Table of Contents February 2006

VIEW POINT

FIRST WORD

• Smart Growth

  Last month at the International Builders Show (IBS) in Orlando, Fla., I had an opportunity to walk the site of two homes that will be showcased at next year's convention. One of the side-by-side projects — currently under construction in Orlando's historic downtown — is The New American Home, a regular IBS project that is featured in BUILDER magazine, our sister publication. The second building, dubbed The Renewed American Home, will be featured in our February 2007 issue.

   

News + Notes

• Life After the Boom

  The economy can be a scary thing to small business owners. Few truly understand it, but most have at least a vague notion that they should pay attention to it.

   

COMMENTARY

LINDA CASE

• The Planning Instinct

  New Year's Eve in my house brings four good friends for a night of overeating, under-drinking, and ruminating about goals and resolutions for the year ahead. In essence, we talk about where we are today and what will make the next 12 months successful. The five of us represent a range of philosophies — from “I don't like to plan” to “Planning is key to achieving.” None of us can say what unforeseeable events will befall us, but we do have a sense that defining what we want will improve our chances of surviving them.

   

MARK RICHARDSON

• Quotable

  I have always found that certain sayings or quotes strike some mysterious internal chord that causes light bulbs to go off. Some spark new ways of thinking about familiar problems; others serve to guide me through really tough decisions in a world that can be very complex and confusing. The following are a few of my favorite quotes that have some relevance for your remodeling business. These may not resonate for you the way they do for me; I'm sure you have your own favorites. The important point, however, is to understand the power of quotes and see how to use them to your advantage.

   

SHAWN MCCADDEN

• Goals vs. Strategies

  Welcome to that dry spell in the remodeling business. It happens to every growing company, regardless of size. It often arrives just after the busy holiday season. The team worked nonstop to get that big kitchen finished just in time for the customer's holiday party. Fantastic! That is, until they got back to the office with nothing to do.

   

GUEST COLUMNIST

• 

  Big Box Boogie

  To diversify and maintain a steady cash flow and profit, our five-person company, which has been doing custom home building and renovations for 18 years, develops and maintains business relationships with architects, interior designers, and other professionals. But for the past five years, about 15% of our annual revenue — and perhaps an additional 15% in repeat business — comes from our relationship with a local retailer owned by a national home improvement company for which we install kitchens.

   

YOUR BUSINESS

Ways + Means

• People + Skills: Right Person. Right Job.

  Before delegating tasks, you need to choose the best person for each job.

   

• Work + Life: Rest Easy

  How do I keep cash flow and employee worries from clouding my personal life and even affecting my sleep?

   

• New Year's Goals

  Charles Russell was always a strong planner. Early in his career, when he wore most of the hats, he would go off alone on quarterly two-day planning retreats. “It was a struggle. I'd put the whole company plan together, and I'd come back and say, ‘This is it.'”

   
• 

  Streamline Smaller Projects

  It takes a lot of overhead and management to complete the more than 600 “process points” Orren Pickell Designers and Builders touches on during a remodeling project. That's why it developed a process it calls “Remodel Lite” to deal with smaller jobs.

   

BOTTOM LINE

• IRS 2006 Mileage Rates

  Beginning Jan. 1, 2006, the standard mileage rates used to calculate the deductible costs of operating an automobile (including vans, pickups, or panel trucks) for business purposes will be 44.5 cents per mile for business miles driven.

   

• Escrow Accounts

  Contractors in New York state are required by law to place initial deposits in an escrow account. Remodeler Dett Otterbeck of Otterbeck Builders in Castleton, N.Y., says the practice works well for his company. When he receives the first payment on a project, he puts that money in an escrow account. “We don't draw on it until we offset it with the first receipts,” he says.

   

• Insuring the Best

  Ben Morey of Morey Construction understands that purchasing insurance is hard for general contractors —and even harder for subcontractors. The owner of this design/build business in Signal Hills, Calif., asks his insurance company for quotes for his subcontractors.

   

Sales & Marketing

• 

  Take One and Pass It On

  Borrowing a page from the Realtors' marketing book, remodeler Steve Rehder generates leads by way of those ubiquitous “Take One” boxes often posted in front of homes for sale. Only in his case, the boxes contain six-page, four-color marketing brochures for Rehder Construction, Los Gatos, Calif., and are posted in front of homes the company is currently remodeling.

   

• Sales School 101: Speaking The Language

  Challenge: A growing percentage of your market speaks little or no English, and your sales staff speaks only English.

   

• Meet the Neighbors

  When your next big project begins, introduce yourself to the neighbors. “If you take just a few minutes to tell them what you're doing and how long it's going to take, their body language changes before your eyes,” says Steve Klitsch, who owns Creative Concepts Remodeling in Germantown, Md.

   
• 

  Marketing Workshop/Photography

  Former professional photographer Terry Dinning visually documents every project for Dinning Builders, East Lansing, Mich. He describes his camera, a Kodak DX 6440 digital, as “a fantastic tool” for many purposes, such as creating estimates, tracking progress, and troubleshooting problems that arise later.

   

FIELD NOTES

• Lingo for Gringos

  The extent of many remodelers'Spanish is “Habla inglés?” But, you'll need more than that to converse with Spanish-speaking workers.

   

• Anger Management

  Nobody enjoys being confronted by angry clients, but avoiding them “is absolutely the worst thing you can do,” particularly if you're in their home nearly every day, says Beverly Koehn, a consultant to remodelers and builders. “The minute you start avoiding them, you dig yourself into a deeper hole.”

   

• Inspection Perfection

  Along with production schedules and safety information, the bulletin board we post at jobsites now includes a list of the most common inspection failures in Montgomery County, Md., where we do much of our business.

   

BY DESIGN

• 

  Double Duty

  The owners of this Madison, Wis., Cape Cod, wanted a second garage and a screened porch that was attached to the house (to replace the screened gazebo out in the yard). Designers at Architectural Building Arts (ABA) could have converted the existing one-car garage into a screened porch and added a detached two-car garage.

   

• Color Coated

  Good design with paint is not about choosing what color to use but, rather, understanding how colors work. That's what the folks at Sherwin Williams learned when, while developing

   

Tech@Work

• Security Resolutions

  Even though we're already into 2006, it's never too late to work on your game plan. Here are three resolutions for data safety and security for the new year. I'll expand on these topics throughout the coming year, so stay tuned.

   
• 

  Got It? Flaunt It.

  I use 10% of what Excel will do, and the average person probably uses 2%,” says Ed Castle, owner of Ed Castle Construction, a design/build firm in Kensington, Md. Castle creates fairly sophisticated spreadsheets and uses the software, which is a part of Microsoft Office, as a project manager system.

   

GOOD FORM

• 

  Customer Profiling

  Jolynn Johnson, president of Crystal Kitchen Center in Crystal, Minn., once thought that many of her clients came to her from Yellow Pages ads. Imagine her surprise when, using the results from this job profile sheet, she learned that not a single one did!

   

FEATURES

• Tips From the Trades

  Ask a group of remodelers what they can learn from trade contractors, and you'll likely get a lot of muttering and more than your fair share of smirks. Trade contractors —more commonly known as subcontractors — are not perfect, of course, but they do some things very well, even better than (gasp!) general contractors.

   

• Refer Madness

  Could it be any easier for homeowners to find home improvement contractors? Only if the online referral industry maintains its current torrid growth rate. Having emerged in the 1990s and then largely imploded in the dot-com bust, this industry is back and bigger than ever. Hundreds of services exist today, from national behemoths that “match” contractors and consumers automatically to one-person companies that know every client by name.

   

• Hirer Beware

  Most states require corporations offering design services performed by its own employees to obtain a Certificate of Authority to practice architecture. Without it, the contractor is practicing illegally.

   

• Architectural Solution

  Control. In a remodeling project, everyone wants it — contractor, client, architect. In the traditional remodeling process, the three-way struggle for control creates instability. For many remodelers, bringing an architect in-house is the best way to achieve balance.

   

Before & After

• 

  Before + After: Suite Heart

  Seventeen years ago, on a drive through the hilly, leafy streets that surround Nashville, Tennessee's Vanderbilt University, Dan and Evelyn Raines found the house of their dreams. The modest 1920s French-cottage-look-alike sat high above street level, perched on a deep, double lot that climbed the hill behind it. The three-quarter-acre property promised plenty of room for Evelyn to pursue her passion for gardening, and the convenient midtown location meant Dan could easily commute to his job as a music producer. The diverse neighborhood with excellent schools in walking distance made it ideal for raising a family.

   

Reader Panel

• 

  Reader Panel: Designed. Built.

  Among respondents, a substantial number of remodeling company owners — formally trained or not — are designing projects. This is true whether a firm bills itself design/build (65.6% of respondents) or is a traditional remodeling company (34.4%).

   

BIG50

CLOSE UP

• 

  Profile: Keith Alward

  Good parents encourage their children to welcome responsibility, think for themselves, and take risks. Good employers do the same with employees. Having nurtured some of his 36 employees through 20-plus years of progressive growth and responsibility, remodeler Keith Alward (Big50 2002) believes in the value of autonomy and self-reliance.

   

SECOND LOOK

• 

  Second Look: Dana and Scott Jurak

  After 25 years of remodeling in Plano, Texas, Dana and Scott Jurak (Big50 1991) have left the United States for the crystal beaches of Turks and Caicos. After visiting the Caribbean islands during a scuba diving trip, the couple built a two-unit villa on the island of Providenciales.

   

SOLUTIONS

• Cost Controls

  The answer to this question for me is twofold: material volatility and labor/subcontractor volatility. When the price of lumber, drywall, concrete, or any other building product is fluctuating, I reduce the amount of time the contract is good for to limit my exposure and also include a material-escalation clause to protect me against major price changes and shortages caused by factors beyond my control — such as a hurricane or the like.

   

FACE OFF

• Should you give clients an incentive to complete product selections on time?

  We offer a discount to clients who are having a hard time making up their minds on product selections. If they finalize the list of products before contract, they receive a 1% discount. If by the pre-construction meeting they have made most of the decisions, they receive a half-point rebate.

   

KITCHEN + BATH

DESIGN CLINIC

• 

  Light Touches

  Remodeler Janice Donald of Eren Design & Remodeling, Tucson, Ariz., says this kitchen is part of an outdated house that is typical of the area. “They have low ceilings and are chopped up into little rooms,” she notes. The owners of this house wanted to open up their living room, family room, dining room, and kitchen to create a better flow for the whole house.

   

Management

• 

  Appliance Primer

  A new book titled Kitchen Appliances 101: What Works, What Doesn't and Why helps designers and remodelers educate homeowners about appliance options -- and update their own understanding of these features.

   
• 

  Dye One On

  Benvenuti & Stein uses transparent dyes with its custom cabinet line to create unique finishes that differentiate the Evanston, Ill., remodeling company from its competitors.

   
• 

  Web Care Guide

  To answer questions about maintaining kitchen products from his clients, Dan Luck added a section to his Web site that includes instructions for the care of cabinetry, engineered stone, and natural stone.

   

SPEC BOOK

• 

  Kitchen Lighting

  Pendants, track lighting, and recessed downlights, both decorative and functional, comprise a wide range of lighting options that make the kitchen really shine.

   

REPLACEMENT

DECKS

• 

  Selling Sunrooms

  Sunroom, solarium, patio cover, porch enclosure, garden room, country room, three-season room, all-season room, conservatory. These are among the many names given to the glassed-in additions that have become popular remodeling accessories. Typically, these structures are discrete units consisting of aluminum extrusions with insulated glass and foam panel infill.

   

SIDING

• 

  Halfhearted

  Sometimes, in the middle of a presentation, with both homeowners present, one suddenly gets up and leaves. This can happen for any number of reasons. For instance, one spouse has to take a child to sports practice or start dinner.

   
• 

  Simple Scaffolding

  It's not just for small jobs,” says carpenter Mack Thomas of Cambridge, Mass. “We use them all the time for re-siding, working on porches, and building additions.”

   

PRODUCTS

TRENDS

• 

  That's a Wrap!

  Originally made to prevent air and water infiltration, housewrap products now are engineered to serve several purposes. They still act as air barriers, but a greater emphasis is now placed on managing moisture generated from both outside and inside the home.

   
• 

  Built-In Security

  Fifteen years ago, even high-end homes were unlikely to sport windows that could withstand hurricane-force winds. In 1992, Hurricane Andrew changed that and gave quick birth to an industry — an industry that today has even the attention of non-coastal residents.

   
• 

  Power Platform

  A tool's productivity is often of greater concern than the battery chemistry that drives it, but the Lithium-ion (Li-ion) battery platform merits closer consideration.

   

ON THE JOB

• 

  Roof-Leak RX

  Slipping shingles. Common causes include using too few fasteners, overdriving and underdriving the fasteners, and driving fasteners (especially staples) at odd angles.

   

IN FOCUS

• 

  Worker Gear

  Designed to provide exceptional thermal protection, Perfect Fit Carbtex gloves feature an oxidized outer shell in the fiber that creates a protective barrier to the inner thermoplastic core.

   
• 

  Caulks, Sealants, and Adhesives

  The first of its kind, 890FTS Field-Tintable Silicone sealant allows contractors to tint silicone in the field, expanding their color palette without special orders or cost concerns of over- or under-ordering.

   
• 

  Flooring

  The latest technology offers a myriad of flooring options without sacrificing style. Aluminum-oxide technology enhances scratch and wear resistance, and color-streaking processes expand the array of available finishes.

   

LAST WORD

Benchmark

• Information Overload

  Ever struggle with too much information? Do you look at your financial reports with no idea how to find the few important numbers? Are you continually befuddled by your inability to locate the true risks in project management despite the amount of detail in your estimates?