Beyond the Bid: The Hidden Costs of Permit Fees, Travel, and Dump Fees You Must Price In
For restoration business owners specializing in water, fire, mold mitigation, contents, or complex rebuild/reconstruction, the ultimate goal is turning expertise into profit. However, time and again, we see that hard-earned revenue vanishes due to costs that were never accounted for in the initial bid.
These “hidden costs” are prime examples of Direct Job Cost Leaks. If they are not included in the job’s initial price, they are absorbed by your business, eating directly into your gross profit margins.
At Kiwi Cash Flow, we help owners like you gain control over your finances by transforming your numbers into a clear roadmap for profitability and growth. Gaining this control means ensuring every dollar counts, starting with accurate job costing.
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Identifying the Hidden Costs That Sink Restoration Profits
Many estimators focus heavily on core materials and labor, forgetting the numerous smaller, mandatory costs that accrue on every project. When these costs are not priced in, the estimate is effectively inaccurate, and the job is underbid.
Here are the most common costs that become profit leaks because they are overlooked or absorbed by the company:
1. Permit and Regulatory Fees
In reconstruction and rebuild projects, various city and county permits are often required before work can legally proceed. Permit fees are frequently not priced in during the estimation phase. If this cost is covered by the business's overhead instead of being applied to the specific job, it constitutes a direct profit leak.
2. Dump Fees and Waste Disposal
Restoration inherently involves significant waste, debris removal, and disposal. Dump fees are another example of a necessary expense that is often forgotten and not priced in. This is a crucial Direct Job Cost that must be accounted for to maintain margins.
3. Travel and Site Transportation Costs
While labor includes wages, the costs associated with getting technicians and materials to the site are variable expenses that need attention. Travel expenses are commonly missed in estimates. This applies not just to fuel, but also to ensuring that service vehicles used for jobsites are included with the variable costs for accurate costing.
Broader Direct Job Cost Leaks
Beyond the small fees, robust job profitability requires control over all Cost of Goods Sold (COGS). Failure to control these areas will also cause margins to shrink:
• Materials and Markup: Margins can shrink quickly if there is no markup on materials or subcontractors.
• Equipment Cost Recovery: If equipment use is not billed or recovered, the business absorbs these costs, resulting in a missed rental revenue opportunity or absorbed expense.
• Subcontractor Control: Subcontractor overbilling or poor scope control is an unchecked cost that results in a significant leak.
From Hidden Costs to Financial Confidence
If you are basing your pricing on outdated pricing models, you are likely not reflecting labor and material cost inflation, compounding the problem of missed hidden fees.
Restoration owners need clear financial visibility to prevent repeating profitability mistakes. Our CFO subscription services deliver detailed financial analysis and provide industry-specific financial reports and KPIs (Key Performance Indicators) in a clear, easy-to-understand format.
We help you track key metrics like individual job profitability and ensure your job costing is accurate. By transforming your financial data into actionable insights, we help you refine your estimating process and achieve the stability and growth you deserve.
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Ready to Stop Guessing and Start Pricing for Profit?
If you are tired of being overwhelmed by financial confusion and want a strategic partner to help you gain control over your pricing and cash flow, Kiwi Cash Flow is here to help. We provide the precise forecasting and clear financial roadmap needed to unlock success.
Let’s discuss how our expert guidance can simplify your financials and put your business on a path toward maximizing profitability.
Schedule your free "right fit" call today: calendly.com/kiwicashflow