GETTING STARTED IN RECONSTRUCTION
By Jack Gaston
A nyone remember the pompadour hairstyle for men? Well, it’s back! Urban sprawl? Suburbia? Goodbye! People are moving back to the city centers in droves. Life is full of changes and runs in cycles. The insurance industry is no different. In the past, they wanted a one-stop shop that could do both mitigation and reconstruction. Then, they decided it might be a conflict of interests and wanted each done by a separate contractor. Now, it appears that they are trending back toward the one-stop shop again. What Does This Mean for Rainbow International®? For those of you not currently doing reconstruction, it means change. For those who know nothing about construction and have never been involved in it before, it means starting on the ground floor and educating yourself. It will mean gaining an understanding of structural members and processes, permitting and inspections, construction management, punch lists and walkthroughs. For others, it means dusting off your contractor’s hat and climbing back in the ring where you thought you had left 30 percent margins behind for the greener pastures of the 70 percent margins of water mitigation. “Welcome to a new life – one of job costing, buying out sub-contractors, purchase orders and work orders.” Welcome to a new life – one of job costing, buying out sub- contractors, purchase orders and work orders. Fortunately, most reconstruction jobs are relatively small. Often, it’s patching some drywall, replacing some baseboard and painting. If you built your mitigation estimate correctly,
the lineal and square footages of these items will be in the demo section. It’s a simple process to create the build back estimate from these. If there will be subcontractors involved, get them to walk you through their estimate and compare theirs with yours, having them to explain the discrepancies. If you are inexperienced in reconstruction estimating practices, have an independent estimator, such as Wright Loss, do an estimate for you. They have years of experience in the industry and often will pay for themselves by finding items you may have been omitting. Larger reconstruction projects with more moving parts will be more involved and will require sharper management skills. Job costing (in FUSION) and WIP (work in progress) meetings become critical to showing a profit. If, as an owner, you are not skilled in project management, an experienced project manager can aid in making the project more profitable and run more smoothly. Performance bonuses based on hitting specific margins will motivate the Project Manager (PM) to run as efficiently as possible. Knowing that the bonus money won’t be dispersed until the full amount has been collected makes the PM a good choice to be responsible for collection. Collection only gets harder the further away you move from completion, especially if the homeowner has been given the check by the insurance company. One way to cut down on the delay is to turn in your invoice several days before your final walk-through with the homeowner, upon completion of the punch list, with the expectation that the check will be given to you or your representative at the end of the walk- through. This will cure a lot of ills. Construction of any sort is challenging. Reconstruction has the added dynamic of being the result of unexpected damage to the home. The more skilled and efficient you can become will aid in navigating the troubled waters of the homeowner and make you more profitable. Get with your Franchise Consultant (FC) for guidance. Educate yourself. Change is difficult. Those of us who can adapt will be better off.
26 STORMSURGE TM | E1:2017
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