What is the biggest increase in the cost of doing business this past year?

What is the biggest increase in the cost of doing business this past year?>>>

Advertising and marketing.........in bad times you have to spend 3X the normal amount to get the same amount of sales revenue in return. We're spending TONS of money on ads, etc. that we normally never have to do. Thankfully many of our competitors have folded their tents so that helps but with the medial screaming at people every day how bad things are it really stirs the pot. Most companies cut their advertising budgets first but that's the absolute worse thing you could do. You have to keep your company out there in the public's eye to survive the bad times.

JET>>>

When I look at costs, and try to settle out single line items, "Materials" is the largest cost on the income statement, but if you break those materials down to their individual types, they seam much less significant. And, while some of those materials increased in price, some are now coming down, and in most cases, the increases could be somewhat anticipated.

Fuel was the huge shocker for me. We are rural in location and travel about 120 mile radius to do the work we get done. For the first time ever, fuel exceeded health insurance. As a company that pays all but 20/week for family health insurance coverage (about 85% of total premium costs) - that's a significant expense. I was pretty much able to just wipe $60K off the bottom line in totally uncontrollable fuel increases vs. what was budgeted.>>>

I think the biggest change for everyone this year will be a major increase in marketing costs, by that I mean advertising.

The materials will be covered by each project as the contractor has very little control over the price of shingles, if the US market follows what is happening here I think the roofers will find their working season much shorter.

A lot of the customers who would have re-roofed their home as preventative maintenance will be trying to get another year out of what they have because many who thought their incomes were secure are concerned and until the concerns are set aside by improvements in the economy they will hold their money in the bank.

I think roofers will see the prices of all ashpalt based products drop because the big manufacturers will have no option except to pass on their lower costs to move warehouses full of stock however this will not happen until around July / August.

I think the roofers can expect their skills challenged repairing what may already be akin to patch work quilts just to get customers through the winter.

I sincerely hope I am wrong re: all of the above.

>>>

I have of course been cutting cost. I have complied with all of the State mandates , I have gone over to the exemptions on the WC . I have lowered my liability cost to the least I have ever paid. My phone I have on the OOMA no cost except $29.00 a year. No yellow page advertisements . A one line white page soon to be none. Next year cell phone only contact . I'm still looking for a dry DSL line. All of my business is referral or repeat customers. With the suppliers being as hungry or more so , they are much easier to manipulate on pricing . My latest on 30 yr dimensional $71.40 sq. 50 dollars delivery. All materials per sq approximately $ 85.00 if just a regular hip or gable walk able. That leaves me with what I have hearing on this forum Plenty $$$$$. Lean mean ready to tear it up. I guess the most expensive for me is the pricing I'm reading about here. Of course that doesn't hurt but helps me . A little tounge and cheek on some of the comments . Just a reality check on most.>>>

Asphalt products for sure. CGL is softening...that was once the bugbear. W/C was once the bugbear. Come August 1, it's going to be meeting the new Title 24 standards I suspect. Keeping up with the constantly-changing regulations has always caused huge increases in unbillable hours. That is getting worse again.>>>

Another point to be considered, is not necessarily the cost increases that hit us directly, but the belt tightening to let go of some of the excess overhead.

How do you predict the lead flow in a recessionary time and the moods of the customers.

X amount of dollars will not generate the exact same quantity of leads as they used to, so the decisions have to be made for a year in advance for some advertising venues and you have to stick by your decision and analyze to get the best results from the fewer leads being provided. Cost/Risk Ratio for this very high expenditure is critical during these times.

Fortunately, I deleted my excessively high dollar cost Yellow Pages, just in time for my new website to start generating the leads and that is paying off very well, not necessarily for closing ratios, but as far as lead potential it is going better than planned.

Ed >>>

Shingles.

With asphalt projected to continue to rise through 2013, that isn't going to change, either.>>>

Price of shingles no question about it. Why they are still charging $ 27/28 a bundle is unexplainable. Gun nails have gotten expensive as well.>>>

The largest factor has been the costs of asphalt related materials and the excuses given, that even though oil pricing has gone down to over one year ago levels, that the portion of the crude used for shingles and other asphalt based products are derived from the last 5% or so of the produced product.

Additionally, many lower priced competitors will eventually wind up cutting their own throats, by not including the proper increases in their pricing, but that does not help in the short term.

I now believe in escalation clauses and cost allowances for materials as part of my contract language to protect myself from unforseen price increases.

Ed

>>>

The largest factor has been the costs of asphalt related materials and the excuses given, that even though oil pricing has gone down to over one year ago levels, that the portion of the crude used for shingles and other asphalt based products are derived from the last 5% or so of the produced product.

Additionally, many lower priced competitors will eventually wind up cutting their own throats, by not including the proper increases in their pricing, but that does not help in the short term.

I now believe in escalation clauses and cost allowances for materials as part of my contract language to protect myself from unforseen price increases.

Ed

>>>

Many of my customers have lots to say about health care costs rising. Many have been forced to cut back on the portion they pay for their employees or reduce company costs by increasing employee deductibles and co-pays. Spring/summer last year was also when we hit $4+ gas. But the cost of shingles still seems to be the number 1 issue. Even recently we've seen prices come down of felt, plywood, nails, and other accessories but manufacturers still raised shingles prices March 2nd.>>>