Brent Bowthorpe, Class One Disaster Recovery; West Jordan, Utah; Big 50 1999
Focus for Control
The value of being a niche business is it defines processes for you. It directs your marketing. We go after insurance agents, adjusters, and property managers. The only question left for us is, how do we build those relationships? General remodelers spend a lot of time trying to figure out where to go and what to do. We don't have to do that.
We did about $2 million last year with 12 employees, covering an area of 60 miles around Salt Lake City. Our niche helps us define production and internal processes for three job types: small water damage, major reconstruction, and mold remediation. It also helps us determine how a job is costed, how we follow up, how quickly an estimate should be completed, and how quickly a job should be closed out. I don't know where we'd be with those processes without a specific market.
Smooth Out the Dips
One of the values of a niche is you can predefine market dips. There are slower and busier periods. If we get no bad weather, it gets slower in January and February but picks up when people run sprinkler systems in the spring. We plan slower periods, using them to prepare and train. We often hire in those periods. If we have clients who want additional work, we schedule it then.
A specific niche helps with sub trades and resources. I have better subs in those areas. Flooring is a huge part of our business. Because we deal with it frequently, we're out in the market and keep better sub trades.
Jimmy Waller, Waller Construction; Lakeland, Fla.; Big 50 2001
Do It All
The strongest argument for diversification is a multiple stream of revenue. It keeps production steady and the team enthusiastic. They know every day will be a challenge because every day is different. Of our 25 field employees, 15 are cross-trained. They could work in remodeling, insurance restoration, or roofing. Being full service is a benefit when trying to hire and keep good people. We have a buffet of jobs. We do $5.5 million in business a year.
When you're full service, you're able to make better vendor relationships and build a better network of subcontractors. You have leverage for scheduling. You get better supplier price discounts. You generate more referrals from related businesses.
Fight With Strength
We've had to examine ourselves and say although we're full service, we might not be where we need to be in one area. In kitchen remodeling, we can do Formica and raised panel cabinets. When someone else does granite countertops day in and day out and we do one out of every 10 jobs that way, they have a huge advantage. The way we compete is by having a stronger warranty, a 41-year track record, a great reputation, and professional technicians. Plus, our schedule is prompt; we can sign a job today and start in two weeks.
One major challenge is overhead, and we have to scrutinize it constantly. We have to self-examine and see what we're good at, what's making money. There's no use being full service out of ego, because the cross training alone will cripple you. To be big just to be big is a dead end.