International Builders Show ‘09: Everyone is a Remodeler
LAS VEGAS - Everyone is engaged in remodeling activity: even production builders who not long ago would not sniff such projects. Consider the anonymous tip from a Texas remodeler who heard from a VP at a very large production home builder, that his company plans to go back and offer bonus-room buildouts to past new-home customers - not a bad idea actually.
Builders are referring to their move into remodeling as “diversification”, with a heavy emphasis on diverse. Wise builders who are considering a move into remodeling took advantage of the remodeling sessions offered at IBS in droves. Builders typically don’t need to earn the same margins that remodelers do in order to make a profit. Bringing a builder pricing model to the remodeling market — particularly a competitive remodeling market — could be disasatrous. A 25 percent mark-up might be enough to earn a builder the job, but certainly not enough to keep him or her from losing money in remodeling.
On Wednesday afternoon, Jan. 21, NAHBR Remodeler of the Year, Jeff Hunt, of Brothers Strong Inc., in Houston offered his 10 Best Practices seminar. The room was bursting at the seams with builders interested in diversifying. Hunt’s stance toward the influx of new competition: “Bring it on” — not int he cocky I-can-beat-anyone sense, but rather from the perspective of the quality of the industry at large.
Hunt’s logic: The more that sophisticated players are attracted to remodeling, the better the chance for the industry to improve its image with consumers. A second benefit of new construction professionals coming into remodeling, says Hunt, is that true business professionals will understand the need to charge the right price for remodeling services. Conversely, under-bidding can really disrupt a market and make it unprofitable.
Click at right (roy09.pdf) if you are interested in downloading a PDF file of Jeff Hunt’s presentation at IBS.
Good article, I wish I could have seen your presentation. Having been a remodeler for most of my professional career, some points resonated with me.
For one, the emphasis on process is key. Remodeling is a very, very steep curve, one many new home builders just won’t have the grit to make it through. I know this sounds haughty, but new construction is a cakewalk compared to this. Many new home builders delude themselves in thinking the opposite is true. If they do, they will fail.
Secondly, remodeling is, when all is squeezed from your revenues, a low margin business. Reflecting back on process management, knowing where you are in your sales pipeline to where you are in your production schedule will make or break you.
One final point about the whole remodeling process. Construction guys [and guys in general] are, by their nature, sloppier than women. Women, by their nature, are curators and caretakers of the home. When sloppy men and fussy women clash, guess what happens? Bingo! Therefore, a remodelers ability to manage the mess on a remodeling project is KEY, everything else is secondary. Here’s an illustration: You just wrapper up a job where you hit your profit target, the sales staff nailed their commission, your carpenters and subs did the best work of their life and you’re on to the next one. One problem: the homeowners are hesitant to refer you because the mess left in the foyer took 3 months to completely clean, the table in the Family Room that Grandma left as an heirloom is damaged, and could you believe all the cigarette buts in the driveway area. Think I’m kidding? If you do, you’ll never get this remodeling thing - and as a result you’ll constantly complain when things don’t go right. A clean, orderly jobsite is the bellwether of a remodeling company that will succeed.
One final note: this economic downturn is a great time to rid yourselves of the Prima Donnas on your crew who are not up to this learning curve. Be concise and remember the three As - Attitude, Ability, and Availability. If their attitude stinks, who cares about the other two. Look at TO on the Dallas Cowboys. When his attitude stinks, all bets are off. Now if the attitude is good, you can manage the other two. If your crew won’t let you lead, what good is all the talk about leadership training. Give them the boot and staff with people who want to be excellent.
All said, remodeling is the hardest job I’ve ever had but what fun is it when things aren’t hard. It makes the rewards very sweet.
I would have loved to see this years show. We all know that information is our friend, especially in the day to day world of building. Housing market have slowly dried to a standstill, yet good remodelers are needed and sought after. This is the information that clients are in need of. It does seem that everyone that can lift a hammer likes to think of themselves as a “builder”. After the quick profit you know…
Hope fully ou are right and the present economy will weed out the part-timers and leave the cram at the top.
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