Remodelers and new-home builders both build homes; they just go about it in different ways. While tract builders embrace evenflow or slotting production methods, remodelers schedule around the time a client leaves for work. While builders offer a controlled options list, remodelers offer clients virtually limitless product choices. And while builders demand volume price cuts from subs, remodelers hope for efficiencies by running a tight jobsite, paying quickly … and because their fathers played cards together, back in the day.
Depending on the size of the company and its clientele, remodelers can be anything from a distant relative of new-home builders to another species altogether. But in today's marketplace — where buyers shop neighborhood as much as they do home type —differences count. Remodelers must be perceived as the equal (or better) choice to deliver a perfect “new” home, because they are competing with the lure of a brand-new home — and the well-run building companies that put them up.
To even the playing field, remodelers should look at the things new-home builders do well. Here are four areas where they have something to teach:
1. Scheduling Systems New-home builders often have slick systems that impress clients, who first witness a well-oiled sales and marketing machine when model shopping and assume the rest of the home-buying process will be as smoothly orchestrated.
Mark Gradison, president of Gradison Building Corp., a new-home builder in Indianapolis, moved into remodeling eight years ago and realized early that good organizational skills were important to clients.“Remodelers are notorious for not having good systems. It's given us a leg up on the competition that we can show we are organized,” he says. His company does about $10 million in business, with remodels making up 30% of his work.
Gradison is particularly satisfied with his project scheduling, which he says keeps both subs and clients happy on the 30-plus jobs he has running at any given time. “We use Microsoft Project, which offers a summary schedule to vendors on both our new homes and remodels, so vendors can follow along. They see a four-week picture with the schedule for the next four weeks … then they can just follow the bouncing ball.” Gradison uses the same system to keep homeowners informed, sharing it with them on a regular basis.
Simonini Builders in Charlotte, N.C., also uses Microsoft Project to keep subs on track and to inform clients about job status, but, says Bob Pugh, renovation manager, another tool will do the job as well. “First, implement a schedule,” he says. “I've always done a simple Gantt chart — a schedule that tracks every major item involved in the project that's turned into a timeline.”
But the best systems in the world won't work if the trades don't understand your business. Lancaster, Pa.–based Keystone Custom Homes organized a trade partner council to communicate its plans. Every month, the group meets and goes over issues such as impending jobs or how Keystone can improve customer service or its home plans. “We facilitate this meeting, but we encourage one of the trades to lead it,” company president Jeff Rutt says. “It's a way to hear about their concerns in an organized format.”
Though Keystone is sizable, closing 333 homes in 2005, the partner concept system can be used by any remodeler, even if it's just as a goodwill vehicle. “The trade partner council philosophy is that we are partners with our trades. This is not a dictatorship. We want to be servant-leaders,” Rutt says.
2. Picking Products New-home builders often boast interactive showrooms and sophisticated model-home parks — selling tools that most remodelers simply can't afford.
Gradison uses a “living office” concept as a model home. The company's headquarters is outfitted with a “dining room,” a “hearth room,” and a “kitchen” where customers can look at a limited number of products. A selections coordinator uses a Web-enabled plasma screen, catalogs, former project photos, and the displayed products to help clients make their selections.
Gradison also believes that remodelers should copy the new-home builder practice of giving buyers a home price, almost to the penny, in advance of construction. He does not like allowances, saying that it's stressful for the customer and tough on production schedules. “We call out the full scope and prices on the front side without allowances. … We give the customer the bad news up front, not some pie-in-the-sky number,” he says. “It's a more professional way to do it, churns out a better project, and customers are happy to have [the selections] finished.”