When I started my business in 1986, building was booming in New Hampshire. With most builders focused on new construction, we felt remodeling was a niche to which we brought such qualities as design ability and strong customer orientation.
In 1988 the New England economy started its free fall. Necessity bred invention. We took on any kind of work, including our first commercial jobs. We broke into commercial with small projects, like $20,000 office remodels for clients we already knew. Because of our smaller size and customer orientation, we were better equipped to do these than the big commercial construction firms. For the next five years, our commercial projects grew in size and complexity, due to follow-through and a client-centered approach. Last year, 50% of our $11 million in sales was commercial.
Learning curve
Commercial construction has its learning curve. The demand for documentation and communication, the complexity of relationships, and the more intricate commercial codes all require education and training. We had to make ourselves familiar with many technical aspects of commercial construction -- sprinkler systems, commercial electric systems, medical gas, dental chairs, pneumatic tubes for banks. Carpenters had to learn a whole new system of wall framing and layout.
Commercial construction is held to a higher degree of life safety and fire codes, and there was no negotiating with code officials. We once erected a wall framed with wood 2x4s and covered with 5/8-inch drywall for a restaurant kitchen that was per plan and code enforcement approval. But the fire department, on final inspection, mandated that we rip the wall out and replace the wood framing with steel studs before issuing a certificate of occupancy.
White is white
Commercial buyers are also more interested in what it costs and when it'll be done. If you get a contract to build an Outback Steakhouse, the owners want to be serving steaks 90 to 100 days after permits are pulled. Residential construction has nowhere near the emphasis on speed, scheduling, planning, and accountability. For residential clients there are 52 shades of white. In commercial, white is white, and time is money.
As the commercial work expanded, I had to hire people with commercial experience. But I brought them into a company culture where we emphasize customer satisfaction and communication. I find project managers tend to migrate into commercial or residential work based on personality and preference. Commercial project managers constantly think about how to do a project faster and less expensively. Residential project managers are more concerned with aesthetics and the experience.
Why get into it?
Running an $11 million company in a community of 35,000 people in a state of 1 million means we've got to be willing to work in different niches. What are the advantages?
- Construction cycles last eight years: five good years, three bad ones. Residential and commercial cycles are about two years apart. Working in both markets gives us another place to go during downturns.
- Our company has been able to attract strong field personnel because they see Cobb Hill as a place to learn and grow.
- We're able to bring our commercial documentation, planning, and scheduling to our residential projects.
- Being in both markets has allowed us to be seen as a premier company in our community.
We've stayed out of the bid market in all areas for the past five years. Sell your value, your integrity, your product, your community involvement, and your leadership, not your low price.
--Tom Avallone is president and owner of Cobb Hill Construction in Concord, N.H.
