It’s not unusual for the end-of-the-year holidays and early winter months to be slow, but this time around it’s scary slow. Dozens of remodelers interviewed for this story said that their business is down 30%, 50%, even 80% from where it should be. They have little in the pipeline and increased competition from home builders to interior designers and anyone else connected with the building industry. What’s saving these remodelers, in many cases, is their ability to do smaller projects.
Seek Small Jobs
Handymen, such as Todd Tarzia of Todd of All Trades, in Bloomfield, N.Y., are working to capacity and are even turning away work. “I’d hire two employees if I could afford the insurance fees,” Tarzia says. He charges clients by the hour for electrical, plumbing, drywall, painting, and any other home-repair projects that come along. His clients mostly are older; many of them are women. “The economy hasn’t affected me at all,” he says.
“Small” means something different to each business — a kitchen remodel might be a small job for some. What seems to be more common, however, is that remodelers who would only do small jobs when asked by past clients and referrals now find themselves soliciting this work.
“We targeted past clients with a letter telling them we can ‘bail them out’ before the holidays,” says Linda Minde, owner of Tri-Lite Builders, in Chandler, Ariz. “We sent 100 letters and got 10 calls for small projects and one call for a larger one. We’re soliciting small jobs to fill holes to keep our guys busy.”
Bob Fleming, owner of Classic Remodeling & Construction, on Johns Island, S.C., let go four employees in August but found he was “killing” himself selling small jobs. He hired back one of those employees to sell small jobs on commission only. That employee sells, estimates, and runs jobs.
Fleming and the sales rep set a $500,000 goal, “and in three months he sold $350,000 worth of work and with good margins,” Fleming says. “It’s something we should have done a long time ago.” If there’s too much work, a project manager helps run a job. Fleming is not ready to start a new division but says that he will continue this handyman practice once the economy is back on track.
At the other end of the spectrum is David Leff, owner of Leff Construction, in Sebastopol, Calif. He’s launching a marketing campaign and kitchen and bath division — which for Leff are smaller jobs. “We’re letting people know we apply the same level of organization and management to small jobs [that we do to larger jobs].”
Death By 1,000 Cuts
A small job might come from a scaled-back larger job. Ron Trull, owner of Trull Building Co., in Newtown Square, just west of Philadelphia, has seen several recent projects whittled down — from an addition, for example, to just windows. “We’re not turning away anything that comes along,” says Trull, whose sales were off 25% in 2008.
To keep projects from walking, as budgets dwindle, Minde has become creative, letting clients participate on their jobs. “Instead of everything being turnkey, clients might ask to do their own flooring and painting.” In the past, that wasn’t acceptable. But now, Trilite allows that activity at the end of the project “[if it doesn’t have] to do with warranty or jeopardize the quality of the project,” Minde says.
Jack Be Nimble
While someone like Tarzia is perfectly positioned — low overhead and no staff to support — to do small jobs profitably, larger remodelers need to be flexible and plan well to make smaller jobs pay off. It’s not just a matter of raising margins and trying to do more projects. “Small jobs can be a different business. There’s a whole set of planning and marketing. It’s a different sales model,” says Michael McCutcheon, owner of McCutcheon Construction, in Berkeley, Calif. “One thing I’ve learned during slowdowns is that you have to do small projects and service work all the time so that in times like these people will know to call you.”