Competition in today's remodeling industry is, in the words of one contractor, a strange thing. Sprawling and largely unregulated, the market is thick with companies of vastly different shapes, sizes, and levels of business acumen.
For upscale companies trying to carve out a finely articulated segment of the high-end market, competing often means keeping pace with peers but running in a slightly different direction.
Noting the need to keep a close eye on the competition, Michael Anschel, a partner in the Minneapolis firm Otogawa-Anschel, says, his company is constantly aware of what its peers are doing.
“At the same time, many of us think of our businesses as different from our peers',” Anschel adds. “Part of it is seeing what they're doing so you can try to make yourself distinct and different.”
Jobsite signs, he says, are a perfect example. “The companies we were most interested in competing with had unique yard signs, so we made the decision to come up with a unique sign. A lot of our competitors' signs had trimmed wood that looked more craftsman-like. Ours is a wedge shape suspended with guy wires,” Anschel says. “It's more architectural and contemporary. It conveys that we're a high-end firm doing more contemporary stuff.”
One Virginia remodeler, who asked to remain anonymous, says the success of his midsize upscale company has, in recent years, been threatened by a much larger competitor that has the resources to employ professional headhunters to poach smaller companies' best talent. “For small companies, it's a struggle to keep up with the compensation that's being offered by larger companies,” he says. “It's a constant battle; labor prices are skyrocketing and so are housing prices. It's getting harder to keep employees who can afford to live close to where we work. You want to run a consistent company, but it's difficult to do that when people have to commute 50 miles.”
The solution, he has learned, is to focus on the intangibles his company provides: benefits, a family-first atmosphere, support for spiritual endeavors. “Every chance you get, every time you get your guys together as a group, you have to talk about the company culture,” he says.
But while the industry might once have been more cutthroat, for many remodelers today, collaboration and a desire for mutual advancement are increasingly common. In some areas, association roundtables bring companies together. Meeting regularly with eight or so competitors through his local National Association of the Remodeling Industry chapter, Anschel says he feels no need to keep closed off. “I don't think there are any real secrets or things we wouldn't share with those firms. Information is only as valuable as what you do with it,” he says.
Some remodelers, finding associations too impersonal and, in the words of one remodeler, concerned too much with their own preservation, have taken the roundtable concept a step further by creating more personal local support groups. San Francisco Bay Area industry consultant Judith Miller leads the Northern California Splinter Group, so named because its members splintered off from the local association. The group brings together like-minded owners to discuss issues specific to running a midsize upscale company —issues less frequently addressed by associations that look to benefit companies of all stripes and sizes.
Inspired by Miller's group, Mark Scott of Mark IV Builders, a full-service remodeling company in Bethesda, Md., helped found a Washington, D.C., version. He says the impetus behind his Splinter Group was to create an environment that would be more likely than an association to produce an honest accounting of participants' troubles.
“I wanted to build a better communication vehicle,” he says. “At our meetings, it's safe to bring up issues we're having trouble with, and it's a place where we're all comfortable enough with each other to say, ‘You're full of it, you're wrong, you shouldn't try to do that and here's why.'”
Jeff Rainey, co-owner of Home Equity Builders in Arlington, Va., is another member of the D.C. group. Rainey says the group's success depends on members' willingness to think about the business in terms that aren't strictly bottom-line. “It works quite well,” he says, “because of a mutual respect we have for one another's companies.”
David Zuckerman is a freelance writer based in Brooklyn, N.Y. they feel like, ‘Oh, he gets me.'”