Small Victories

The three remodeling business owners profiled here still wear a lot of hats, and still exist — despite the number of years they have individually given their businesses — in what remodeling consultant Judith Miller would call “early growth” stages, those businesses with very involved owners. They have spent years honing their craft and learning about business like many remodeling company owners — the hard way, through trial and error. But they are all in the process of making changes that will lead to growth and profitability. Each has experienced small victories along the way to reaching these larger goals.

Dylan Wadlington, owner, Wadlington Remodeling
Pine Grove Mills, Pa.
Owner's domain: estimating, sales, purchasing, marketing, some field work
Office: 2 off-site consultants
Volume: $600,000

Earlier this year, Dylan Wadlington, owner of Wadlington Remodeling, was interviewed for a REMODELING article about using subcontractors. He seemed glad to be a sole proprietor with no employees and little overhead. He liked working with trade partners because he felt they had the entrepreneurial spirit. He said then, “I find that there's a different pool to pull from — those who want to be an employee and those who want to be self-employed. The level of craftsmanship is better [among subs].”

But six months later, he's talking about making his first hires — two lead carpenters — “[So I won't have to] show up and order things and have everything seem like an emergency rush.”

Informal mentoring and sharing has helped Dylan Wadlington become more confident and professional.

Photo Credit: Annie O'Neill / WpN

Wadlington is typical of many remodelers. He loves to build, but didn't know the first thing about business. He was an environmental and urban sociology major at Penn State and put himself through school building and remodeling; he graduated in 1999. His first whole-house remodel he did between classes, and he figures he made about $8 per hour. “It was terrible,” he says. “The homeowners said they wanted to be the general contractors but really they just wanted to pick colors.”

He soon got work as a subcontractor on a retail space project and learned a lot from the general contractor. “I was a sponge,” he says. “Anything I didn't know, I wanted to find out.” Eventually he got more jobs on his own and did less work for others. In the first year, he didn't make enough to live on. By 2003 things had picked up, and by 2005 his gross sales had doubled to $361,000. “I was overwhelmed and stressed out,” he says. “I was working seven days a week. I developed a weird bald spot on the back of my head. I was crazy. I ran multiple jobs but I didn't have the business acumen.” His office was in his truck in a beer box. “I was six months behind on billing and stretched out on credit.”

It's crude, he admits, but he says, “I had my first CRE [cranial rectal extraction]. I pulled my head out of my butt. I realized I didn't know enough about this business, and I didn't know what I was doing.” Instead of giving up — or getting a steady job as his wife suggested — he began asking for help.

“I looked for any training I could find. I went to the [2005] Remodeling Show in Baltimore and realized that this is what I needed. It was a wealth of information,” Wadlington says. Up until then, he had not read any trade journals, and saw himself as a loner who didn't need the world.

Before Wadlington went to the Show, he wrote a business brief, identifying areas in which he needed help — estimating, scheduling, contracts. “I brought that brief on my laptop, and anyone teaching a class I would show it to, and try to get feedback,” he says.

He took the turnkey class with Dave Lupberger and realized that he needed a coach and mentor. “I still call him and talk to him,” says Wadlington, who has since connected with many successful remodelers he has met at the Show and later through the National Association of Home Builders' Certified Graduate Remodeler (CGR) network and his local NAHB Remodelers group. “People are willing to share because they've been in these hard spots,” he says. “Your success is their success, in a sense.”

Wadlington says that the informal mentoring and sharing was the best thing he'd ever done. Now he feels like he's starting over. But he's doing so from a better position — one in which he has more knowledge and confidence.

Wadlington moved into an office for a while and recently bought a building to house his business. He hired an outside consultant and an accountant to help him get back on track with his bills. Eventually, he got an office manager who has helped with organization. This year he invested in UDA Construction Suite project management software. When he decided to hire lead carpenters, he worked with his accountant to figure out what he'd need to earn in order to pay an employee. “Having an employee will lead to better project management, and I can drive schedules a little more rather than being at the mercy of others' schedules,” Wadlington says. He's also rewriting his business plan and creating an organizational chart. He's asking subs and his office manager to write down exactly what they do and is using online resources to create job descriptions.

Though these steps may seem basic, Wadlington knows he couldn't have done this when he first started out. He had to go through the learning process to reach the level of understanding he has now.

It's still important to him to continue networking and taking industry classes. “Professional athletes don't go to the local playground to play pickup games to train,” he says. “They train with other professional athletes and trainers. You line up to run next to the guy who's faster than you to try to build your skills. That's how I think of all this. I'm putting myself in with a group of professionals who see the way and can help me grow, instead of hanging around at the playground.”

Paul Zachman, owner, Boardwalk Design
Pittsford, N.Y.
Owner's domain: sales, design, estimating
Office: 1; field: 5
Volume: $800,000

Paul Zachman is finding it more difficult than he thought to expand his design/build deck and outdoor living spaces company to include a design/build remodeling division.

Photo Credit: Gary Whelpley

How simple it would be to go from designing and building high-end decks and outdoor living spaces to doing high-end design/build remodeling work. That's what Paul Zachman, owner of Boardwalk Design in Pittsford, N.Y., thought when he decided to expand his then 10-year-old business. Boardwalk Design's outdoor projects were successful and profitable, but with the remodeling division, which was about 30% of his business, he struggled with profitability. “In my mind I had been doing design/build for years. I wanted to take it to the next level. I was sick of marginally bumping along, and I decided I was going to make something of it or get out of it,” he says. “I way underestimated the difficulty.”

Zachman, who has a degree in ornamental horticulture, says he didn't understand the complexities of what he was attempting. He'd gone along for years trusting that employees would care as much as he did about the business. “My general personality is to be hands-off and let my people do what they do,” he says. But he realized that if he didn't offer feedback “it was like they were bowling from behind a curtain. You hear all the noise and action but you have no idea what the score is.”

His positive nature won't let him dwell on it, but he says he wasted a lot of years just “mucking along” without expectations for himself or his employees. “I resisted systematizing and implementing controls,” Zachman says. “I thought things would get better if I just had some better meetings. I was profoundly wrong in that assumption.”

Boardwalk Design is located outside of Rochester, N.Y. Although the economy in that part of the state has gone from bad to worse over the years with large local corporations downsizing or outsourcing, Zachman says that after 17 years he had gotten the hang of it and was able to sustain himself. But severe weather caused him to lay off two or three workers each winter. Getting serious, to him, meant creating a business that engages and supports its employees. He doesn't have a “romantic notion of getting into high-end remodeling,” he says. “It's a matter of growth for my company and my employees to make this a year-round model. If you want to provide benefits and training and opportunities for employees, you need to take on things that a 10-month business can't support.”

He began by hiring a production manager, but admits that he had no game plan other than a vague notion that by hiring someone he'd be free to grow sales.

Although that person helped him develop an Excel-based comprehensive estimating program for deck building, Zachman feels that the position was an overhead burden. “We increased overhead and developed a framework for a company almost twice what we are volume-wise for overhead. I elected to cut overhead because I didn't have a real plan,” he says.

Eventually, and by mutual agreement, the production manager left to follow a different career path. “I felt like I had this machine rolling along. I wanted to do better but didn't know how.” With the money he wasn't spending on a production manager's salary, Zachman began to educate himself.

He had already engaged the services of Diane Gilson, an Ann Arbor, Michigan-based consultant and accountant, who revamped his accounting system. He became more adept at using Quick-Books, started work-in-progress reports, and was more thorough about cost tracking and labor burden calculations. He sent his bookkeeper to further training. He began to work on getting his CGR designation through the NAHB, which he completed in 2006.

But, he says, the biggest thing he did to get serious was to join Business Networks, a peer review group. “It's been a huge gain for me,” Zachman says. “It takes you from 0 to 100 in getting up to speed on forms, contracts, employee handbooks, shared resources. I work with other peer members [learning about] systems they've built.”

Zachman admits that one of his main challenges is discipline. Joining the peer group has forced him to state his goals. The group holds him accountable for his actions — or non-actions. “There's no way to ignore the goals,” he says. “The group always knows when you're blowing smoke.” Recent goals include doing job autopsies and daily time reporting, developing a design/build contract and a construction agreement, and creating an employee handbook. All of these have been implemented.

A business plan and budgeting will be part of Zachman's next set of goals, and he will be sending his three carpenters to the National Association of the Remodeling Industry for lead carpenter training. He's also aware that he is typecast as a deck builder and needs to revamp marketing, which has been mostly word-of-mouth. While he has done projects for nearly 1,500 deck and outdoor living spaces customers over the years, and has a ready-built database, most don't know his remodeling capabilities. “To change the public identity, we may need to change the name to Boardwalk Design Build,” he says, and to let people know we do historic renovation, outdoor living, porches and decks, and full-service design/build.

“I always feel like it's all just at the end of my fingertips,” Zachman says. “Right now, the phone rings without me doing much advertising. I'm in a nice little village. I have a good clientele. Everything is here for me to move in a positive direction. I need to go out and gain more knowledge to make it happen.”

W. Stuart Feldt, owner, W.S. Feldt General Contractor, Seattle
Owner's domain: production management, sales, estimating, marketing
Office: 1; field: 5
Volume: $1.2 million

Stuart Feldt has been focusing on systems to help him move closer to his goals of working less and eventually creating an exit strategy.

Photo Credit: Ron Wurzer / WpN

What concerns Stuart Feldt, owner of W.S. Feldt General Contractor in Seattle, after 14 years in business is systems. “Designing a system is easy,” he says. “Getting it in place and implementing it is challenging.”

Although Feldt studied chemistry in college, his interest in construction started when his parents built their family home in 1979. His initial interest never waned and he decided to work for a contractor after graduating from college. He learned carpentry and the design process, then practiced on his own by buying houses with his parents as investors, renovating them, and selling them. Now the company comprises seven people and includes a cabinet shop.

To identify where a system might be needed, Feldt holds weekly meetings at which the staff discuss potential problems and sticking points. “We ask if we can implement a companywide system to alleviate the problems.” The staff put together a list with potential systems that might work, and gradually, over a month of Monday morning meetings, they'll come up with a set of procedures. “By the end of the month we can have the system in place,” Feldt says. “[We don't implement] every system all at once, just things here and there for continual improvement.”

For example, two years ago he decided to put together a jobsite notebook. Feldt was the lead carpenter then, and he says that the specifics of each job were not readily available at each jobsite. Once Feldt hired a lead carpenter and he was no longer around to oversee everything, he implemented the notebook, which includes plans, schedules, specs, and estimates for labor and materials. There are also labor hours so the lead carpenter knows his costs and how many hours he has. “It's basically open-book for the lead and the client,” Feldt says. Using the notebook, the lead carpenter meets with Feldt on a weekly basis at the jobsite to review schedule, budget, and labor hours. The reports are filed in the notebook and left on site for the customer to see.

Implementing use of the jobsite notebook wasn't too difficult because everyone knew it would make communication easier. Because of the information in the book, the “staff has taken more ownership of the jobs,” Feldt says. “They're more likely to ask why a job notebook isn't complete than to ask ‘Why do we have to do this?'”

Stuart often looks to consultant Tim Faller for instruction on how to get buy-in as the company develops systems. He says he also has learned a lot from watching his parents, each of whom owned a business, as well as reading trade publications and working with other consultants. And, he says, “I believe that letting people know we value them [is important for buy-in].

“Soliciting input from employees to help identify areas of the company that require improvement and to get advice about how to structure new solutions is a sure way to get their buy-in,” he says. “And I've heard from [employees] that they like working here. We have full benefits, job bonuses for leads, companywide profit sharing, and we offer training.”

Most of the work the company does — everything from putting in crown molding to whole-house renovation — is done on a time-and-materials basis. At a recent meeting, the staff identified the current change order system as an issue. “Even though we do T and M,” says Feldt, “a change order is still a good idea to let the customer know how the process is going and to help them decide if they want to go ahead with the proposed change.” The company had a clunky system in which all of the information went back to the office. Now Feldt feels more comfortable having the field come up with an estimate that the client can sign, and then formalizing it in the office.

They are also focusing on lead tracking and the company's overall communications process. “Everyone has e-mail and a cell phone. All the leads have laptops,” he says.

Feldt's ultimate goal is to create an exit strategy so the business can run without him. “I'd like to spend more time with my wife and two children and go from 50 hours a week to 40 and on down to maybe 20 to 30 hours,” he says. “I also want to be able to take a long vacation and not feel like things are going sideways.”