When the annual issue of the Remodeling 550 arrives in my mailbox, I typically scan the list for names of clients, colleagues and friends. Of this year’s top 15 full-service remodelers, five fall within those boundaries. Being somewhat of an analytic geek the next two hours were spent digging more deeply into these top 15 to determine similarities and differences between them.
The first thing that caught my attention was the wide range of number of jobs and job sizes: Brothers Services Co (ranked No. 13) in Hampstead, Md., did 2,700 jobs to produce $26 million in revenue, while No. 14 Rusk Renovations in Manhattan did only nine jobs to produce $23 million in revenue. Divide the revenue by number of jobs and you get an average job price of $9,630 at Brothers and $2.6 million at Rusk. That’s a HUGE spread.
Then the question arose how location might impact the rankings: 14 of the top 15 were located in urban or urban fringe areas (within 40 miles of a metropolitan center); the other, Cape Associates (ranked 15th) works in Cape Cod, a wealthy vacation and second home community two hours outside Boston. Location alone, then, indicates sufficient population density to support a larger company.
Additionally, the top 15 were clustered in three regions of the county: Seven on the East Coast and four each on the West Coast and in the Midwest.
1 | Alure Home Improvements | $ 41,502,098 | Plainview NY | Long Island | ||
2 | Treeium | $ 38,114,083 | Valley Village CA | Los Angeles | ||
3 | Neil Kelly Co. | $ 36,270,469 | Portland OR | Portland | ||
4 | Greater Dayton Construction Group | $ 33,982,643 | Beavercreek OH | Dayton | ||
5 | Allen Construction | $ 32,813,512 | Santa Barbara CA | Santa Barbara | ||
6 | Pacific Homeworks | $ 30,858,520 | Torrance CA | Torrance | ||
7 | The Airoom Cos. | $ 30,000,000 | Lincolnwood IL | Chicago | ||
8 | Case Design/Remodeling | $ 28,294,111 | Bethesda MD | DC | ||
9 | Normandy Design Build | $ 27,778,875 | Hinsdale IL | Chicago | ||
10 | BOWA | $ 27,681,000 | McLean VA | DC | ||
11 | G. Fisher Construction | $ 26,521,536 | Farmington Hills MI | Detroit/Ann Arbor | ||
12 | Gardner/Fox Associates | $ 26,336,137 | Bryn Mawr PA | Philadelphia | ||
13 | Brothers Services Co. | $ 26,059,000 | Hampstead MD | Baltimore | ||
14 | Rusk Renovations | $ 23,295,242 | New York NY | Manhattan | ||
15 | Cape Associates | $ 19,530,638 | Eastham MA | Cape Cod | ||
Average | $ 29,935,858 | |||||
East Coast | 7 | |||||
West Coast | 4 | |||||
Mid-West | 4 | |||||
Among the five companies of which I have direct knowledge, I have observed the many years of focused attention spent building company culture and a high level of customer satisfaction. Achieving these rankings happened over years.
- Alure, ranked #1, has been in business over 71 years;
- Treeium, ranked #2, is a relative newcomer at 24 years, but that’s long enough to establish a secure reputation as well as effective processes throughout the organization.
The most interesting digging, however, compared the annual revenue for all 15 to relative cost of living in each location. I chose Chicago as the baseline for cost of living and assumed a $100,000 annual income in all cities.It turns out that 13 of the 15 companies had significantly higher costs of living than the Chicago baseline while the remaining two weren’t much below: Dayton at 87% and Farmington Hills at 96%.
Company | 2016 Volume | Cost of Living Chicago 100% | |
1 | Alure Home Improvements | $ 41,502,098 | 153% |
2 | Treeium | $ 38,114,083 | 185% |
3 | Neil Kelly | $ 36,270,469 | 127% |
4 | Greater Dayton CG | $ 33,982,643 | 87% |
5 | Allen Construction | $ 32,813,512 | 229% |
6 | Pacific Homeworks | $ 30,858,520 | 176% |
7 | The Airoom Cos. | $ 30,000,000 | 123% |
8 | Case Design/Remodeling | $ 28,294,111 | 193% |
9 | Normandy Design Build | $ 27,778,875 | 199% |
10 | BOWA | $ 27,681,000 | 212% |
11 | G. Fisher Construction | $ 26,521,536 | 96% |
12 | Gardner/Fox Associates | $ 26,336,137 | 145% |
13 | Brothers Services | $ 26,059,000 | 104% |
14 | Rusk Renovations | $ 23,295,242 | 162% |
15 | Cape Associates | $ 19,530,638 | 137% |
Even the two cities in the Chicago metropolitan area showed higher COL: Normandy in Hinsdale at 199% of Chicago metro and Airoom in Lincolnwood at 123%
When 2016 revenue for the top 15 full-service companies in the Remodeling 550 is re-calculated to show the impact of the costs of living in each of the various cities, a very interesting thing happens: Alure’s relative buying power based on its hometown’s cost of living falls to $27 million. Meanwhile, the relative bang for the buck that Greater Dayton GC gets from its revenue rises to $39 million.
Company | 2016 Volume | Cost of Living Chicago 100% | If you were in Chicago | |
1 | Alure Home Improvements | $ 41,502,098 | 153% | $ 27,125,554 |
2 | Treeium | $ 38,114,083 | 185% | $ 20,602,207 |
3 | Neil Kelly | $ 36,270,469 | 127% | $ 28,559,424 |
4 | Greater Dayton CG | $ 33,982,643 | 87% | $ 39,060,509 |
5 | Allen Construction | $ 32,813,512 | 229% | $ 14,329,045 |
6 | Pacific Homeworks | $ 30,858,520 | 176% | $ 17,533,250 |
7 | The Airoom Cos. | $ 30,000,000 | 123% | $ 24,390,244 |
8 | Case Design/Remodeling | $ 28,294,111 | 193% | $ 14,660,161 |
9 | Normandy Design Build | $ 27,778,875 | 199% | $ 13,959,234 |
10 | BOWA | $ 27,681,000 | 212% | $ 13,057,075 |
11 | G. Fisher Construction | $ 26,521,536 | 96% | $ 27,626,600 |
12 | Gardner/Fox Associates | $ 26,336,137 | 145% | $ 18,162,853 |
13 | Brothers Services | $ 26,059,000 | 104% | $ 25,056,731 |
14 | Rusk Renovations | $ 23,295,242 | 162% | $ 14,379,779 |
15 | Cape Associates | $ 19,530,638 | 137% | $ 14,255,940 |
So let’s re-arrange the list based on cost of living differences:
Company | 2016 Volume per Remodeling 550 | Cost of Living Chicago 100% | 2016 Volume IF you were in Chicago | |
1 | Greater Dayton CG | $ 33,982,643 | 87% | $ 39,060,509 |
2 | Neil Kelly | $ 36,270,469 | 127% | $ 28,559,424 |
3 | G. Fisher Construction | $ 26,521,536 | 96% | $ 27,626,600 |
4 | Alure Home Improvements | $ 41,502,098 | 153% | $ 27,125,554 |
5 | Brothers Services | $ 26,059,000 | 104% | $ 25,056,731 |
6 | The Airoom Cos. | $ 30,000,000 | 123% | $ 24,390,244 |
7 | Treeium | $ 38,114,083 | 185% | $ 20,602,207 |
8 | Gardner/Fox Associates | $ 26,336,137 | 145% | $ 18,162,853 |
9 | Pacific Homeworks | $ 30,858,520 | 176% | $ 17,533,250 |
10 | Case Design/Remodeling | $ 28,294,111 | 193% | $ 14,660,161 |
11 | Rusk Renovations | $ 23,295,242 | 162% | $ 14,379,779 |
12 | Allen Construction | $ 32,813,512 | 229% | $ 14,329,045 |
13 | Cape Associates | $ 19,530,638 | 137% | $ 14,255,940 |
14 | Normandy Design Build | $ 27,778,875 | 199% | $ 13,959,234 |
15 | BOWA | $ 27,681,000 | 212% | $ 13,057,075 |
As to changes in rank: Allen Associates lost seven places, moving from fifth in the original list to 12th because of the highest COL adjustment. G. Fisher moved up eight places, as did Brothers Services. Regardless, these are significant accomplishments in highly competitive markets.
So, what does this all mean? It would appear that dense metropolitan areas combined with company longevity can produce significant revenue. Metropolitan areas provide sufficient market density to allow for lots of repeat and referral business over time; company longevity provides for the opportunity to develop, test and re-test systems to assure the greatest efficiency. These 15 companies have all stood the test of time, bounced back from recessions, including the “great recession” of 2008, have all developed strong presence in their market place and DESERVE to be recognized as LEADERS in their industry.
Congratulations to all! For those of you not yet on the list, keep working hard and aspiring to one day be included.