Each of our businesses has an ideal blend of doing work with in-house labor vs. with subcontractors. It is a critical mix that affects our client experience and our quality of work. It is also a critical mix that has a direct impact on our cash flow and bottom line. Expect to pay a premium of about $10,000-$20,000 per year for work done in-house vs. by subcontractors (assuming they move at the same pace) – for insurance, time off, etc. There are times this premium is worth every penny. There are other times it is not. Take inventory of when it is worth the premium and when it is not.

As you see your production lead times shorten with winter, the holidays and the market; keep this critical blend in check. Do more work with in-house labor to keep your A-level carpenters busy and productive. But don’t swing too far that way or you will be putting at risk your entire team.

This market is going to take some time to rebound – too long to have this blend and other key metrics of your business not be balanced.

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