As president of Fox Design/Build Remodelers, Gary Demos felt “alone on an island.” He lacked someone he could talk decisions over with. So in 2007, the Columbus, Ohio, remodeler applied to join the Big Dogs.
Eleven companies belong to the group, part of the National Association of Home Builders (NAHB) Remodeling 20 clubs. Some members have been in it for as long as it’s existed, but Demos joined right before the housing market crashed in the fall of 2008. He and other members say that the Big Dogs helped get their companies through those bewildering months and the lean times that followed.
There are a number of peer groups in the remodeling industry, some sponsored and maintained by associations such as the NAHB, some, like Remodelers Advantage, put together by consultants. Generally numbering no more than a dozen noncompeting companies, members share their financials, best practices, and a certain solidarity. “When you meet with these guys,” says Scott McClurg, owner of McClurg Remodeling, in Marcellus, N.Y., “you feel invigorated and revitalized.”
Big Dogs is unusual among peer groups for its longevity — more than a dozen years — and its diversity. Most groups consist of companies based on similar business models. Big Dogs includes design/build and replacement contractors.
The two types of companies have learned from each other, owners say, helping the full-service companies to improve their marketing, sales, and installation procedures and making replacement companies more attentive to the customer relationship. “On the design/build side we tend to be relationship-oriented,” says Shawn Nelson, of New Spaces, a design/build remodeler in Burnsville, Minn. “What that means [for many companies] is that there is no marketing process in place. We go to people when they call us. So we looked at how [replacement companies] grow leads and how they work to get them into a sales funnel.” Nelson says the replacement companies in the group also showed him how to wring greater efficiencies from the installation process: “We cut the length of time we take to actually build a bathroom by 50%.”
In better economic times, remodelers joined peer groups to take their companies to the next level. In a soft economy, peer groups can help members steer through periods of slow sales.
“When things were really down,” says Denny Cisney, co-owner of Cisney & O’Donnell, a remodeling and home building company in Huntingdon, Pa., “we had teleconference calls where we talked about overhead,” what to cut and when. More experienced members urged others not to wait-and-see but to plan and execute an overhead-reduction strategy. Some members were reluctant to lay off staff and found the fortitude to reduce payroll by comparing notes with other members. All agreed on the need to explain to employees what was happening and why. “We talked about how to communicate to your people,” Nemos says.
In a soft economy , peer groups can help members steer through periods of slow sales.
The other issue that surfaced had to do with marketing. With 30% to 50% drops in volume that followed the fall of 2008, members debated whether or not to invest more in advertising until economic signals were clearer. When business began to pick back up, some found their websites to be the marketing vehicle of choice. Design/build companies looking to do more face-to-face asked replacement companies in the group — some of which are at as many as 90 events a year — how it’s done.
Board Of Directors
Disputes within the group do happen, but over the years members have developed a level of amicability that at times transcends their business relationship. For instance, when one member was hit with divorce, a drop in sales, and prostate cancer all at once, five other Big Dogs took turns managing his company while he was away.
For company owners, the benefit is not only that they acquire outside advisers who are just an e-mail click away, but that the learning curve is shorter, and sometimes less costly, when it comes to strategic decisions.
Ken Moeslein, CEO of Legacy Remodeling, a Pittsburgh company that has been a window and siding contractor for most of its 25 years, decided a little more than a year ago to enter the design/build business and take on kitchens, additions, and other big-ticket projects. “Instead of spending hours and hours and tens of thousands of dollars looking at design software,” he says, “I could make 10 quick phone calls [to Big Dogs members] and get the good, the bad, and the ugly.” His company recently finished a $90,000 addition. “When I think about the Big Dogs,” Moeslein says, “they are my board of directors.”
—Jim Cory is editor or REPLACEMENT CONTRACTOR, a sister publication of REMODELING.
Click here to read an interview with Ken Moeslein.