Intuit Study Reveals Contractors Undercharge, Risking Business Failure

Intuit Study Reveals Contractors Undercharge, Risking Business Failure; Contractors Optimistic on Industry Growth, Though May Struggle to Maintain Profitability

    Business Editors/Building/Construction Writers/High-Tech Editors
    International Builders' Show

    ORLANDO, Fla.--(BUSINESS WIRE)--Jan. 14, 2005--Contractors are undercharging customers, at the risk of their own business' success, according to the second annual Intuit Construction Business Solutions industry study, conducted to better understand the business needs and challenges of the industry.
    One out of two contractors report they commonly omit general conditions costs such as supervision, phone calls and temporary power from their job estimates, depriving themselves of deserved revenue and gross profit. Respondents seemed to recognize this tendency, citing greater job profitability (65 percent) and more accurate estimating (57 percent) as the areas of their business needing the most improvement.
    Despite the obstacles in managing their businesses, contractors surveyed estimate their current gross profitability per job at 15.5 percent and anticipate double-digit industry growth (12 percent) over the next five years.
    Conducted for Intuit (Nasdaq:INTU) by independent research firm Decipher, the study surveyed more than 500 commercial and residential contractors and subcontractors in the United States. The results were announced today at the International Builders' Show, where 90,000 building professionals are attending the world's largest annual trade event for the construction industry.
    "Contractors' reported areas of improvement and their perception of future revenue growth, alludes to the industry's need to maintain profitability, especially as contractors strive to take their businesses to the next level of growth," said Carol Novello, president of Intuit Construction Business Solutions.
    To meet growth projections, 66 percent of respondents said they would hire additional field employees. At the same time, nearly as many (65 percent) said hiring quality employees was the greatest challenge in the labor force. And when asked to name the most frustrating aspect of managing a contracting business, 50 percent of respondents cited scheduling labor and managing work crew productivity.
    "Business growth is not simply about hiring more employees and winning more jobs," Novello added. "Success in today's unpredictable economic landscape depends on effectively managing your business and crews to continuously uncover costly inefficiencies and new revenue opportunities.
    "This study shows that the construction industry must make managing profitability and productivity a priority to ensure business success. The successful companies are those that strike a balance between trade expertise and business acumen," she said.
    Companies posting revenue of $10 million or more per year were the most successful, according to the survey. They have been in business longer and have adopted an integrated business management approach to manage their profitability and productivity. This approach combines critical business functions, such as estimating, scheduling and accounting, instead of using disparate solutions and systems.

    The Intuit study uncovered several other notable findings:

    Respondent demographics

--	New construction vs. remodeling: Some 64 percent of respondents run new construction businesses rather than remodeling.
--	Years on the job: Commercial contractors surveyed average nearly 20 years in business. Residential contractors average nearly 15 years while subcontractors average nearly 18 years.
--	Retirement planning: A total of 67 percent of respondents have no exit strategy in place, although 60 percent of contractors in business for more than 10 years do.
--	Successors: Of those respondents with exit strategies, 38 percent would sell or give their company to family members.

    Business outlook

    -- The economy: Seventy-two percent see interest rates and the
    economy as the key factors driving construction industry
    growth.

    "Right for Contractors" Solutions

    Intuit Master Builder(R) software is Intuit's most advanced construction business management solution. It is built to serve the needs of general contractors and subcontractors of all trades -- home building, remodeling, electrical, plumbing and HVAC, commercial and heavy construction, and specialty trades. The package addresses the key fundamentals of the construction business profit cycle -- estimating, project management, accounting and analysis -- all in a single system. It also includes support for construction-specific functions, including certified and union payroll, service and equipment management, automated scheduling and subcontract management.
    In addition, Intuit offers construction editions of QuickBooks(R), the best-selling business financial software for small businesses. QuickBooks Premier: Contractor Edition 2005 and QuickBooks Enterprise Solutions: Contractor Edition offer the ease-of-use features of the popular-selling QuickBooks software, optimized to help contractor firms manage their businesses more effectively.
    More information on Intuit Master Builder is available at http://masterbuilder.intuit.com. For more information on QuickBooks: Contractor Editions visit www.usequickbooks.com/contractor.

    About Intuit Construction Business Solutions

    Acquired by Intuit Inc. in November 2001 as part of the company's "Right for My Business" strategy to deliver business solutions to vertical markets, Intuit Master Builder offers contractors a complete construction business management solution. Through a nationwide network of Solution Providers and Certified ProAdvisors, Intuit offers online classes, live seminars, business management consulting, and expert technical support. For more information about Intuit Master Builder, please visit: http://masterbuilder.intuit.com.

    About Intuit Inc.

    Intuit Inc. is a leading provider of business and financial management solutions for small and mid-sized businesses, consumers and accounting professionals. Its flagship products and services, including QuickBooks(R), Quicken(R) and TurboTax(R) software, simplify small business management and payroll processing, personal finance, and tax preparation and filing. ProSeries(R) and Lacerte(R) are Intuit's leading tax preparation software suites for professional accountants. Founded in 1983, Intuit had annual revenue of nearly $1.9 billion in its fiscal year 2004. The company has nearly 7,000 employees with major offices in 13 states across the U.S. and offices in Canada and the United Kingdom. More information can be found at www.intuit.com.

    Survey Background and Methodology

    Decipher Inc., an independent, full-service market research firm, conducted the Intuit Construction Business Solutions Study from Oct. 14 through Nov. 20, 2004. A sample of 500 residential and commercial contractors and subcontractors was contacted and accessed the survey via Decipher's online CATI system.

    Intuit, the Intuit logo, Intuit Master Builder, Lacerte, ProSeries, Quicken, QuickBooks and QuickBooks Premier: Contractor Edition, TurboTax, among others, are trademarks, registered trademarks and/or registered service marks of Intuit Inc. in the United States and other countries.

--30--NL/sf*

CONTACT: Intuit Construction Business Solutions Laura Uribarri, 707-521-7322 Laura_Uribarri@intuit.com or Access Communications Cassie Divine, 415-844-6248 cdivine@accesspr.com

KEYWORD: FLORIDA CALIFORNIA INDUSTRY KEYWORD: REAL ESTATE BUILDING/CONSTRUCTION HARDWARE SOFTWARE BANKING TRADESHOW SOURCE: Intuit Inc.

Copyright Business Wire 2005