Having employees who could make decisions and pass on the company culture was a mainstay for Adams, who, in 2006, had 25 employees working in his then-$6 million full-service remodeling company. Almost all the trades were in-house. Adams, who was profiled in the REMODELING article “ Subs or Employees,” was firmly committed to keeping it that way to control quality workmanship and scheduling and because trade partners were difficult to find during the boom time. The recession forced Adams to cut overhead; DB&R now employs 13 people. Gone are the full-time painter, tiler, and plumber.
“My whole business model has changed,” Adams says. Trade partners, just as deeply affected by the economy as remodelers, are more willing to work difficult jobs. “Now you can get them when you need them, they are happy to get the work, you can get them at a reasonable price, and they are more humble,” Adams says. He foresees sticking with this leaner overhead model.
On the flip side, Bob Lehner, profiled in the same REMODELING article, had seven employees in 2006 and used mostly subcontractors. In the past three years though, he has had to pare his business to just himself and his wife. Lehner now does the work of the production manager, estimator, and salesperson. His wife is the office manager. When the recession is over, he says, he will rehire and start to run jobs internally. “Now that I’m in the field watching these guys, [I can see] more issues with subs [not] being employees. Expectations are not always met.”
New Focus
Keeping the focus on the client is what’s going to be most important, Richardson says. The new remodeling company is going to home in on customer service. More time and money will be spent on marketing in high-touch events such as seminars where, Richardson says, he has already seeing a 300% increase in homeowner attendance. It’s going to be about “focusing your support on client causes, seminars, and their charities,” he says. There will be subtle shifts. “Five years ago we held ‘open houses.’ Now they will be ‘celebrations’ at the client’s home when you’re done [with a project].”
This focus won’t just be at the top levels. The makeup of the new remodeling company will require that all staff be onboard with a customer-centric attitude. “It’s ‘What else can I do for my client?’ as a way to counteract the shrinkage in job size and scarcity of opportunities,” Richardson says.
One way to maintain strong client focus may be to have employees who really understand customer service and personal care. What better way to do that than to staff your company with former remodeling company owners? Joy Kilgore, owner of PRIME (Professional Remodelers In Management Excellence), a peer council made up of leading remodelers, sees that some of the full-service remodelers she works with are finding “great ‘A’ players … who are ready to go back and work with someone else at this point. There are people that have gone out of business or are looking for an opportunity to say, ‘I’m through with the struggle.’ These are good guys who want to get back to their roots.”
The other defining feature for remodeling companies will be diversification. Many remodelers have realized they can’t “have all their eggs in one basket in terms of products and services,” Richardson says. “I’m seeing businesses getting involved in more energy-related things [such as] audits, smaller scale projects [than they previously did], and handyman services. A lot of folks years ago looked at those projects as being a thorn in their side, but now they are an integral part of how they retain clients.”
The new remodeling company — leaner, with a strong team effort, focusing on clients over projects — looks like it might deliver the “old” personal service that many consumers fondly remember. The lessons of this recession, Case says, are going to stick, making an impact on businesses and consumers in the same way that the Great Depression did on people who lived through those lean times. “This will change all of our decision-making. The market will come back very slowly.”
—Stacey Freed, senior editor, REMODELING.
This is a longer version of an article that appeared in the January 2010 issue of REMODELING.