Builder allowance work

Definition

Flooring sold inside a homebuilder's contract at an allowance the buyer can upgrade.

Why It Matters

Nearly a third of this trade's receipts arrive as a subcontract from another contractor and much of that is builder work, bid annually at thin base margin where the actual profit is the upgrade above the allowance. Two shops at the same revenue can have completely different earnings depending on upgrade capture, and the revenue line hides it. Ask for upgrade capture by builder across two years, and ask what happens to it when the allowance is renegotiated.