differences of opinion about the intent of policy language or the proper way to interpret it." During our discussion on The DYOJO Podcast he reiterated his encouragement for all parties to work together to form reasonable resolutions.


Speaking for the Structure as an Insurance Contractor

Bill shares an example from his own property damage claim, where he thought he was making a reasonable concession with regards to a proposed scope of work for his intricate front door assembly. As a restoration contractor I could hear my fellow professionals cringing at the suggestion that a homeowner would make a compromise to benefit their insurance company, Bill reminds the audience that the claim is ultimately between the insured and the carrier. David and Bill clarified that it is important for homeowners and adjusters to receive the professional input from qualified contractors as it relates to their area of expertise; the structure.

When Words Collide presents the process for resolving insurance coverage claims and disputes; Mr. Wilson emphasizes understanding the policy as the authority and encourages the commitment of all parties to finding a reasonable resolution. As Ken Larsen shared on episode 47, the contractors role is to speak for the structure and communicate the scope necessary for restoration. To the "surprise" of all the restoration professionals in the audience, Bill soon discovered that he would have been better off following the structural assessment of his contractor. David wisely admonishes contractors to learn to effectively communicate your "because" when outlining your recommendations to the insured and the carrier.

The Process for Resolving Insurance Claim Disputes

Understanding the policy and properly interpreting the policy, as it relates to unique claims situations, has been the career long passion of author Bill Wilson. In the book and our discussion, all professionals are reminded to "RTFP" which includes knowing what you are selling, being clear with your communications, and being reasonable with your interpretations. We were glad that he took the time to discuss this important topic with us and share his insights with our DYOJO Podcast audience to help them shorten their DANG learning curve.

You can watch or listen to the full conversation of The DYOJO Podcast Episode 48 on YouTube, Spotify, or Apple (thedyojo.com/listen)

John Doe has been working hard for “the man” for the last ten plus years and he realizes that he’s making a lot of money for someone but it sure isn’t him. Mr. Doe begins thinking about what it would look like if it was his name on his sweat soaked t-shirt. What if the customer were writing the checks to John Doe Construction? Even in a season of unrest, there are plenty of opportunities for growth minded professionals who are ready to take the leap into entrepreneurship. Reaching your dreams starts with developing the right mindset and habits to succeed.  

The motivation to go out on your own as a contractor

How does the blue collar nursery rhyme go, “Boss makes a dollar, I make a dime, that’s why I poop on company time.” The difference between the dream of owning your own business and making it a reality is putting action behind your thoughts. Some people do this the smart way and start to build a side hustle until they feel they have something strong enough to sustain them going out on their own. Others jump into the deep end with no safety net. The problem many new entrepreneurs face is that they don’t know what they don’t know about the business side of things. When you’re on your own, you have to provide your own toilet and buy your own toilet paper.

Creating a business as a contractor, not just buying your job 

At the startup stage, many contractors feel like “beggars can’t be choosers” and they take anything they can get even if they know the project is light on profitability. There is a process of moving from pennies to quarters as you scale up the quality of your clients. At the core of your business you must understand what Michael Gerber outlines in his popular book, The E-Myth, ““If your business depends on you, you don’t own a business—you have a job. And it’s the worst job in the world because you’re working for a lunatic!” You need to decide whether you are going to be a sole proprietor and charge a premium for your high quality work so that you can build a future for yourself. Or, you need to operate like a business and charge enough to build a team. 

Building a future for yourself and your business as a contractor 

The skilled trades person who takes the gamble on themselves to start their own business often has to learn business by trial and error. Where many of these errors start in construction is not properly charging for your services. You have to learn how to price yourself right for your market, in relationship to your hard costs (overhead) and with your vision in view (profit) so that you can achieve your dream, not just own your nightmare. The right mindset and habits for estimating are critical to your success, which are topics that Jon Isaacson, The Intentional Restorer, takes head on in his latest book Be Intentional: Estimating. 

Mastering the business and leadership tools that will enable you to thrive as a contractor

As you build your business, it is helpful to have standardized systems that help with checks and balances so that you are not just going with your gut on every decision. In construction the standard has been resources such as RS Means, which provides pricing guidelines for trades, services and regions. Another option, which is common in insurance claims, Xactimate provides tools for contractors to enable them to write consistent estimates while also producing production plans, budgets for materials as well as targets for labor and duration. 

The value of mindset and habits as a contractor building a business 

Whether you are a startup or have been operating for some time, if your business is struggling to be profitable, you may need to look no further than your estimates to start fixing your business problems. You may think this is an oversimplification but think about all the stress that a bad estimate places on your process, your production and your profits. A poorly written estimate leads to poorly structured production plans which leads to poor execution, unhappy customers, frustrated teams and sinking profits. 

To quote from Be Intentional: Estimating, “Strong estimating mindset and habits will help you to provide resources to invest in your process so that you can identify issues, resolve them, repeat and build upon your success.” Clear communication via developing strong internal processes for core aspects of your business such as estimating, will help business owners to be more efficient, reduce scope creep and produce quality revenue. 
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Start your process with the right mindset and habits as they will be hard to change down the road. Set yourself up for success by successfully setting yourself up to succeed. If the end product is causing dysfunction, track your way back to the start of the project and fix your structure by starting with your estimating process.   

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