Table of Contents March 2003

FEATURES

• Start planning your exit strategy for succession

  Gauthier holds control through V (voting) shares, while two employees, Bryan Beauchemin and Steve Podlich, hold N (non-voting) shares. His target of six potential partners is arbitrary, and his vice president, Beauchemin, will exert influence in hiring strong new employees so Gauthier has partners...

   

• Mold may be biggest issue facing remodeling industry: mold is more troublesome than other hazards

  Mold may be the biggest issue facing the remodeling industry. Five years ago, when Brothers Strong, in Houston, came across household mold in the course of a project, "you didn't even talk about it," recalls company owner Michael Strong. And panicky homeowners facing $35,000 or more in...

   

• Blueprint for meeting profit goals

  Paul Winans of Winans Construction, Oakland, Calif., agreed to reveal the methods he employs to produce high margins. A full 17 of the 20 jobs he does each year produce the high gross and net margins he considers vital to his success.To demonstrate how it all comes together, Winans agreed to...

   

Before and After

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  Basement library addition for the overflow of books

  Two major remodeling jobs on a modernist house in sunny California elevate practical storage spaces to works of art.

   

Reader Panel

• Plan ahead for retirement: make succession planning a priority

  Without an exit strategy, remodelers may find retiring as difficult as staying in business. Remodeler Robbie Robinson is learning that if you expect your business to help pay for your retirement, you'd better plan ahead. Before deciding to pass it on, Robinson had planned to close down the company.

   

VIEW POINT

FIRST WORD

• Key Communication Issues for Remodelers

  How can Ikea communicate flawlessly with strangers over great physical and cultural distance while we remodelers have trouble making ourselves clear in our native tongue to subs, employees, and customers we work with every day?

   

News + Notes

• Dogs trained to find mold

  Properly trained, a dog can find anything, including mold. The MoldDog division of Whitstine's academy has trained 16 dogs that work in states from Oregon to Florida.

   

• Proposal resolving lumber trade dispute between U.S. and Canada

  A Commerce Department proposal for resolving the lumber trade dispute between the United States and Canada has brought the sides closer, but doubts remain about the likelihood of an agreement. The proposal calls for the United States to reduce duties on Canadian lumber as Canada gradually...

   

• McNulty joins Chicago Southland Chamber of Commerce

  Only two and a half years after joining the association, COO and executive vice president Kevin McNulty has left NARI to join the Chicago Southland Chamber of Commerce. National officers hope to select a new executive this month.

   

• Trade Secret for a WD-40 Tool Belt

  WD-40 is giving away 100 limited-edition tool belts. Each of 100 winners gets a toolbelt and his photo displayed on the Web site next to his winning secret.

   

• Green Remodeling Program Launches In Atlanta

  Green building may not have caught on yet with remodelers, but the creators of Atlanta's EarthCraftHouse program hope to give the movement a push. "The results from our pilot projects have been much better than we expected," Hackler says.

   

MARKET WATCH

• Market Changes

  Remodeling market index Both components of NAHB's Remodeling Market Index fell at the end of 2002. The future expectations portion of the Index experienced an even larger decrease, from 42.8 to 39.1. Financing remodeling projects is as attractive as ever, with second mortgage interest rates at...

   

COMMENTARY

GUEST COLUMNIST

• Working through the spanish-speaking language barrier

  Five years ago, my company, Waller Construction, bought a roofing operation and set it up as an in-house division. At the time, almost all the roofing installers were Hispanic, and they spoke only Spanish.

   

LINDA CASE

• Disney strives from first-rate Service

  Obviously there's nothing Mickey Mouse about Disney Enterprises, and in fact, there's a lot for remodeling business owners to learn in the systematic way Disney "wows" the families who visit its world-class theme parks. When Walt Disney first discussed the development of a theme park with his wife...

   

MARK RICHARDSON

• Common misconceptions of remodeling that indicate hidden problems

  Here are five false positives about the remodeling business -- statements that sound good but may indicate hidden problems.More than likely, you were relying on referrals --taking orders, not marketing or selling your business.

   

WALT STOEPPELWERTH

• Ensure Customer Satisfaction with Communication

  Demonstrate all products such as appliances, locks, thermostats, and more, that require customer use. One of the best guarantees of a smooth-running project is an on-site communication center, a place where customers and lead carpenters can leave or exchange messages.

   

YOUR BUSINESS

Sales and Marketing

• Deconstruction and reuse: homeowner tax deductions

  After seeing a client in tears beside a Dumpster during a gut remodel, mourning the loss of old windows and teak moldings, remodeler Ray Gauthier figured there had to be a better way. REX now provides services for Gauthier's competitors, and it's also working with the county to show how almost an...

   
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  15 Biggest Remodeling Mistakes...and How to Avoid Them

  Establish communication with the client before the project starts and force them to deal with the real issues. Although Mencavage hired an editor to write the booklet for $550, she met with 10 past clients over coffee or lunch to develop the list of mistakes.

   

• "The Works" : provides home-needs inventory and serves them

  For an average cost of $450 (it could be more, based on the house's square footage), a homeowner receives a "home physical," then a repair schedule, followed by a maintenance program.Customers can opt for one of four maintenance levels: what's required; recommended; optional; or done with the...

   

• A rubber duckie with a twist

  The answer's plenty, if you ask DreamMaker Bath & Kitchen by Worldwide, of Waco, Texas. "We try to keep our offering fresh," says Amy Brown, marketing director.

   

BOTTOM LINE

• Invoicing some expenses as direct costs for overhead

  How can they charge less and still make money?They can't, but they make up the difference by invoicing as direct costs some expenses that would be considered overhead on a fixed-price job. A complete list of reimbursable expenses for cost-plus work is included in AIA documents A111 & A114 ($8 each...

   

• Strategies to keep cash flowing

  Few remodelers take the trouble to align client payments with their own need to pay suppliers and subs within a week to 10 days. Payments are updated on a schedule of values that includes an early-pay line item for general conditions.

   

BY DESIGN

• Architectural elements to dress up the secondary entry

  Houses usually have a formal entrance, but most families inevitably use a secondary entry -- often near the garage or driveway.That entry usually leads to the kitchen or mudroom and is also used by friends and casual visitors. Though he did not have space to add a closet, Gleason lined the lower...

   

FIELD NOTES

• How much a lead must produce to reach profit goals

  Last month we calculated that the three leads at our hypothetical company need to produce $40,000 each per month to meet our yearly projected sales volume of $1.5 million. To decide, you need to find out how much a lead must produce per month to reach your profit goals.To do this, we need to know...

   

• Introduce kids to the field of carpentry and remodeling

  Stephen Howell of Howell Design & Build, North Andover, Mass., found a great carpenter's helper through one of his customers. The client's son was interested in the construction field, and Howell agreed to have the teen work for him over the summer.

   

GOOD FORM

• Questions to measure applicant's realistic potential for job

  About a year ago, Jim Sasko, president of Teakwood Builders, found that he was spending too much time interviewing job candidates who simply wouldn't fit in with his company. If an applicant responds incorrectly, Sasko knows that he is probably lying about any prior experience he claims to have had.

   

Tech at Work

• Using Outlook to prevent costly change order mix ups

  Arnold Thompson, president of The Bottom Line Construction in Delray Beach, Fla., uses Microsoft Outlook to prevent costly mix ups. "Often the money's not a big deal," Thompson says, "but people want to know they're not getting shafted."

   

• uReach.com's unified messaging system for missed messages

  If you're missing messages, you may want to try uReach.com's unified messaging system.

   

Ways + Means

• "Bit-sized" design process

  The thought of a remodeling project often overwhelms clients, especially first-timers. So three years ago, Alpha Remodeling, a design/build company in Ann Arbor, Mich., broke its design process down into "bite-sized" pieces.

   

• Gift Basket with Survey

  Many companies survey clients at the end of a project, but Stephen Howell of Howell Design & Build, North Andover, Mass., takes follow-through to another level.

   

• Fax Machines in Employee Homes

  In January, a new carpenter at Four Corners Construction, Westborogh, Mass., completed his 90-day probation period and received, at company expense, his fax machine. Four Corners Construction gives key employees a plain-paper fax to install in their homes.

   

• Daily cleaning makes both the remodeler and customer comfortable

  On large jobs, the crew arrives a day early to set up plastic walls, cover hardwood floors and carpets, and spread dropcloths. Forde points out that daily cleaning makes end-of-the-job cleanup a snap.

   

BIG50

CLOSE UP

• Michael McCutcheon and Jordan Lourie

  Trying to meld the values and practices of two growing companies can make for a doubly difficult task. McCutcheon took on Lourie's $2 million book of business, adding to his own $5.7 million.

   

FACE OFF

• Punch list at the end of the job

  Our goal, from the start of the job, is to not have any punch items by the time we reach the final walkthrough. We've even had owners try to convince us to call it a Zero Punch, even when there were some punch items left!

   

SECOND LOOK

• William S. Connor

  Window restoration and commercial services joined the firm's handyman, design/build, and construction divisions. The fledgling window restoration division brought in $300,000.

   

SOLUTIONS

• Pad completion date or give exact timetable

  One of the responsibilities of our lead carpenters is to prepare a realistic schedule that we share with our customers. We add extra days to our production schedule, and we color code those days in red on the schedule.

   

KITCHEN AND BATH

Details

• SP100 epoxy grout has three parts mixed together

  David Mackowski of Quality Home Improvements switched from standard cement grout to epoxy grout two years ago to provide his customers with a low-maintenance material. The product costs five times more than standard grout, Mackowski says, takes three times the work to install, and increases labor...

   

• build table into the cabinets: pull-out table

  Howard Miller's empty-nester clients wanted three things for their small kitchen: space for a table, room to entertain, and plenty of storage. The owner of Howard Miller Kitchens in Northbrook, Ill., came up with an idea that fulfilled his clients' requests in one unit.

   

SPEC BOOK

• Trends for the kitchen and bath

  AromaSpa bathtubs feature bottom-mounted body-sized air injection systems that result in therapeutic aqua-massages, says the firm. The digital-control tubs come standard with automatic purge cycles and are available in numerous colors and many shapes and styles.

   

Management

• Accept credit cards for deposits or payments

  I prefer a check, but if the customer has no other way of paying or they want to collect free airline mileage, I'll accept credit cards. If someone hires me for a $10,000 bathroom, and I'm paying the credit card company 2%, it may not be worth it to me.

   

PRODUCTS

IN FOCUS

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  Locksets and Hardware (March 2003)

  Solid bronze escutcheons and levers comprise the contemporary line of sandcast door hardware. The company has expanded the Decorator Finishes on its Welcome Home, Prestige solid forged brass, and Powerbolt Keyless Home Access series doorware and locksets to include Venetian Bronze.

   
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  Hand Tools (March 2003)

  The CF12 Circuit Finder is designed to allow one user to correctly identify which breaker controls which circuit. The tool features automatic calibration, plus lights and audio alerts that indicate the location of circuits.

   
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  Manufacturers taking wood out doors and frames to prevent water damage

  Many manufacturers are taking the wood out of their doors and frames to help prevent water damage to the most commonly exposed areas of a door. They are removing the natural wood around door glass and from lower door jambs, bottom rails, and sub-sills and replacing it with an extruded composite, an...

   

READERS CHOICE

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  NuHeat radiant floors: Ambiance LX: Bellacor.com

  Remodeler: AJ Paron-Wildes Company: DreamMaker Bath & Kitchen, St. Louis Park, Minn. Product: Bellacor.com, www.bellacor.com. Remodeler: Jack Philbin, CR Company: Philbin Construction & Remodeling Co., Crestwood, Ill. Product: Ambiance LX linear lighting systems from Sea Gull Lighting...

   

TRENDS

• Restoring a home's windows

  Restoring a home's windows raises many concerns and considerations for remodelers. "If [homeowners] want to replace the sash and the glass, we offer a [tilt] sash replacement kit that includes the sash and jamb liner," says Dave Koester, brand manager, Weather Shield.

   

• Professional-grade floor panels: manufactured and installed flat

  Made mainly of southern pine, aspen, yellow poplar, and other "under-utilized" hardwoods, the floor panels are designed to provide easy, quick installation with fewer weak spots and veneer defects.

   

• Benefits of Composite and Vinyl Decks

  Composite and vinyl decks offer durability, low maintenance, and aesthetic benefits like non-fading colors. LP offers Crystal White Composite Railing for its Crystal White composite decking, Weyerhaeuser recently unveiled matching railings for its ChoiceDek composite decking, and L.B. Plastics' new...

   

LAST WORD

Bench Mark

• Small jobs

  Call me old fashioned, but I still think it's possible to make money doing the kinds of small jobs that got a lot of us started in this business.A good portion of this work is under $1,000, but for Cowgill, anything that doesn't include design is classified as a small job.