The remodeling industry has experienced a lot of changes over the years, through technological advances, new products and materials, building requirements, and the labor shortage. While all the changes have occurred, much of the core work done by remodelers and builders has remained the same. David Gerstel, a California-based builder and author with more than 40 years of experience and a contributor to sister publication the Journal of Light Construction, joined the Tim Faller Show to talk about the changes he’s seen in the past 50 years in construction, what he’s learned, and how to prepare for the future.
Change in Materials and Technology
Gerstel said one of the biggest changes to the industry over time is the materials used in construction, largely as a result of technological advances. In addition to material changes, there has been a large change in building requirements, with numerous performance tests and inspections involved in jobs. Gerstel also said one “pretty obvious change” is the advancement of technology.
“The digital revolution has come and we’re all so immersed in it we hardly are aware of the change,” Gerstel said on a recent episode of the Tim Faller Show, a Remodelers Advantage podcast dedicated to the production side of remodeling. “We’ve got a desktop, we’ve got a smartphone, we’re using text and email, we’re using PDFs instead of paper, we’re even using electronic devices to figure rafter dimensions and layout.”
Gerstel said the cell phone is an area that can either be beneficial or harmful to the construction industry, depending on usage. Used badly, cell phones can create a huge problem, Gerstel said. He cited an example of a consulting session he had with a builder who was interrupted 11 times in two hours by phone calls, with a crew totally dependent on the business owner because he was so accessible by cell phone.
The Evolution of Business Practices
While the evolution in technology and building materials are obvious changes, Gerstel said one major change, one that’s no so obvious, is a change in business practices: moving away from bidding for free. Gerstel was at the forefront of this change, moving away from competitive bidding and toward working in collaboration with clients and designers through the use of cost-planning services, also known as pre-construction consulting among other terms.
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The change was borne out of an invitation to work a job with plans that were in such shambles, Gerstel estimated it would have taken him 150 hours to estimate the project, so he attempted to bow out of the job. But the client instead offered to pay Gerstel for the estimating services, and he “never gave a free bid estimate after that.”
“I said to myself, this is really valuable work. I’m going to get paid for it. Customers accepted the proposition,” Gerstel said. Later, Gerstel gave a presentation on the practice at a local builders group, and it was such a popular topic he had to give the presentation twice. “This idea that was started here is now standard practice nationwide…it just sort of evolved organically.”
Gerstel also touched on the rise of the “developer model,” a builder who subcontracts out all the work of a job. Gerstel did not work this when he was in the business but recognizes it works well for many, though he has some reservations about it.
“I’m a little uneasy how that model [the developer model] will hold up during the coming recession,” Gerstel said. “I think the guys who have embraced the developer model are going to have an even harder time staying afloat than the guys using a traditional model.”
Recessions and Planning for Them
Gerstel said he feels lucky to have started working in the industry during a recession, one he said was as rough for the construction industry as the most recent recession. Gerstel said because of the start during the recession, he didn’t take work or profit for granted and learned that in the industry, you must “build a company that can stay afloat during rough seas.”
“I’ve listened to a lot of younger guys now and I worry about them,” Gerstel said. “They’re doing well financially, they’re rapidly building their company, they see their name out there on their trucks, and it makes them feel good. And they attribute it too much to their own talent and not enough to the fact that they’re lucky to be in a lucky moment.”
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