Budgeting 101 for Restoration Projects
A Step-by-Step Guide for Restoration Contractors
Budgeting isn’t just about setting a limit—it’s about understanding what a job is really going to cost, when those costs will hit, and how to make sure the job stays profitable at every stage. For restoration contractors, where jobs often involve insurance approvals, fluctuating scopes, and fast-moving fieldwork, building a reliable budget is critical.
Here’s a step-by-step guide to building restoration job budgets that actually help you manage cash, production, and profitability.
Step 1: Start with a Clear Scope of Work
Before you can build a budget, you need to know exactly what work the project involves.
Use your estimate or Xactimate/Xactanalysis scope
Break it down into phases (mitigation, rebuild, cleaning, contents, etc.)
Make sure scope changes and supplements are documented as they happen
Why it matters: If the scope isn’t clear, your budget will be based on assumptions—leading to overruns, delays, or billing problems later.
Step 2: Estimate Labor by Task and Phase
Restoration labor costs vary by type of work (mitigation vs. rebuild), crew composition, and timeline. Budget both internal crew time and subcontractor labor.
List all tasks and the labor hours expected for each
Apply a burdened labor rate (wages + taxes + insurance + benefits)
For subs, list quoted rates and timing
Tip: Don’t forget travel time, setup, and downtime—these add up quickly.
Step 3: Itemize Materials and Equipment
Next, identify all materials, equipment, and rentals needed by phase.
Include consumables (plastic, tape, PPE), larger items (drying equipment), and specialty rentals (scaffolding, dumpsters)
Use vendor pricing or past jobs for reference
Tag items that are billable vs. non-billable (to control margins)
Pro Tip: Restoration companies often bleed profit here due to lack of material tracking.
Step 4: Include Overhead Allocations
Even if they aren’t directly tied to a job, your overhead expenses—like office staff, vehicle costs, software, and rent—need to be accounted for in your pricing model.
Decide how you allocate overhead (by job revenue, labor hours, or flat rate)
Add this to your job budget so you can calculate true profit
Don’t confuse gross profit with net profit—overhead is the difference
Step 5: Map the Budget to a Timeline
Time equals money. Delays cost more than just frustration—they create budget risk.
Align your spending plan to the production schedule
Plan when cash outflows (materials, labor) will occur
Anticipate when you’ll be able to invoice—and get paid
Cash flow budgeting is just as important as cost budgeting.
Step 6: Track Actuals vs. Budget in Real Time
The best budgets aren’t set-and-forget. They’re tools to manage jobs as they unfold.
Compare budgeted vs. actual costs regularly (weekly is ideal)
Track labor hours and subs in real time
Flag overruns early so you can course-correct
Software tools like job costing modules in QuickBooks Online or restoration-specific apps can help automate this.
Step 7: Close the Loop After the Job Ends
Once the job is complete, review what went right—and what didn’t.
Calculate the final gross profit and net profit
Identify scope changes, cost overruns, or efficiency wins
Use this to improve your estimating and budgeting for future jobs
Every completed job should teach you something that improves the next one.
Want Help Building Better Budgets?
Kiwi Cash Flow helps restoration contractors budget, forecast, and track profitability across every project. We give you reports that make budgeting simple—and show you which parts of the business are driving results.
👉 Need better numbers for your next job? Schedule a call with us today.