“I know a lot of people don’t like to go out and spend an hour installing a toilet-paper holder,” Darryl Rose says. “I love it.”
He should. Get Dwell, the business that Rose started out of his suburban Chicago home five years ago, has grown to employ five full-time carpenters. Unlike a carpenter working for a full-service remodeling company, who might be on the same job for months, the staff of Get Dwell typically have no idea what they’re doing tomorrow. It could be mending a fence and replacing attic insulation trashed by squirrels. It might involve re-hanging a squeaky door. For instance, Rose received an e-mail from one client with a list of projects that includes weather-stripping the front door, leveling a cabinet in the basement, repairing a window, and re-doing a kitchen countertop. “I forgot the name of the guy who came out last time,” the e-mail reads. “But would like to use him again. What is your lead time for the work?”
Money in the Door
Remodeling companies could learn a few things from Get Dwell. Most full-service remodelers are regularly asked to do small jobs by homeowners who assume that the remodeler is equipped to take on any task having to do with construction or the home. But many remodelers would prefer not to get involved with the kinds of jobs in which Get Dwell specializes. “The more complex the project, the better we are at it,” says Dennis Gehman, owner of Gehman Custom Remodeling, in Harleysville, Pa.
The slow period that Gehman went through last year forced him to lay off a half-dozen employees. But lately Gehman has been able to find the large projects that have always been his company’s bread and butter. That makes Gehman Custom Remodeling an exception. For most remodelers, the new normal of recessionary economics is that big projects either went away or got smaller. And it’s the really small jobs — maintenance and repair — that will keep crews busy and cash flowing. “The name of the game is getting money in the door,” says Donna Bade Shirey, owner of Shirey Contracting and Shirey Handyman Service, in Bellevue, Wash. “Small jobs get contractors through slow times.”
This year the handyman division, which Shirey launched six years ago, provided almost half of the company’s volume. But small jobs, she says, are a different business. “Small jobs are like an auto body shop,” Shirey says. “You get paid today for what you did today.”
Small and Smaller
Small jobs may be more difficult to manage, but that’s where the home improvement market is trended lately. At the end of 2007, the “Maintenance and Repairs” portion of the remodeling market, as tracked by the U.S. Census Bureau, was going up, the “Additions and Alternations” portion headed in the opposite direction as housing sales faltered, equity diminished, foreclosures rose, and credit tightened. “People will spend 15% to 20% more on a home improvement project if they’re paying with Other People’s Money,” says Steve Klitsch, general manager of Creative Concepts Remodeling, in Germantown, Md. As credit has contracted, so has the average job size at most remodeling companies. That has particularly hurt companies structured to do a few large projects a year. Yet, in spite of reduced volume, some of those companies view small jobs as outside their business model and risky. “We haven’t done any truly small projects — which I define as $5,000 or less — for years,” says Mark Pennington, secretary/treasurer of Gardner Fox, a design/build company in the Philadelphia suburbs. “We’re just not set up to. There are so many barriers to that work from a price standpoint.”
Gardner Fox has found jobs, but they’re smaller jobs. That is, the family room addition that might have been priced at $200,000 in boom times now comes in at $160,000 — same square footage but “value engineered” to cost less. “Clients want us to help them come up with cost-effective ways to meet their needs,” Pennington says. And the company, founded by two architects, is more than willing to provide small-job services to past clients on demand. Such services feed the ongoing goodwill that makes the company the logical place to go for a homeowners’ next remodel.
For an operation such as Dutchess Building Specialists, in Poughkeepsie, N.Y., smaller means two things: making large projects affordable, and finding ways to efficiently perform maintenance and repair jobs. When it comes to projects such as bath remodels, “we’re being flexible,” operations manager Bob Lutz explains, “which helps lower costs.” DBS is also seeking ways to expand the separate handyman division created two years ago strictly for existing clients. Moving into 2010, management would like handyman to generate $600,000 and to service more than just existing clients. Handyman business has doubled in a year, Lutz says, and the process is “evolving” as DBS managers figure out how to create a streamlined system to profitably service jobs that might involve no more than sending a technician to a client’s house to change out a lockset.