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Home | Spray Foam 411 | 5 Ways SPF Contractors Lose Money

5 Ways SPF Contractors Lose Money

Have you ever noticed contractors that never seem to make money on jobs?  They bid correctly, have responsible employees, but still can’t seem to make enough per job to be comfortable.  At the end of the year they notice the material and labor costs have greatly affected their bottom line.  In my four-and-a-half decades of working in the spray foam industry, I have observed a few not so obvious factors that can cause job costs to skyrocket and lose thousands of dollars in profit.  Some of these lessons I learned the hard way from personal experience.

1. Poor Spray Technique

Poor spray technique can cost 30 percent or more foam to achieve a specified minimum thickness.

Poor spray technique can cost 30 percent or more foam to achieve a specified minimum thickness.

The easiest way to lose money on a job is to install more foam than is specified.  No contractor intends to do this, but if your applicators have poor spray technique, they will spray more foam than is required.

Let’s say a contractor is hired to spray two inches of two-pound density SPF to the walls and ceiling of a building.  The contractor measures the surface area to be sprayed at 7,000 square feet.  At approximately 4,500 board feet coverage per kit of foam (1,000 pounds), the job should require conservatively 3,100 pounds of foam.

Wo made more money? This guy? Or, this guy?

Wo made more money? This guy? Or, this guy?

 

 

But if the applicator’s spray technique is poor, he could end up with four inches in some spots, three inches in another, and two inches in the rest of the wall.

The contractor has installed an average of three inches of foam instead of the contracted two inches.  Instead of spraying 3,100 pounds of foam, he has sprayed 4,600 pounds of foam.

Make sure your applicator training includes proper spray technique, in addition to equipment maintenance, troubleshooting, safety, and health.

2. Cold Substrates

Cold substrates can reduce yield by 20 percent or more. A simple solution like a space heater can save you money.

Cold substrates can reduce yield by 20 percent or more. A simple solution like a space heater can save you money.

Typically the colder the substrate, the less coverage obtained per pound. Colder substrates can take 20 percent to 40 percent more foam to cover the same area.

A good rule of thumb is to add 15 to 20 degrees to the minimum substrate temperature listed on the supplier’s technical data.  For example, if the data sheet lists the minimum substrate temperature at 500°F, then the optimum yield can be expected around 700°F.

Even the cool weather formulas work best if you maintain a warmer substrate.  If the technical data sheet lists the minimum substrate temperature at 350°F, then you would probably get better yield at 500°F

Application Yield at 700°F                                  Estimated Expected Yield  Yield at 500°F            Estimated Expected Yield
Open-Cell Foam 2×4 wall 12,000 – 15,000  bd. ft. per 1000 lbs. 10,000 – 12,000  bd. ft. per 1000 lbs.
Open-Cell Foam attic (no trimming) 15,000 – 17,000 bd. ft. per 1000 lbs. 12,000 – 15,000 bd. ft. per 1000 lbs.
Closed-Cell Foam 2×4 wall 4,000 – 4,200 bd. ft. per 1000 lbs. 3,250 – 3,500 bd. ft. per 1000 lbs.
Closed-Cell Foam open wall (no trimming) 4,250 – 4,500 bd. ft. per 1000 lbs. 3,500 – 4,000 bd. ft. per 1000 lbs.
(The yields in the tables above are averages based on my experience spraying more than 100 brands of SPF over the years.  The expected yields of various SPF systems at different temperatures can vary significantly.  It is important to measure the yield of your SPF at different temperatures to obtain an accurate estimated yield.)

 

How do you warm up the substrate?  Often a small space heater can heat a 20-by-20-foot room with a wood substrate to acceptable levels within a few hours.  Concrete substrates can take longer, sometimes overnight.  Larger areas would require a forced air salamander-type heater. NOTE: Electric salamanders are preferable over fuel-fired salamanders due to the carbon monoxide and moisture that the fuel-fired salamanders exude.

3. Equipment Breakdowns

Make sure you have a regular maintenance program for all of your equipment and verify it is in good working condition before taking it to a job site.  Few things irritate a contractor more than having four or five crew members standing around while someone works on a generator, compressor, transfer pump, spray gun, or fixes a flat tire.  Not only are you wasting spraying time but the labor costs skyrocket.  It makes a lot more sense to have one man at around $25 to $30 an hour work on equipment in a well-provisioned shop than have a whole crew at $100 to $150 an hour watching that man work until they can become productive.

4. Bad Directions

Is my GPS working? Poor directions can send you on a wild goose chase.

Is my GPS working? Poor directions can send you on a wild goose chase.

How many times have you relied on poorly written directions
to a job site only to spend hours of precious spray time looking for that big white building that the owner says you can’t miss?  It is best to have someone on the crew who has been to the job site ahead of time so they know where it is and how long it takes to get there.  As a related issue, know the traffic patterns.  Especially when working in congested urban areas like Houston or Los Angeles. Sometimes it is best to get to a job site later and work later than to hassle with morning and evening drive traffic.

5. Not Enough Trained Applicators

Many companies have only one main foam applicator per crew. When that applicator takes a break, or goes to lunch, progress on the job stops.  You are only making money when the applicator is installing foam.  Additionally, tired workers make mistakes, get sloppy and want to go home.  A crew of this type may only be able to spray 1,000 to 1,500 pounds of foam per day on a residential project.

I prefer a three-man crew consisting of two applicators and one helper who is an applicator in training. The applicators can trade-off every couple of hours, rest during their break, check on the equipment, get needed supplies, and make sure their crew-mate is correctly installing the foam.  The gun rarely stops and your applicator will be less likely to burn out.  A crew of this type can easily spray 2,000 pounds of foam per day on a residential project.  Another bonus is that good applicators have competitive pride in their workmanship if they have a colleague on the job site.  They don’t like to be shown up by their crew-mate and try their best to spray the smoothest foam.

Cost Differences

So looking at the hypothetical project described in the first scenario:   The job required 3,100 pounds of foam, which would take a crew with two applicators one to two days to install.

On a small project, where all of the negative factors listed above are realized, the job labor and material costs could be very easily double.  Sadly, I have witnessed this scenario on job sites.  The worst-case scenario is all too often realized with companies that are rushed to get a job done.  The more they rush, the worse the problems become.  So take a step back, evaluate your projects objectively and see if you can save some money.

5 Things That Cost Suppliers Money

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1. Poor Storage

It doesn’t matter how great your foam or coating is manufactured and how good the quality control measures are at the plant, if you don’t store it properly.  What is worse than your best customer calling to tell you his foam is just lying there, not rising even with as much heat as the machine can generate?  Then you find out the warehouse you stored the foam in has been letting the foam sitout in 100 degree heat for weeks on end and hasn’t been rotating the stock.  You check your lot numbers and notice the foam has been sitting there since 2005.  Not only does this cost you the old material plus a new batch, but your customer tends to distrust your product from then on.  What makes matters worse, your customer tells his buddies and then they suspect the foam.

2.  Sell on Price

It is so tempting to give that large contractor a barely break-even price on foam or coating just to get their business.  You assume that once they buy the first truckload and love it, then they won’t mind the next shipment coming in a few cents higher.  Large contractors know how to play the pricing game and can get the best salesperson to drop prices for a large order.  The drawback is you get the order but make no money.  Then when they want another truckload, they expect the same price or worse they get the same price from their old supplier just to keep you out of the game.  So, you got one order and made no money.  Price fairly, but remember, you have to make a profit on everything you sell.

3.  Go Nuts On Advertising

Every business must market and advertise their products to get sales.  Particularly in the SPF industry; however, you can get carried away.  The SPF market is very segmented and it is important to find your niche and target audience.  You can spend millions on trade shows, magazines ads, seminars, videos, brochures, radio spots, cable TV segments, and more scatter shooting without results.  Find out what products and services you can offer for a profit, who needs those products and services, how they obtain purchasing information and then target those decision makers and influencers.   $50,000 wisely spent is worth more than a $1,000,000 foolishly spent.

4.  Don’t Have A Good Lead Qualification Program

I’ve worked in companies that had very sophisticated marketing programs that produced literally thousands of leads
a year.  Many times those leads would go to an overworked regional sales manager who would not have the time to properly qualify the leads.  So unless the lead was an obvious potential winner, it was likely to be ignored for months or even worse tossed without any follow-up.   The first year I worked as a salesperson for a major supplier, half of my sales came from leads I picked out of the trash basket of a couple of my associates.  Being the new guy, I had time to qualify them, they didn’t.

5.  Poor Technical Support

Let’s say you make great foam and store and ship it well.  Then the customer gets it and doesn’t know how to properly spray it.  Without a good technical support staff, that customer will eventually cost you money.  Contractors don’t want to screw up jobs, but without good training and technical support it is not only possible but also likely, particularly with new contractors.  If you sell foam or coatings you have to be able to support your customers in the field.

Photos courtesy of Mason Knowles

Spray Foam Magazine does not take editorial positions on particular issues; individual contributions to the magazine express the opinions of discrete authors unless explicitly labeled or otherwise stated. The inclusion of a particular piece in the magazine does not mean that individual staff members or editors concur with the editorial positions represented therein.