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Home | Spray Foam Business | Inside and Out: Know Your Business
SES Foam talks about knowing your spray foam business.

Inside and Out: Know Your Business

By RYAN SPENCER

Details: the snarled mess of intricacies from which understanding emerges. When it comes to evaluating an operation, digging into the details can reveal obscure trends, offer insights about performance, and answer questions about productivity. Indeed, if management isn’t evaluating projects on a consistent basis, margins will begin to decrease. So when analyzing your business, how do you truly know if the job was performed efficiently and effectively, and is that information being used to improve your success rate the next time? Essentially, analysis relies on measurables–collected data (i.e. board feet of installed foam or minutes of downtime). It’s only with sufficient data that management can draw accurate conclusions and make proper adjustments.

When a bid goes out, there are inherent expectations on the cost of performing the job that are the basis for your profit, as well as the basis for your next bid. The performance of your equipment, personnel, and product are obviously critical to the success of your business, so analyzing this performance over time is key to effectively managing the operation. Understanding the performance of various operations of your company can be a valuable tool in determining your priorities. If indeed your jobs are coming in on cost, then the levers within your company to improve performance lie in either changing your bid margin or improving your efficiency. On the other hand, if jobs are not meeting the same performance as the bid, then your priority might be to focus on personnel, equipment, or product.  Regardless, analyzing the correct data is crucial for making the right management decisions.

With spray foam applications, the foundation of proper analysis begins with knowing exactly how much foam was sprayed on a given job. This factor can be broken down into how much material was processed (material usage), how much foam was installed (foam yield), and how much foam was waste. While all three factors are important, yield is the most significant. Remember: if cost of goods is roughly 40-60% of job price, then a 10% change in product performance can result in 4-6% more profit to your bottom line. In many cases, this small change can turn a struggling business into a successful one.

When determining material usage, it’s fairly common to use a stroke counter, but there is a technology on the market that can track drum levels electronically, which is a more exact method. In any case, material usage doesn’t equate to an accurate assessment of foam yield. To ascertain that metric, the only way to be sure is to measure the end product on the job site, which is typically done with a depth gauge. Obviously, more measurements translate to greater accuracy, but it’s not ideal to excessively poke and prod the foam, so utilizing depth markers can facilitate accurate measurements without abusing the foam too much. An often-overlooked metric is foam waste, including foam trimmings and excess foam that adheres to anywhere besides the target substrate. Gathering and weighing the foam waste, while potentially laborious, can be a valuable way to more accurately assess foam yield, and these measurements might even result in sobering realizations about the value of lost product.

Supposing material usage, foam waste, and yield are sufficiently measured–what now? That data is no good by itself; it must be compared to similar data in order to draw conclusions about performance. In some cases, data collection might only allow for job-to-job comparisons, or perhaps even phase-to-phase comparisons of a particular job. For the most accurate analysis, it’s best to put in place a process wherein application crews are measuring the major metrics on a daily basis. It might seem daunting at first, but with more data points to analyze, trends in job performance become not only more apparent, but also more conclusive.

For an application process as complex as the installation of spray foam, there can be a bevy of extraneous variables clouding whatever conclusions can be drawn from the data. For example, when comparing two jobs, was the less productive job a result of inefficient equipment, or due to variations in temperature and humidity? With only one set of data taken per job, it can be difficult to say either way, but with daily data, there’s a better chance to pin down the root cause. Furthermore, if a contracting company operates more than one spray rig, there are additional opportunities for analyzing job performance. With more rigs, and therefore more crews, there are certainly more data points, and comparing the rigs to each other can reveal information about labor efficiency. For instance, a variance in productivity of, say, 15% between two rigs operating on a particular job site could indicate an underperforming crew or inefficient equipment. To get a better idea, management could simply reassign each crew to the other rig. If the variance persists between the rigs, then it’s time to throughly inspect the equipment, and perhaps even new equipment isn’t out of the question.

While foam yield is perhaps the most significant metric to analyze, it’s not the only factor that can be improved with analysis. Evaluating the performance of application crews is critical to a well-run operation, but the issue is how best to record this data? How do you really know when the crew is working? How can you verify that downtime occurred in a particular time frame? Until recently, these factors were difficult data to capture, but now there are a few tools at management’s disposal. Some of the latest proportioners on the market can actually keep tabs on when a machine is off, on, and spraying, which provides for a better assessment of workflow. Also, tracking technology on the market can show where a rig is, where it’s been, and for how long–valuable data for controlling travel costs.

So with all of the discussion about analysis, a simple question is bound to pop up: how? In other words, what tools can be used to analyze the data after it’s collected? The tried and true method involves taking a form that was filled out on the job site–measurement by measurement, data point by data point–and crunching the numbers in a spreadsheet (bringing a tablet to the job site can expedite the process, as measurements can be entered directly into a spreadsheet). In either case, the analysis relies on setting up the spreadsheet properly, which entails hunting down a relevant template or taking the time to set it up manually. There may come a time when such time-consuming tools are not effective. Running a spray foam business off of Word docs, spreadsheets, and handwritten paperwork can create opportunities for human error, unproductive administrative time, redundant work, and inadequate performance analysis. Alternatively, there are some software solutions on the market, like JobPro Technology, that are specifically tailored for handling job site data and tracking everything from expenses to tasks.

Basically, management must compare the time, effort, and potential risks involved in working with several tools versus the money spent on specialized software. The point is, when it comes to thoroughly understanding the nitty-gritty details of a spray foam operation, contractors have options–it’s just a matter of leveraging them.

Contact SucraSeal/SES Foam
Direct any questions about analyzing the performance of your operation, or about the availability of limited contractor territories, to SES Foam:

Phone: 1-713-239-0252
Website: www.sucraseal.com | www.sesfoam.com