INSULATION: THREE PRODUCTS, THREE COST WORLDS
Batt is piece-rate hand labor; blown is machine production by the bag; spray foam is a chemical process with rig costs, yield variance, and certified applicators. One blended cost history misprices all three.
This page covers one problem. The full picture for this trade, including the other places margin leaks, is on the insulation operating system page.
WHERE THE MONEY GOES.
Covered in full in the quick answer above. The sourced numbers and what controls it are below.
THE NUMBER TO MEASURE IT AGAINST.
Insulation contractors run about % net profit at $1M to $5M, rising to roughly 10% at $5M to $10M. The CFOS target at $1M to $5M is10%, set at 10 percent before taxes or 3.5 points better than your trade's average at your revenue, whichever is higher. A problem like this one lives in the distance between those two figures rather than in a loss on any single job.
Gross margin over the same bands runs % to 23%, against a CFOS target of 10%.
THE SYSTEM THAT FIXES THIS.
Cost codes built against the estimate, so a job can be read while it runs.
