Table of Contents March 2005

FEATURES

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  Handling the larger remodel job

  For any remodeler, going after that first big job is frightening and exciting. “As an entrepreneur you are seduced by a sense of possibility,” says Paul Winans, owner of Winans construction in Berkeley, Calif., and NARI president-elect. “When it comes walking toward you, you're scared and attracted...

   

• Purchasing a franchise

  Thinking about purchasing a franchise? There are questions to ask and answer and processes to follow to make finding “the one” all the more successful.

   
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  Surveying the cost of business

  Our 2004 survey offers a glimpse into the facts and figures of the industry.

   

Reader Panel

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  Survey of readers on franchises

  Though most remodelers do not own construction-related franchises, 33% of our respondents have considered purchasing one. Of the owners that purchased a franchise, 70% still own their original company and 67% manage both companies themselves. Those who invested in a franchise cite the desire to...

   

VIEW POINT

FIRST WORD

• Thinking about industry consolidation

  Maybe it's time to stop worrying about what the remodeling industry will look like when it finally consolidates and start thinking about what to do if it never does.

   

News + Notes

• Selling seniors on Home Depot

  A “strategic alliance” between The Home Depot, the world's largest home improvement retailer, and AARP, the lobbying powerhouse for Americans age 50 and over, kicked off in December with the first of several initiatives targeting AARP members: 4% discounts on The Home Depot gift cards.

   

• Franchising grows as business model

  Some six years after selling its first franchise, Case Handyman Services has expanded rapidly, with 66 partners nationwide. Now, its sister company, Case Design/Remodeling, a Bethesda, Md.–based firm that served the Washington, D.C. metropolitan area to the tune of $40 million in 2004, hopes to...

   

MARKET WATCH

• Figure This

   

• Stock market paces remodel market

  Every day, Tom Kelly takes a moment to log on to the New York Times Web site to see how the stock market did the previous day.

   
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  2004 a record year for home sales

  For the fourth consecutive year, sales of existing single-family homes have hit an all-time high.

   

COMMENTARY

GUEST COLUMNIST

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  Licensing is good for all

  What are the barriers to entering this industry? Not many, but some might say a pickup truck and a dog. Imagine going to a doctor who had a bag full of implements but no education or credentials.

   

LINDA CASE

• Disorder gets physician's attention

  The remodeling business is so full of different roles, different jobsites, and different crises that it gives even ardent multitaskers a challenge. It is an attractive business for those who are distractible, impulsive, and restless.

   

MARK RICHARDSON

• Making every meeting count

  Meetings serve three main purposes: communication, training, and motivation. As a leader, it's your job to make them great as “events,” not just as a vehicle to convey information. As the leader of your company, you are the master of ceremonies. You must ensure those who attend get their money's...

   

WALT STOEPPELWERTH

• Use of subcontractors on the rise

  In the past decade or so, almost all of the largest new home builders, and many mid-sized and small companies, have turned to subcontractors to assemble every part of the homes they build.

   

YOUR BUSINESS

Sales and Marketing

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  Brand your firm's strengths on Web site

  What aspects of your remodeling business put it in a class of its own? By “branding” them and featuring them prominently on your Web site — and then using other marketing tools to drive traffic there — you'll help your company shine in a competitive landscape increasingly characterized by Web sites...

   
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  Newspaper ad builds firm's profile

  The Artisans Group was down to its last $1,000 when co-owners Chris McDonald and Randy Foster bet the farm, so to speak, on a regular advertising spot in the local newspaper.

   
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  Tapping the active adult market

  Boasting fitness centers, open floor plans, and other amenities that appeal to affluent, socially active homeowners, age-restricted communities are proliferating in traditional Sunbelt retirement meccas as well as the Midwest, Northeast, and other regions where older consumers can be near their...

   

BOTTOM LINE

• Helping employees manage personal finances

  As part of their benefits package at Crane Builders, owner David Crane pays for a personal finance seminar for his employees. It helps them understand and plan their own finances, and it makes them more sensitive to the Nashville, Tenn.–based company's finances.

   

• Creating QuickBook estimating templates

  If you have built your own spreadsheet estimating template, then it's an easy matter to create a new worksheet specifically designed to be printed out for manual entry into QuickBooks. This new worksheet — name it “QuickBooks Summary” or something similar — will contain only the data you want to...

   

BY DESIGN

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  Shutters with a purpose

  Shutters have a great historical tradition. They were used for safety and to keep out bad weather. Today shutters have become a symbol of a quaint cottage or are used simply to dress up a house.

   

FIELD NOTES

• Lead carpenter needs documentation

  Complete documentation is essential for the success of the lead carpenter system.

   

• Temp agency boosts staff

  Remodeler Scott Chatel uses a temporary agency to provide carpenters during peak seasons. “It's a helpful way of being able to staff during peak times. It's good to bring someone on for a week and let them go — there is no long term commitment,” Chatel says.

   

• Recycling database updated

  The U.S. General Services Administration (GSA) recently updated its online Construction Waste Management Database to assist the building industry in reducing construction and demolition waste.

   

GOOD FORM

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  Form tracks time and materials items

   

Tech at Work

• Choosing your tech tool

  Thinking about some mobile technology for spring? Here's my short take on your choices.

   

• Tablet computer works

  Jeff Rainey forwarded pictures to his office and the plumber with a note saying he needed someone there right away. He did all this on a tablet PC. The plumber was on site within 30 minutes.

   

Ways + Means

• Communication within the business

  There are really two sides to communication: First is the interpersonal side of communication, which includes active listening, body language, and eye contact. We discussed those last month. The other side of communication is the system created within the company to facilitate the effective flow of...

   

• Guarding against supply price rises

  Most modern contracts account for at least some known and unknown risks such as force majeure events (e.g., unusually severe weather, labor strikes) and differing conditions on the project site. But one risk not often addressed is price fluctuations for labor, materials, and equipment.

   

• Tracking competitor's bids

  Nobody likes bidding for jobs, but one northern New Jersey remodeler who prefers to remain anonymous has a method that helps him maintain some control. For the past five years he's kept a log of competitors' bids.

   

• Get organized to retrieve things quickly

  Anyone can clean up their office,” says Anne McGurty of Strategize and Organize in Denver, “but the key to getting organized is having a process to retrieve things quickly.”

   

• Seeking discounts from manufacturers

  There are more than 800,000 remodeling businesses in the United States; nearly 50,000 do over $1 million in yearly sales. But it's a market that manufacturers often miss. So you may have to go to the mountain to get discounts.

   

BIG50

CLOSE UP

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  Profile of Jake Schloegel of Schloegel Design-Remodel

  The bulging online blogosphere is stuffed with political blogs and gossip blogs, academic blogs and travel blogs. But remodeling blogs?

   

FACE OFF

• Meeting with the client

  I prefer to have the first meeting with clients in their home. I want them to be in their environment so I can get to know them and their house. The feeling I want to convey is that I understand them, their home, and their needs.

   

SECOND LOOK

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  Interview with Tony Collins of Custom Design Works

  Collins' average project increased from $25,000 in 1994 to between $75,000 and $100,000 today. He now charges for $1 per square foot for the design on these large projects.

   

SOLUTIONS

• New employee trial periods

  We have a 30-day, “see if there is a fit” period. During that month, both the company and the employee take the time to make sure expectations are being met.

   

KITCHEN AND BATH

DESIGN CLINIC

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  Designing kitchens in small spaces

  When it comes to Manhattan apartments, the city's famous high style is often crammed into a small space. Jacob Kindler's designs of tiny Manhattan apartment kitchens are more complicated due to the fact that he prefers to use full-sized appliances.

   

SPEC BOOK

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  New range ventilation products

  A gleaming, stainless steel range hood can be a stunning centerpiece in a luxury kitchen. High-end ventilation hoods account for 40% of total revenue in the hood industry, according to numbers from Zephyr Ventilation. Companies are showcasing hoods with sought-after design and high-tech features.

   

Management

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  Adding appliance sales as profit center

  Callier & Thompson Kitchens Baths and Appliances has always sold appliances with their kitchen designs. But when owners Gary Callier, Thompson Price, and David Callier wanted to increase revenue, they analyzed this division and found it lacking.

   

PRODUCTS

IN FOCUS

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  New door hardware products

   
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  New HVAC products

  Three new models have been added to the

   
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  New door products

  The Craftsman style is the look of the moment in doors. More than just a trend, the clean lines and solid elegance of the Arts and Crafts era make it a versatile style, just as at home in rustic suburban settings as it is in the city. And the style is a perfect opportunity for fiberglass door...

   

TRENDS

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  Recycled furniture

  Builders and remodelers have been environmentally conscious for years now, mostly with energy-saving exterior building products or more efficient appliances.

   
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  Taking storage to another level

  Organization gurus promise that getting rid of clutter is the secret to a happier, healthier life. They're selling books on Oprah and cleaning out guest rooms on The Learning Channel's Clean Sweep.

   
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  Growth of green roofing systems

  Seen mostly in commercial applications now, “green” roofing systems have the potential to revolutionize residential roofing. Cities like Seattle and Chicago are starting to specify the systems, which create rooftop vegetation, on city-and government-owned buildings.

   

LAST WORD

Bench Mark

• Slippage in the permit process

  All remodelers are robbery victims. The thief is slippage, which is the amount your profit falls short of plan. The root causes of slippage are often simple — but that doesn't mean they're easy to find. And while some sources, like inconsistent labor productivity or poor change order management...