Table of Contents January 2002

FEATURES

• Financing a key component of the sale

  For San Antonio remodeler Mike High of Casa Linda Remodeling, financing is "part of the sales equation."

   

• Hiring good sales staff

  As Dave Brady pondered his company's need for a full-time salesperson besides himself, an ex-employee named Steve Gruszka walked in the door. When he closed his company and contacted his old employer, Brady immediately saw the potential for his first salesperson.

   

• Implementing sales systems

  She had read books by Tom Hopkins and Phil Rea (a contributor to this magazine) and had incorporated some sales techniques, but she sought formal training. On the recommendation of a fellow remodeler, Shirey spent $8,000 on weekly sales training through Sandler Systems, based in Stevenson, Md...

   

Before and After

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  Returning a neglected Mediterranean-style home to its former splendor

  After a year's worth of planning, McDaniel proposed renovating the three-bedroom, 3,700-square-foot building into a fully landscaped 10,000-square-foot compound that would include the house, restored as much as possible to its original condition, with an addition atop a porte cochere (a roofed...

   

Reader Panel

• Paying to win sales

  A few spend all their work time selling, while many more combine selling with estimating, designing, and production management. Compensation schemes vary, too -- salary, commission, staged commissions, salary plus profit sharing, among others. Another pays an extra 4% on total job revenue.

   

VIEW POINT

News + Notes

• Directory highlights environmentally friendly products

  BuildingGreen of Battleboro, Vt., has released the second edition of its GreenSpecDirectory, a guide to more than 1,500 environmentally friendly building products. "Our tactic was to identify quantifiable, easily verifiable standards where those could be defined," executive editor Alex Wilson says...

   

• Business sale goes awry

  LeRoy Kay sold his 30-year-old construction business, Roy Kay Inc. of Freehold, N.J., to New York-based utility firm KeySpan in February of 2000. Newsday reported last August that court papers submitted by the Kays claim KeySpan misled them by not disclosing that SEC regulations would prohibit them...

   

• The Certified Remodeling Carpenter Program

  NARI is offering a new certification -- the Certified Remodeling Carpenter (CRC) Program -- intended for students and new remodeling pros.

   

• EIFS award punishes builder

  Last July, a Fairfax County, Va., jury awarded over $1 million to plaintiff Brian Stafford for damage to his home caused by EIFS (Exterior Insulated Finish System), also known as synthetic stucco. The manufacturer of the EIFS used, Parex, settled with Stafford before the trial. Manufacturers have...

   

• New Seal Signifies Product Compliance

  ICBO Evaluation Service has introduced its ES Mark, a seal that signifies a product's compliance with major U.S. building codes.ICBO ES grants manufacturers the right to put the seal on a product after the organization has evaluated it and documented its compliance in an ES Report. The reports are...

   

• Organizing day laborers

  Community groups representing the interests of the approximately two million immigrant day laborers across the United States held their first national conference last July in Los Angeles, taking a significant step toward organizing a national advocacy voice for this oft-exploited class of...

   

MARKET WATCH

• Better year ahead in 2002

  Most past recessions resulted from sharp increases in inflation and a tight monetary policy leading to sharply higher interest rates. This recession has been caused by a sharp downturn in business investment, especially in the manufacturing and technology sectors.

   

• Existing Home Sales Up

  Existing home sales rebounded in October, up 5.5% to 5.17 million units from 4.90 million units after the September terrorist attacks. While the recovery is partly due to sales postponed from September, the gains also reflect strong demand and favorable affordability conditions. For more...

   

COMMENTARY

GUEST COLUMNIST

• Ingredients for a successful partnership

  In my experience, most remodeling partnerships do not succeed. As business owners, they not only have to complete the job on time and on budget but they have to worry about collecting payment, paying vendors and subs, finding the next project, and so on.This diversity gives the business a broader...

   

LINDA CASE

• Why training is worth it

  This is what business teachers mean when they talk about "Vitamin P," that is, the power of praise in a business environment, said to be five times more effective than criticism in training employees.Advantage Inc. in Fulton, Md., a company providing business solutions through a network of experts...

   

WALT STOEPPELWERTH

• Be ready for change orders

  There was a time when change orders represented a large part of a company's profit on a project. It's also easy for them to conclude that the price is too high and that the project must also be overpriced. Failure to write up the change order, get signatures, and collect promptly can also be...

   

YOUR BUSINESS

Sales and Marketing

• Marketing with postcards

  Would potential clients identify more with verbal repartee between husband and wife leading to a remodel rather than a beautiful photo of a completed job?

   

• Setting the Marketing Budget

  The REMODELING Benchmark for marketing expenditures is 3% of annual revenues, less for large companies, more for specialty remodelers.

   

• Ideas to boost referrals

  Relying almost 100% on referrals, both Stephen K. Hann of Stephen K. Hann Custom Builders in Houston and Leo Martineau of LCM Remodeling Co. in Merrimack, N.H., know how to keep clients happy, from start to finish to follow-up: Create a detailed spec sheet.

   

• Delivering on Marketing Goals

  Colette Gandelot of Vujovich Design-Build gets a lot of mileage out of her $30,000 annual marketing budget. Members of the field staff are the most important part of Gandelot's programs.

   

• RMI sends mixed signals

  According to the quarterly Remodeling Market Index (RMI), the September terrorist attacks had an immediate effect on the business outlook.

   

BOTTOM LINE

• Knowing your firm's critical numbers

  BOWA Builders began using a system the company calls "critical numbers."

   

• IRS expands home office deduction

  The IRS keeps expanding the home office deduction. The space must be used regularly and exclusively for a business purpose, but you can take the deduction even if you commute to an outside place of business every day.

   

• Financial resolutions for the New Year

  A list of New Year's resolutions that will help you improve your bottom line.

   

BY DESIGN

• Designing solutions

  A basic understanding of design can go a long way toward providing solutions.

   

FIELD NOTES

• Using signs on the job site

  When a trim carpenter on one of PSG Construction's sites punctured a water line, employees wasted precious minutes searching for the water shut off valve. Now the Winter Park, Fla.-based company uses bright, simple signs to help employees and subs identify the locations of important equipment and...

   

• Managing supplies for the job

  Here are some tips on managing for maximum dollar value:Runs to the lumberyard cost more than conservative ordering saves.Incorrect deliveries translate into lost labor time and delays.

   

Tech at Work

• Building a better computer mouse

  An optical mouse replaces the ball and rollers of a conventional mouse with a camera chip. As the camera passes over any flat surface, it takes tiny photographs at the rate of 1,500 frames per second.

   

• Sharing knowledge with intranet

  Matt Plaskoff stole an idea from his brother, who helps Eli Lilly chemists share expertise via multinational Web sites, and brought it to the jobsite for his 25 employees.

   

• Group tests and shares technology solutions

  Intent on lowering the "opportunity costs" of high tech, 15 remodelers and five associated businesses have formed a group to explore and share the technology that makes their businesses more profitable.

   

Ways + Means

• Supporting military personnel

  Regis and Helene McQuaide, owners of Regis McQuaide and Co. in Pittsburgh, were a little taken aback last September when lead carpenter David Leister left for a weekend's service in the Army Reserve, only to call saying he wouldn't be returning to work for a while.

   

• Refining a position before hiring

  Dan Bawden, owner of Legal Eagle Contractors in Houston, wasn't surprised when his office manager quit the day the 1099s were due. As months passed without a new office manager, Bawden began spending less time with his normal sales and marketing duties and more time at the office "playing...

   

• Know your insurance policy

  General liability insurance covers bodily injury, property damage, personal injury, and advertising injury arising out of your operations, products, and premises. I can't tell you how often a client of mine hasn't read his insurance policy," Dallas construction attorney John Sloan says. "If you can...

   

• Bad experience convinces remodeler to change contract

  Several years ago, Ron Dimon of Dimon Construction in Manlius, N.Y., built an addition for a client whose harassment, threats, and needling demoralized his staff and delayed completion of the project. "Once it started, it kind of snowballed," Dimon recalls, with the client holding back all funds...

   

BIG50

CLOSE UP

• Profile of Patty McDaniel of Boardwalk Builders

  Patty McDaniel (Big50 1998) has a very simple marketing theme: Never let up.

   

FACE OFF

• Itemizing job costs

  Several years ago, I gave a complete breakdown of everything that went into our pricing with every proposal. But it became a little laborious, and it seemed I was providing more information than my clients really needed or wanted.

   

Live + Learn

• Owning the complaint

  The Ritz-Carlton Hotel Co. was founded on principles of superlative service.

   

SECOND LOOK

• Interview with Peter Feinmann of Feinmann Remodeling

  In the recession of the early '90s, Arlington, Mass., remodeler Peter Feinmann (Big 50 1992) made all the right moves and set Feinmann Remodeling up for the tenfold growth it's enjoyed since he was named to the Remodeling Big 50."

   

SOLUTIONS

• Discouraging change orders

  How do you discourage change orders?

   

KITCHEN AND BATH

DESIGN CLINIC

• Challenge in selling pre-designed bathrooms

  The primary challenge in selling pre-designed bathrooms is client perception that they are getting something less -- not custom or special -- and therefore should receive a substantial cost savings.

   

• Layered kitchen lighting

  Lighting designers are appalled at the use of the standard glaring center fluorescent light in kitchens. "A center light does not offer enough flexibility," says Shirley Purcell of Isthmus Lighting, Madison, Wis. She prefers "layering" lighting using recessed cans, under-cabinet lights, and accent...

   

SPEC BOOK

• New surfacing products

  Goldmine and Coppermine solid surfacing feature varying sizes of natural metal, giving the surface gold or copper sparkles. The Transcendence collection combines solid surface sinks with designer bath furniture, including Terrafina, Shaker-style Metro, and Victorian-inspired Chantille.

   

Management

• Selecting smart and skilled craft workers

  On high-end kitchen and bath jobs, remodelers have to work with demanding clients and one-of-a-kind materials and designs. And that means remodelers must look beyond the rudimentary license and insurance checks.

   

REPLACEMENT

ROOFING

• Knocking on doors still works

  In my opinion, the quickest, least expensive lead any salesperson could hope for is the "knuckle" lead -- knocking on doors.

   

• Choices of roofing

  Putting an addition on a house roofed with clay tiles imposes the choice of either re-roofing the entire building in asphalt or using clay tiles on the addition to match.

   

Windows

• Making window replacements easier

  Whether you're putting in the windows on your own job or subcontracting the work out, it's important to make the whole process painless for the crew coming in to install.

   

PRODUCTS

IN FOCUS

• Interior trim products

   

• New garage door products

   

• New software products

  Many of the estimating programs today can be integrated with other software operations, such as QuickBooks and project management programs. VectorWorks Architect CAD software integrates all project information into one file so that all views are updated when a change is made, reducing risk of...

   

READERS CHOICE

• Readers select favorite products

  Camera ReadyFrom estimating jobs to e-mailing clients with up-to-date project photos, "the camera is in such demand that we've needed to create a scheduling calendar to reserve it for use," says Dennis Gehman. Remodeler: Dennis D. Gehman, CR, CLCCompany: Gehman Custom Builder, Harleysville...

   

TRENDS

• Preferred Status

  This is part of the strength behind Owens Corning's Preferred Contractor program, where participants are backed by familiar Pink Panther-branded products. Owens Corning's program is one of the most thorough in the industry, offering contractors access to extensive sales and marketing materials...

   

• Upgrading with home automation products

  With more focus being placed on home automation, pressure is building on remodelers to stay up on the game.

   

LAST WORD

Bench Mark

• Gross profit benchmark

  More than three years ago, REMODELING set the benchmark for produced gross profit margin (GP) at 40% (November 1998). A look at current remodeling baseline numbers indicates that a more representative GP is 35%.Baseline companies with annual sales under $250,000 average a respectable 28% GP. Size...