Table of Contents November 2004

FEATURES

• 

  The Business of Design/Build

  In June, six design/build remodelers got together to talk about the business. Eavesdrop on their conversation.

   

• How to make husband-and-wife remodeling businesses work

  So what if you can't recite your vows after all these years. You remember the gist. “For better or worse. In sickness and in health. In accounts payable and receivable.” Wait. What was that last one? Doesn't sound familiar? Well, if you and your spouse share ownership and management of your company...

   

• 2004 Cost vs. Value Report

  This is the eighteenth anniversary of our Cost vs. Value Report, which compares the cost-to-construct for a selection of 18 common remodeling projects with the added value those projects bring at resale. Read on to learn about the current resale conditions in 60 markets.

   

Cost vs. Value Report

• Roof Replacement

  Project Description: Remove existing roofing to bare wood and dispose of properly. Install 30 squares of fiberglass asphalt shingles with new felt underlayment, galvanized drip edge, and mill-finish aluminum flashing. Average percentage of cost recouped for this project is 80.8%. Read on to find...

   

• Attic Bedroom

  Project Description: In a house with two or three bedrooms, convert unfinished space in attic to a 15-by-15-foot bedroom and a 5-by-7-foot shower bath. Add a 15-foot shed dormer and four new windows. Insulate and finish ceiling and walls. Carpet unfinished floor. Extend existing heating and central...

   

VIEW POINT

FIRST WORD

• 

  Extraordinary circumstances make insurance restoration a true specialty.

  Imagine every one of your jobs has two clients, and that the last thing they planned on doing together is a remodeling project. Imagine also that they can't agree on the scope of work, the budget, or the schedule, and that at your initial meeting, one client is always in a state of extreme...

   

News + Notes

• Bad Air?

  Jordan and his wife, Juanita, allege that the moisture caused some $2.6 million worth of damage due to rot and mold.

   
• 

  Can-Do Attitudes

  For the two weeks leading up to Thanksgiving, the Broadway stage and the Met will have to share the Big Apple spotlight with … sculptures made out of canned food.

   

• OSHA Can You See

  Home builders in Arkansas are scrambling after getting word that OSHA will be conducting random inspections at residential construction sites in the coming months.

   

• Insurance By Association

  The nation's small businesses serve as the engine of our nation's economic growth,” says Michael Strauss, director of legislative communications at the NAHB. “But spiraling health care costs have hit small-business owners disproportionately hard.”

   

COMMENTARY

GUEST COLUMNIST

• 

  Small business owners can learn from big businesses

  Recently, I talked with a friend and fellow remodeling company owner. He was furious that another, much larger remodeling company had, in his mind, tried to poach one of his longtime employees. I don't know if the employee was approached or that employee approached Big Remodeler Inc. In the scheme...

   

LINDA CASE

• 

  The true value of life is measured by what you give

  It is a time to reflect on what we have — and for most of us, it is bountiful. I've been gathering stories of remodelers and how they share their bounty by supporting their communities. I am amazed by the frequency and the diversity. Many remodelers work with an existing charity like Habitat for...

   

MARK RICHARDSON

• 

  Juggling Act

  Next time you're at the circus or a county fair, watch the jugglers. The juggling usually starts with just one object rhythmically bobbing up and down. Soon the jugglers add a second, then a third, and sometimes a fourth or more. How do they do it? How can they pay attention to four or five balls...

   

WALT STOEPPELWERTH

• Training is one section in a long path toward solving the labor problem.

  In the old days, specific training was almost nonexistent. The production manager would check the jobsite every day or so. Usually there were two carpenters and one or two helpers. Granted, products were simpler to install and less expensive. And companies didn't subcontract much beyond electric...

   

YOUR BUSINESS

Sales and Marketing

• 

  House of Cards

  A card deck service that targets owners of homes valued at more than $500,000 has returned solid leads for Washington, D.C.–area remodelers.

   

• Have a Nice Trip

  Looking for a way to close sales or spur salespeople on to closing more business? Consider MVI Marketing's “Mini Vacations”

   

• The Craft of Cross-cultural Sales

  Working with diverse cultures requires understanding how individuals in those cultures make decisions. If you don't, you risk losing business and turning off prospects. Here's how I've worked with people of diverse cultures.

   
• 

  Add One Cube, Stir Architects

  Architects are intrigued by origami. And by high-profile architects. Contractor David Adams discovered that with a unique marketing gimmick that has roots in the sixth-century Asian art of paper folding. It helps that the gimmick also depicts the work of some renowned architects, among them New...

   

BOTTOM LINE

• Overtime Regulations

  The Fair Labor Standards Act (FLSA) requires overtime pay at time and one-half the regular rate of pay for all hours worked over 40 hours in a workweek.

   

• Employees at The Farrell Co. have a big incentive to stay put.

  Steve Farrell, president of The Farrell Co., Los Altos, Calif., pays his field crew a lower-than-average base salary, and they like it. That's because he then hands out yearly bonuses — big ones. Last year he distributed one that more than doubled one employee's salary.

   

BY DESIGN

• Color Shift

  When thinking about color, it's essential to understand that colors shift: Depending on what base colors are contained in a particular paint color, that color may look lighter or darker or more or less vibrant when viewed alongside other colors.

   

• Color Primer, Part 2

  Choosing the right colors for a space can be a complicated process. Ultimately, the needs of the space and preferences of the client, not a canned formula, will lead to the best solution. Still, there are a few facts and rough guidelines that can help in the selection process.

   

FIELD NOTES

• Involve Lead Carpenters in Hiring Process

  Upper-level field staff should be included in the hiring process for a new employee who will become part of their team. Most lead carpenters are not familiar with hiring. Here are a few tips to help them evaluate potential employees during an interview.

   

• Florida Home Builders Association Launches Construction Education Program

  The Florida Home Builders Association (FHBA) recently launched the National Future Builders of America (FBA) construction education program. “Through the FBA program, we can identify students interested in construction and provide them leadership and training skills necessary to help ensure the...

   
• 

  Trash Truck Replaces Dumpster

  Three years ago, the city of Kensington, Md., stopped allowing Dumpsters on streets. In nearby Rockville, a $1,500 bond for Dumpsters on the street is now required. Contractors must also submit a plan to the city review committee to explain traffic flow around the receptacle.

   

GOOD FORM

• 

  Job File Archive Checklist

  As anyone who has ever been audited by the IRS can tell you, it's important to keep a paper trail. Then again, as anyone who has ever had a home office can tell you, keeping too much stuff is no good either. The middle ground is ideal.

   

Tech at Work

• Protect Your Business and Your Clients From Electronic Predators

  Internet advertisers want to bombard you with pop-up ads. Hackers might need to “borrow” your computer to mount an attack on another server. Or they might be “phishing” for credit card numbers. Or not. A good percentage of Internet mischief is nothing more than kids somewhere testing their...

   

• Match CAD to the Job

  Spending a little more on niche-specific CAD is often money well spent.

   

Ways + Means

• By Law: Understanding Financing

  Very often, the ability to offer financing options to your customers is a significant factor in closing the sale. In part one of this series (September 2004), we reviewed open-end credit and direct closed-end credit. Here, we examine perhaps the most common form of financing a home remodeling sale:...

   

• Charting a Course

  Ken Kumph, owner of Premier Builders, was disturbed by the subjectivity in his company's yearly employee review process. “We'd sit down and talk using boiler plate questions,” he says, which would “prompt discussion about things like reliability and quality. And [employees would] get a raise based...

   

• Raising the Customer Service Bar

  The good news is there are a thousand options. The bad news is there are a thousand options,” is what Tricia Sinn tells her clients in regard to product selection. That bit of news, from the customers' perspective, might be enough to send them over the edge. Luckily, for Sinn Construction and...

   

BIG50

CLOSE UP

• 

  Profile: Carl Hyman

  Alure Home Improvements of Hicksville, N.Y., attributes its growth from a sales volume of $18 million in 2002 to $27 million in 2004 to Partner Points, a program that promotes repeat and referral business. About 12 years ago, president Carl Hyman (Big50 1993) began promoting profitable referral and...

   

FACE OFF

• Face Off: Should customers pay for change orders up front?

  Paying up front makes customers absolutely certain they want the change. If they change their mind, and any fees apply, they still pay. This also guarantees they can afford the upgrade, and we don't have to chase after the money once the change has been made.

   

SECOND LOOK

• 

  Second Look: Candi and Troy Hilton

  This past spring, Stilwell, Kan., remodelers Candi and Troy Hilton (Big50 2003) started planning for the future. Avid sailers and more comfortable in warmer climes, they decided that in 15 years they'd shut down their business and retire. By the end of the summer, they were living in Florida...

   

SOLUTIONS

• How to encourage and incorporate staff-initiated policies

  We have certain standard jobsite procedures, but we encourage our staff to find better and timesaving ways. Once they determine a better solution, we examine it and get input from all our staff to see if they agree. In some cases, they'll even improve upon the original idea. We then implement the...

   

KITCHEN AND BATH

SPEC BOOK

• 

  Bathroom Lighting

  Take a look at this isses' bathroom lighting products from Schonbek, Rejuvenation, UltraLights, etc.

   

Management

• Color palette for 2005

  Industry experts at the Color Marketing Group have selected the color palette for homes in 2005 — colors that “convey a respectful, serious nature, yet touch the soul.” CMG's color professionals noted that the “spa” experience adds a spiritual nature to color and refreshes, rejuvenates, and...

   
• 

  Kitchen and Bath Market

  Kitchen remodeling is expected to increase by 9.8% in 2004, to a total of $10.57 billion. High-end kitchen remodeling (more than $15,000) will drop slightly to 118,796 jobs, but spending on those jobs will increase to $4.09 billion.

   
• 

  Dual Heat

  Remodeler Byron Ledworowski installed a combination radiator/towel warmer to bring heat and comfort to a client's kitchen. The owner of Li'L American Builders, Middleton, Wis., was originally going to use radiant floor heat, but the floor construction would have made it a complicated task. His HVAC...

   

• Closing the sale and asking for referrals are the last steps of the selling cycle

  We've covered prospecting, the initial contact, qualifying the client, the presentation, and meeting objections and concern. The final two steps of the seven-step selling cycle are closing the sale and referrals.

   

REPLACEMENT

DECKS

• 

  Pre-Fab Deck Railings

  In the past decade, a wide variety of residential deck railing systems have entered the market, replacing site-made wood components with PVC, polyurethane, stainless steel, aluminum, cable, and glass. Nearly all of the makers of composite decking, including CertainTeed, CorrectDeck...

   

SIDING

• Set Goals, Be Accountable

  (1) How much is your average contract? (2) How many selling days are there in the month? How many of those days will you be working? (3) What's your closing ratio? How many folks do you need to see to sell a job? (4) How many prospects can you see in a day? A week?

   
• 

  This Old Vinyl

  Old vinyl or aluminum exteriors aren't like wood-based cladding, which can be completely restored with some energetic scraping or conscientious paint stripping, followed by a top-notch paint job.

   

PRODUCTS

IN FOCUS

• 

  In Focus: Gypsum, Underlayment, and Backerboard

  A selection of wall panel products.

   
• 

  In Focus: Rough Hardware

   
• 

  In Focus: Reciprocating Saw; Miter Saw, and other Power Tools

   

ON THE JOB

• 

  Subtle Soffit Vents

  We pay as much attention to the quality of our exterior trim as we do the interior trim on the upscale houses we build, so we don't want to see ugly strip vents or round metal button vents messing up the soffits. Instead, we've come up with a nice-looking detail that provides plenty of roof...

   

READERS CHOICE

• 

  Reader's Choice: Dutchlac Paint

  Stephen Ortado of Historic Structures specializes in restoration projects, so he's not looking for quick and easy when it comes to products. Case in point: He uses a paint that most contractors wouldn't touch. He first discovered Dutchlac Paints in a wooden boat magazine 12 years ago when he was a...

   

• Reader's Choice: My Design Build Project

  Being able to offer clients something your competitors can't is a real coup. That's part of what made Todd Jackson take notice when he first heard about My Design Build Project. MBDP is a Web-based service that allows a remodeler to provide individual Web sites for their clients, giving them access...

   

TRENDS

• 

  Porpane Saves Energy and Money

  Could propane be the saving grace for homeowners who want to save energy and money? “Heating water is about 20% [of a home's] annual energy cost. Switching to propane or gas can save homeowners money,” says Jim Hitzemann, chairman of the Propane Education & Research Council's Homebuilder...

   
• 

  Structural Insulated Panels (SIP) Gaining Popularity

  The race toward the energy-efficient home is on, and it looks like SIPs are gaining ground. Structural insulated panels consist of an expanded polystyrene core sandwiched between two OSB panels. According to a survey conducted by the Structural Insulated Panel Association (SIPA), 12,000 mostly...

   
• 

  First-Class Fiberglass Doors

  When it comes to remodeling an entryway, it's unlikely that a homeowner will want to replace an old wood door with a new wood door. According to research conducted by Therma-Tru, wood doors are replaced by steel or fiberglass doors 58% of the time. Of those who chose a fiberglass replacement, 62%...

   

LAST WORD

Bench Mark

• A good estimator is methodical but creative

  Sound estimating is the backbone of any remodeling business, whether you bid competitively or negotiate a design/build contract. We spend a lot of time benchmarking financial standards and processes; estimating deserves equal attention.