CoatingsPro Magazine

NOV 2014

CoatingsPro offers an in-depth look at coatings based on case studies, successful business operation, new products, industry news, and the safe and profitable use of coatings and equipment.

Issue link: http://coatingspromag.epubxp.com/i/409477

Contents of this Issue

Navigation

Page 23 of 92

COATINGSPRO NOVEMBER 2014 23 The Cost of One Failure W hat if you have to replace all those coatings — clean up and recoat everything — instead of just a 10 percent rework? If the project cost $7,000 to complete the frst time, wouldn't it cost at least that much to replace? You will get paid $10,000, spend at least $14,000 ($7,000 x2), and end up $4,000 in the red. How much proftable work do you think you need to make up for that one failure? If you believe that just one job that makes $4,000 will do it, think again! Go back to your cost structure: $10,000 in work to make $1,000 in net proft. You would have to sell, install, invoice, and collect another $40,000 in new work to get $4,000 in profts to make up for a $4,000 loss. Read that last sentence again. With added inspections, failed coating removal, etc., I have seen rework costs skyrocket far beyond the contract amount. And for every $1,000 in added cost, you have to fnd $10,000 in new work just to stay even. Are most coating failures the result of poor surface prep? And are contractors typically held responsible for that type of failure? Yes and yes. A small contractor (aka less than $1M/ year in revenue) will spend a year or more working to make up for a coatings failure. And the percentages don't change for larger contractors — if you are doing 10 percent rework on millions in revenue, it will take millions more to make up for those lost profts. Rework and Retainage You might be saying: " Travis, who cares about that fnancial mumbo-jumbo? Tell me why it feels like I never have enough money!" It might be the deadly combination of rework and retainage. Let's examine what 10 percent rework does to your cash balance. Retainage is some amount — usually 10 percent of your invoice — that owners or general contractors will hold (or retain) from each invoice on larger projects until the work is substantially complete. Tis is mainly to ensure you complete the project on their terms, and it has been a staple of construction contract law for over a hundred years. If your projects are holding retainage, that means you only receive 90 percent of the revenue until they are satisfed. Go back to our cost structure — 70 Money Matters Wr i te in Re ad e r In q u ir y #1 when the going gets tough... we get tougher. Foot traffc, vehicle traffc, heat, cold, the relentless effects of weather... With these kinds of forces stacked against you, it's essential to have a coating that can rise to the challenge - one that you can have confdence in to remain strong and effective no matter how hard you use or abuse it. Wearcoat ® foor coatings defne durability. Easy to apply, easy to clean, non-slip and incredibly tough, Wearcoat ® will give you the edge you need to get the job done - safely and effciently. Call us today or check us out on the web. Our expert staff is ready to help with any coating needs you have... COATINGS FOR INDUSTRY, INC. Call us today – 215-723-0919 Fax 215-723-0911 www.coatingsforindustry.com COAT SG SERIES ANTI-SLIP COATINGS Serving the concrete fooring, structural steel, transportation and aerospace industries for over 35 years.

Articles in this issue

Links on this page

Archives of this issue

view archives of CoatingsPro Magazine - NOV 2014