Market Leaders 2005

Abstract:

As many different types of remodeling and contracting firms as there are, the challenges are always the same: mentoring employees, pricing for profit, keeping up with new codes and products, standing out in the marketplace. At any industry show or conference, new friends swap war stories and ideas that worked.

Byline:

By Renee Young, Contributing Editor

Publication Date:

Mon, 2005-02-28 18:00

Article Image:

Sidebars:
Business Results
Leadership
Customer and Trade Satisfaction
Performance Management
Leadership
Leadership
Performance Management
Performance Management
Strategic Planning
Leadership
Strategic Planning
Human Resources
Customer Satisfaction
Customer Satisfaction
Customer Satisfaction
Strategic Planning
Performance Management
Trade Partnerships
Strategic Planning
Construction Quality
Strategic Planning

We've captured in print some of those stories and ideas from leading companies across the country. Professional Remodeler's Benchmark Market Leader program recognizes remodeling firms that are local market leaders as well as examples of best practices in action nationwide. It is a company award, not an individual award, recognizing excellence and innovation in at least one of the following areas: leadership, strategic planning, customer service, performance management, construction quality, human resources, supplier realationships and business results.

Remodelers, associations and consultants across the country nominated companies. The editors of Professional Remodeler made the final selections.

Bill Simone
President
Custom Design & Construction

Business Results

MARKET: LOS ANGELES

Custom Design & Construction, Los Angeles

Management: Bill Simone, CGR, CAPS, president; Randy Ricciotti, CGR, CAPS, vice president

Years in business: 19

Staff model: 5 full-time, 1 part-time

Business model: Full-service residential remodeling, kitchen and bath, interior design

Average job size 2004: $250,000

Annual volume 2004: $3.7 million

Simone on business results:

"The Southern California remodeling market is booming. We serve west Los Angeles, South Bay and the San Fernando Valley. Our demographics typically consist of middle-to-high income, single-family homeowners.

"Typical middle-income profile: a two-income family with annual incomes totaling $65,000 to $100,000; owning a 2,500-square-foot home valued from $300,000 to $650,000.

"Typical high-income profile: one or two professional incomes totaling above $150,000; owning a 4,500-square-foot home valued from $750,000 to multimillions.

"Most middle-income families and a small percentage of high-income families take advantage of our ability to carry the project financing."

Results: "Our systems and procedures have raised the bar on our clients' expectations. Our own internal expectations are higher as well on many fronts, such as client satisfaction, employee performance and company profitability. We continuously push new and innovative procedure development."

What worked: "Custom Design & Construction believes in the theory of Kaizen; that is, small incremental improvements over a period of time will lead to a great, overall improvement of the company. We therefore suggest to others that, for starters, they pick something simple to be improved, such as how incoming calls are handled. Then develop and implement a system for improvement. Finally, monitor these changes and their success. Then move on to the next — and slightly more involved — project."

Barry Klemons
Owner
Archadeck

Leadership

MARKET: CHARLOTTE

Archadeck

Charlotte, N.C.

Owner: Barry Klemons

Years in business: 17

Staff model: 21 full-time

Business model: Design/build residential and commercial remodeling, decks, screened porches, sunrooms, children's play sets

Average job size 2004: $4,500

Annual volume 2004: $4.5 million

Klemons on leadership through differentiation:

"From the start I wanted this business to be known for high quality and for the broad range of clients we serve in Charlotte. That means providing professional service, backed by strong and comprehensive warranties. We use the best brand-name products in our work and back them up with a full, written warranty. That warranty is further supported by a national Archadeck warranty reassuring the homeowner — if an Archadeck franchise can't fulfill the obligation, the corporate office can. Our philosophy is always to side with the homeowner and understand his or her perspective. The best products backed by good warranties help customers feel more comfortable."

Results: "In the past 16 years, we've had about 15,000 projects and not once after a project did a customer regret the decision to follow our advice on his job."

What worked: "Our strategy is that we primarily sell to the backyard. We have a large showroom, complete with decks, gazebos, screen porches, sunrooms and more. We've grown this way because this is what our customers want and what they trust us to do."

"You really need to believe in yourself, your people and in the products you sell. We consider ourselves to be equal partners with the client, so we respect what she says, but we also expect her to do the same with us. We often tell customers, 'Think of your project like a space shuttle. How often do you build a space shuttle? Well, we build them everyday.'

"Our team is committed to being current with education. I'm involved in the National Association of Home Builders, NARI and the Better Business Bureau.

"I hire people who think the way I do about our customers. I stay out of the day-to-day business and let them do their jobs. They appreciate it. I have employees who have been here from the start. I work on the business, not in it. I have the right people in place, so that I can set the strategy and let them execute it."

Jeffrey Goldstein
Owner
The House Company

Customer and Trade Satisfaction

MARKET: CAPE COD

The House Company

Hyannis, Mass.

Owner: Jeffrey Goldstein

Years in business: 21

Staff model: 7 full-time

Business model: Full-service residential remodeling, kitchen and bath, handyman services

Average job size 2004: $170,000

Annual volume 2004: $1.6 million

Goldstein on customer and trade relationships:

"Cape Cod is a relatively small place and everyone talks to one another, so a reputation for service goes far. Our clients typically fall into two categories: retired couples and summer homeowners. As a result, we do a lot of work for people who are out of town most of the time. They need someone they can trust from hundreds of miles away.

"We've developed a systematic approach to service that we can repeat with every customer. It is based on the belief that you treat clients like family. We work the same way with tradespeople, mainly through an established program that involves a lot of open, honest communication."

Results: "The payoff is that they become part of our sales team and help build our reputation."

What worked: "Customer service begins from the very first contact. We establish schedules and goals, and every one of our clients has a 'private room' on our Web site, complete with project-process photos. That way, they can visually communicate with us and tie into the project at all times.

"At the end of each project, we present the owners with a 'Homeowners' Handbook' that details all the phases of their project through photographs, a list of product selections, model numbers, paint-color choices, and the names and phone numbers for any trades people who have worked with us. We also send them survey letters 90, 180 and 360 days after project completion to remind them of our one-year warranty and urge them to call with any concerns.

"Each week at our production meetings, we identify tradespeople who have gone above and beyond, as well as those who have dropped the ball. We make sure they all know the good and the bad. At the end of each project, we send out 'report cards' to all the tradespeople who worked with us on a project, letting them know how they did on the job. We also send them a blank card, so they can grade us on the project."

Gregory Miedema
President
Dakota Builders, Inc.

Performance Management

MARKET: TUCSON

Dakota Builders Inc.

Tucson, Ariz.

President: Gregory Miedema, CGR, CGB, CAPS

Years in business: 18

Staff model: 9 full-time

Business model: Full-service residential and commercial remodeling, handyman services

Average job size 2004: $17,580

Annual volume 2004: $1.4 million

Miedema on performance management:

"In metro Tucson, as in every market, we need the financial resources to offer professional services to our clientele. After a poor and nearly fatal performance in 2003, we took a hard look at our financial records and employee accountability. We discovered that we didn't know what our true costs were. We weren't managing our performance. Once we identified our true costs — both job costs and overhead — we developed a better tracking system, and we made some drastic personnel changes."

Results: "The impact has ensured our very survival after a period of poor performance and a false sense of security created by inadequate financial data. Identifying our true costs has allowed us to see just what we must have to compete and secure our long-term success — both at a minimum operating level and what we need to continue to expand.

"I love what I do for a living, and it's a lot more fun to make money doing it. Actually, I have more flexibility to work the way I want to. If I really want a project and know where I am in achieving my annual financial goals, I can be much more competitive — as well as more confident that I'm doing what's best for the business."

What worked: "The only real practice is to know your numbers. It's not reading from a textbook what your markup should be. It's knowing what I need to survive, profit and succeed. It's tracking performance, monitoring sales results, manipulating expenses to provide enough margin to maintain a professional image, a level of customer service, and complementary marketing efforts that will lead to long-term success.

"Markup percentages are useful only if you know exactly what's covered by your gross margin. I'm less concerned about achieving a particular markup level than I am about our gross profit performance. Know your numbers now, and know what they need to be for your future aspirations.

Bob D. Peterson
Rita L. Peterson
Owners
ABD

Leadership

MARKET: FORT COLLINS

ABD (Associates in Building & Design, Ltd.) Fort Collins, Colo.

Owners: Bob D. Peterson, CGR, CAPS; Rita L. Peterson, ASID, CAPS

Years in business: 15

Staff model: 15 full-time

Business model: Full-service residential remodeling, interior design, handyman services, custom homes

Average job size 2004: $40,000

Annual volume 2004: $2.7 million

The Petersons on leadership through community service:

"We feel strongly that people notice who is active in the community. One of our favorite nonprofit organizations is Wingshadow Inc. We donated more than $15,000 — in addition to in-kind interior-design services — for the conversion of a nursing home into Wingshadow's facility. The latter consists of three wings: temporary housing for homeless youth; a high school for the nontraditional student; and a day care for those students with babies, toddlers and preschoolers.

"We also donate design and construction services to various churches, as well as designs and drawings for the local Ramps for Wheelchairs program. ABD designed and built a Children's Dream Playhouse and donated it to the Hearts and Horses organization to be raffled for fund raising. Hearts and Horses aids disabled and disadvantaged children with time on horses for therapy."

Results: "We don't believe we have ever completed a project involving community service that has not resulted in new business. We believe people equate giving to the community to a strong commitment to being here for a long time; stability; and being very trustworthy as owners and as a company."

What worked: "It's not hard to find opportunities, but it's sometimes difficult to find the time, and it does cost money in the form of time and effort up front. We look at it as a form of marketing. The number and quality of our leads have improved over the years, in part because of our community involvement.

"You must enter into it without any preconceived notions that volunteering will automatically grow your business. The true reason for participating is giving. If you believe that, the return will follow because of the sincere giving attitude being expressed to the public."

Geno Benvenuti
Owner
Benvenuti & Stein

Leadership

MARKET: CHICAGO

Benvenuti and Stein

Evanston, Ill.

Owner: Geno Benvenuti

Years in business: 28

Staff model: 48 full-time, 2 part-time

Business model: Full-service residential remodeling, custom homes, cabinet shop and custom millwork

Average job size 2004: $400,000

Annual volume 2004: $8 million

Benvenuti on leadership through employee empowerment:

"To give clients exceptional service, our people must have the flexibility to make decisions. In the Chicago area, especially at the upper end, there are many companies that do good work and provide good service. That's not enough anymore. You have to take service to a higher level. People who have control over their workdays are more passionate in their jobs and can provide that service. If our clients need us to change a flat tire or take the dog for a walk, we will. We have!

"Our culture of self-sufficiency means more freedom for me. I am no longer bogged down in the daily processes or paperwork. I don't review time sheets or expense accounts; I trust my managers to do that. I spend my time looking at, reviewing and finding ways to control the big picture.

"In football games, the offensive coordinator up in the booth has a better view of the playing field than any one person on the field. I believe that when you can see the whole field — the big picture — you can make better decisions about how your business needs to function today and how it can excel in the future."

Results: "The impact this approach has had on business can be measured in morale and money. Our employees have a greater connection to their jobs and are more energized about their work, and so they stay. Most of our employees have been with us more than eight years — low turnover saves us money."

What worked: "Implementing this practice is easy if the person at the top is willing to let go. One of the first steps is choosing key managers you can trust. I handle interviews differently and much better than I once did. I have a clear idea of what I need and listen closely for answers that match what I'm looking for.

"I ask the same questions I always have, but now I listen for clues on what makes the person tick. I talk with employee prospects about how they handle stressful situations or how they resolve conflict. My goal is to hire more for attitude and ability than for experience."

Kelvin and Susan Pierce
Owners
Commonwealth Home Remodelers Inc.

Performance Management

MARKET: SUBURBAN DC/VIRGINIA

Commonwealth Home Remodelers Inc.

Vienna, Va.

Owners: Kelvin Pierce & Susan Pierce

Years in business: 19

Staff model: 16 full-time, 1 part-time

Business model: Full-service residential remodeling, kitchen and bath, custom homes, handyman services

Average job size 2004: $141,000

Annual volume 2004: $2.9 million

Pierce on performance management:

"Because our market is saturated with hundreds, if not thousands, of remodeling companies — ranging from one-truck operators to fully professional firms — we need to brand ourselves as one of the best. The market is full of the typical contractor horror stories, and the discerning client is careful in her selection. We want to work for the type of client that appreciates what we have to offer, such as full-time on-site project management and design by a licensed architect. To deliver on these expectations, we need professional systems and procedures in place and the discipline to follow those procedures. That's the only way to deliver a consistently high level of service."

Results: "The impact is felt in several areas, including rising client satisfaction, as well as increasing employee longevity. The latter stems from our people's recognition of our commitment to the client: They are proud to be part of our organization.

"Another positive impact is our following among subcontractors who want to work for us because the quality of our package and systems makes their jobs easier and more enjoyable. The bottom-line result has been to reduce job slippage to the 1 to 2 percent range, which was a big improvement for us."

What worked: "The best way to get started is to develop checklists and procedures for everything from developing and handing off the design to project management. We place a lot of emphasis on internal communication as well as communication with the client, such as weekly walkthroughs and a very thorough pre-construction conference with the client before construction starts.

"In 2003, we hired a technical writer to document all our systems — sales, design, estimating, production, etc. — to create an official operations manual. We use this manual for training and as a way to set standards of employee accountability. Every time something new comes up or slips through the cracks, we add it to the checklists."

Rick Pratt, third from left, and staff
Classic Homeworks

Performance Management

MARKET: DENVER

Classic Homeworks

Denver

Owner: Rick Pratt, CR

Years in business: 20

Staff model: 8 full-time, 1 part-time

Business model: Full-service residential remodeling, kitchen and bath, basements, historic renovations

Average job size 2004: $77,500

Annual volume 2004: $1.55 million

Pratt on performance management:

"Our customers are a savvy group. With the rise of the Internet, they are many times more informed than the clients we served two decades ago when we first opened our doors. Now, before they even call us, these current clients often know what qualities to look for in a company. The Internet has also made it easier for the consumer to find our competition. So unless we go to great lengths to communicate a higher level of service through our marketing and then keep our word at every step of the process, we will simply be passed over.

"To respond at the speed today's consumers expect, we must have well-organized systems, managed by employees who clearly understand their roles."

Results: "Our success can really be seen through our customers, who take the time to respond to our surveys and write letters of recommendation. We've doubled in size to accommodate the increased numbers and sizes of remodeling projects and have enjoyed 20+ percent growth over the past four years."

What worked: "We implemented the Defined Business Process, a visual tool that maps the organizational structure of our company along with the roles each of us plays in that structure. With this tool, we have been able to keep pace with our rapidly growing company and provide the same level of customer service we did when we served only a few clients per year. It starts with a fundamental drive to demonstrate integrity in working with clients, vendors and subcontractors. It's also very important to have a clear vision of your company: who you want to serve, where you want to serve, and how you want to serve.

"When you get stuck as you grow and change, don't be afraid to look to others for help. The great thing about the remodeling industry is that it's a community unafraid to share. Take advantage of this openness and constantly be thinking of how another's idea can fit into the culture of your own company."

David R. Cerami
Owner
HomeTech Renovations Inc.

Strategic Planning

MARKET: PENNSYLVANIA/NEW JERSEY

HomeTech Renovations Inc.

Landsdale, Pa.

Owner: David R. Cerami, CKBR

Years in business: 21

Staff model: 8 full-time, 2 part-time

Business model: Kitchen and bath

Average job size 2004: $12,710

Annual volume 2004: $1.6 million

Cerami on strategic planning:

"No strategic plan is truly excellent. We all hope that we make more good decisions than bad ones to keep our companies moving forward. Excellence is when we achieve our business vision, which in turn should support a happy personal lifestyle. The balance between work, family and volunteerism is ultimately achieved when a great business works."

Results: "We have been highly successful in attracting and retaining employees at all levels. I am proud to say that one of our design consultants has been with us 17 years. Our office staff has been together for six years, and our production employees have an average tenure of seven years. Maintaining a committed staff — along with ongoing education opportunities — is vital to keeping everyone focused on success.

"Our customers appreciate our displayed commitment through our well-trained staff, as well as the satisfaction guarantee of their individual projects. Customers assume they will get what they want when hiring a professional, and we give them even more through our new project referral manuals that are presented at the end of every project.

"We recently purchased two buildings and completely remodeled one of them to be a fully integrated and modern office, showroom, and wood shop, as well as a general warehouse — complete with its own receiving area. Our new facility makes a statement to employees and customers that we are committed to our profession and that we are here to stay for many more years to come."

What worked: "Firms can achieve strategic planning leadership by first making a commitment to their profession by joining NARI, NAHB, NKBA or other professional associations. The next step is to decide what they want the business model to look like. Do they want a small two- or three-man operation, or do they want to grow into something more?"

Thomas Lammers
President
Houston Structural Inc.

Leadership

MARKET: HOUSTON

Houston Structural Inc.

Houston

Owner: Thomas Lammers, president; Ryan Haas, vice president

Years in business: 27

Staff model: 12 full-time Business model: Full-service residential remodeling, kitchen and bath, exterior remodeling

Average job size 2004: $112,000

Annual volume 2004: $3.8 million

Lammers on leadership through government activity:

"The construction industry in Texas has been plagued with lawsuits that erode any protection contractors have, while fattening litigators' pockets. That's why I was involved with the passage of House Bill 730, which established a building commission in Texas, statewide performance standards, and a new and less expensive method of resolving construction disputes in a way that benefits both the contractor and the homeowner."

Results: "In Texas, you don't have to be licensed to be a contractor. This new bill has a component that requires all contractors to register if they wish to take advantage of its benefits. For example, a homeowner who has a problem with a project can file a complaint with the new building commission, which is staffed with commissioners appointed by the governor. The commission sends out an impartial reviewer to examine construction quality and determine if this is covered under the state's new performance standards. The reviewer will provide a letter stating the validity of the claim and the homeowner can take it from there.

"The goal is to encourage contractors to perform quality work and for homeowners to have realistic expectations. Actually, there are many towns now that won't issue building licenses to contractors who aren't registered.

"It's a place to start because it establishes responsibility. All too often, we take a lot for granted that's undefined. Here we've assigned responsibility to both the contractor for construction and the homeowner for maintenance."

What worked: "This took a lot of lobbying to get done. There was time in the initial drafting phase of the legislation and coordination among several local and statewide organizations. Then there were the letter-writing and telephone campaigns. We did a lot of research to get this done and actually used much of what California has in place."

Kari and Chuck Gabbert
Owners
DreamMaker Bath & Kitchen

Strategic Planning

MARKET: PEORIA

DreamMaker Bath & Kitchen

Peoria, Ill.

Owner: Chuck Gabbert

Years in business: 27

Staff model: 8 full-time, 2 part-time

Business model: Full-service residential and commercial remodeling, kitchen and bath franchise, exterior remodeling

Average job size 2004: $21,000

Annual volume 2004: $1.2 million

Chuck Gabbert on strategic planning:

"I learn so much about my business and what to do to make it grow by talking to other people in the industry. At DreamMaker, we have a 'next-level visit,' during which owners of various DreamMaker franchises visit a location; review the operations; provide feedback and suggestions; and identify opportunities that when you're in the situation, you may not see. That outside perspective is priceless — it's what you need to grow your business."

Results: "We have better sales, and we've completely streamlined our operations. For example, the outside team helped identify that we weren't making the most of the project manager, so we eliminated the role and made people who worked the job accountable for its delivery. Communication is streamlined, and the employees like that they have more of a say in the project."

What worked: "Even if you're not in a franchise situation, my advice is to learn all you can. Go to trade shows, join your local associations and create a network of advisors. We get so busy doing the job that sometimes we never look at where we're going. You need honest and educated feedback to move you forward.

"Also, educate your employees. We send our people to seminars and expect them to share with others back here. We strive to stay atop the market and up-to-date on all the new styles and ideas, so we can relay them to our customers. It gives us a great edge."

Mark Scott, right, and staff
Mark IV Builders Inc.

Human Resources

MARKET: SUBURBAN DC/MARYLAND

Mark IV Builders Inc.

Bethesda, Md.

Owner: Mark Scott, CR

Years in business: 17

Staff model: 23 full-time Business model: Full-service residential remodeling, kitchen and bath, exterior remodeling

Average job size 2004: $250,000

Annual volume 2004: $4 million

Scott on human resources:

"As an industry, we're in something of a stone-age mindset. It's starting to change, but we all need to work together and help each other progress. I hear how other contractors are worried about sharing information with competitors and employees for fear of losing business, but I firmly believe that partnering and mentoring are going to improve the entire industry."

Results: "I'm an education junkie, and I want to create a culture that supports that. I think that's what we have here at Mark IV. Our turnover is low."

What worked: "Open the doors of education to your employees and to yourself. We have four of our five superintendents attaining CLC status from NARI. We're supporting them financially and have hosted pre-test classes at our office for the local NARI chapter. Other team members attend seminars, and they teach what they've learned to the rest of the group.

"We also have in-house training seminars on a variety of subjects chosen by our superintendents. Upper management doesn't decide for them.

"When issues arise, my advice is, get input from all your employees. Make them part of the team. Spend the time getting to know them, how they work and what they bring to the table.

"Check out your local organizations. Be involved with other contractors. Right now, I'm working with three other contractors in my area — all competitors. But we're sharing best business practices, discussing options and coming up with real solutions. It's some of the best education you'll ever get."

Thomas Mitchell and staff
Mitchell Construction

Customer Satisfaction

MARKET: BOSTON SUBURBS

Mitchell Construction

Medfield, Mass.

Owner: Thomas Mitchell

Years in business: 18

Staff model: 10 full-time, 1 part-time

Business model: Full-service residential remodeling, custom homes, kitchen and bath, exterior remodeling

Average job size 2004: $200,000

Annual volume 2004: $2.3 million

Mitchell on customer satisfaction:

"Client service isn't something we do; it is who we are. We are real people serving real people with a genuine desire for their satisfaction. People know if you are giving them a sales pitch versus telling them how it is."

Results: "We frequently win jobs just because of our service. People hire who they trust. Our attention to all of our clients' needs — not just construction — builds trust and ensures a predictable outcome. Not only does the business do better when we live within our values, but personally we all feel better and sleep better knowing we are treating our clients with dignity and respect."

What worked: "Some of the things Mitchell Construction does to earn the satisfaction of our clients include:

providing a well-managed process;
hosting a Web site with 'My Project,' a password-protected feature that allows clients to manage their projects and communicate with their project team;
creating an appreciation program to thank our clients and let them know our relationship with them is important.

"We also continue to work on improving the services we provide. For example, in the past year, we hired a full-time interior designer to provide design services to our clients.

"How do we know our clients are satisfied? We ask them frequently in satisfaction surveys. I believe we must get our whole team to buy into our approach: success through customer care. Then, as we hire, we need to hire those whose customer-care values closely align with ours. Finally I believe a strong culture and core values are essential to consistency."

Rick Montelongo
Owner
Montelongo Homes & Remodeling

Customer Satisfaction

MARKET: SAN ANTONIO

Montelongo Homes & Remodeling

San Antonio, Texas

Owner: Rick Montelongo

Years in business: 30

Staff model: 16 full-time

Business model: Full-service commercial and residential remodeling, kitchen and bath, custom homes, exterior remodeling

Average job size 2004: $65,000

Annual volume 2004: $3 million

Montelongo on customer satisfaction:

"We started with a philosophy that we hold strong even today: CANI — Constant And Never-ending Improvement. We also ask clients to give us CANI — Constant And Never-ending Input. We stay very connected with our customers throughout the entire project — from initial consultation to final inspection — with each client having a designated representative to serve as their key contact.

"We know that our next job depends on how we please our current client, and we attribute our referrals from satisfied clients to our CANI philosophy."

Results: "We have a customer satisfaction rating of 98 percent. We're working on the other 2 percent. Our firm has grown 800 percent in the past decade."

What worked: "We promote the fact that the Montelongo team has been a part of the San Antonio community for 29-plus years. San Antonio is our home and your home.

"We invested in a new technology to aid our clients in visualizing their project. The computer-generated tour provides a 180-degree 'after' shot of the project before we actually begin the work. As a result of this tool, many surprises have been avoided before the approval of final plans or the issuance of the building permit. That builds confidence and trust."

John R. King
Owner
Rampart Homes Inc.

Customer Satisfaction

MARKET: SARASOTA

Rampart Homes Inc.

Sarasota, Fla.

Owner: John R. King, CGR

Years in business: 16

Staff model: 6 full-time, 2 part-time

Business model: Full-service residential remodeling, custom homes

Average job size 2004: $228,000

Annual volume 2004: $2.3 million

King on customer service:

"The customer has a specific expectation of how the project should turn out, but more than likely he or she does not know the path of progress. The remodeler has an expectation of how the project will unfold, but without constant education of, as well as communication with, the customer, those two sets of expectations may not align.

"If we promise to have a customer's project completed by a specific date, it is up to us to fulfill that obligation. Every market needs professionals doing what they say they can do. Differentiate yourself from the competition: Fulfill your promises."

Results: "By managing the expectations of the customer, our business has nearly tripled over the past three years. We identify new customers through an in-depth referral network of past customers, area business leaders and other builders. We do not advertise at all."

What worked: "Fully educating the customer on the particulars of the project, such as the technical and structural aspects of the construction; communicating regularly about how the job is going; having the customer fully commit to product selections prior to beginning the project; meeting point-of-progress completion dates; and maintaining the financial integrity of the project (staying on budget) — all of these lead to managing the customer's expectations.

"The objective is to work only within the confines of our ability to visit the job sites regularly. This allows for better customer service, more frequent visitations, a more manageable team of trade partners, and quicker response time when challenges arise."

William & Joseph Schafer
Owners
Schafer Builders Inc.

Strategic Planning

MARKET: SUBURBAN CHICAGO

Schafer Builders Inc.

Crystal Lake, Ill.

Owners: William Schafer and Joseph Schafer

Years in business: 15

Staff model: 34 full-time, 1 part-time

Business model: Full-service residential and commercial remodeling, handyman services

Average job size 2004: $9,252

Annual volume 2004: $4.1 million

The Schafers on strategic planning:

"Like our slogan says, we are 'Building Clients for Life.' We aim to be the first and only choice for all the home-improvement needs of our clients for as long as they live in our area.

"We're working in the far northwest suburbs of Chicago, an extremely high-growth corridor in our state. So our market is evolving fast, and competition is popping up everywhere and in all forms. We need to stay a step ahead to compete every day.

"That's why we hired marketing and sales managers to position the company, manage leads and reach for sales goals. It is also why we located our offices in a prime location with more room to grow."

Results: "We have been able to capture the trust and satisfy the tastes of some very savvy buyers. These are construction-experienced homeowners who have seen their share of television home-improvement shows and design-center showrooms. They want real answers, as well as respect for their time and money, solid guarantees of professionalism, and beautiful results."

What worked: "Have a vision. Plan for and do things that will make you the best, the first or the only in whatever you offer. Create a category for yourself. Then provide the infrastructure and offerings that go with it. And know that it will take some time to do that.

"Some of the steps we've taken include:

Do your research: Know who prefers to do business with a firm like yours and why.
Become an active member of, and a visible presence in, community events and organizations.
Provide a fully staffed office.
Build strong vendor relationships.
Add staff to keep things efficient and hire department managers who will track and analyze your data.
Acquire a spacious, centrally located facility with a shop, truck bays and showroom.

Bob Gallagher and Craig Durosko
Owners
Sun Design Remodeling Specialists Inc.

Performance Management

MARKET: SUBURBAN DC/VIRGINIA

Sun Design Remodeling Specialists Inc., Burke, Va.

Owners: Craig Durosko, Bob Gallagher

Years in business: 17

Staff model: 32 full-time

Business model: Full-service residential remodeling, kitchen and bath, exterior remodeling

Average job size 2004: $67,000

Annual volume 2004: $4.2 million

Durosko on performance management:

"Performance management is essential, because the clients we serve are very busy. It's important to have a culture where all employees are empowered to make decisions about the projects they're working on. The last thing our clients want to hear is, 'Let me talk to my boss about that, and I'll get back to you.'"

Results: "I have a self-sustained company that doesn't depend on my being involved day in and day out. It's composed of employees who are all focused and driving in the same direction to best serve customers.

"Empowered employees create better experiences with the client. That leads to better work experiences for themselves. We have employees who have been here more than 10 years. [In 2004], we're ahead in sales about 25 percent, and I attribute that to our employees and their client relationships.

"Last year, we used an outside consultant for 'getting all the right people on the bus.' As a result, we hired a director of administration, a director of communications and another top salesperson. Based on those hires, we are in the process of revising our internal procedures and expanding our image. We are also on target for our actually produced, in-house design work, which is the highest gross profit we've ever achieved."

What worked: "I advise people to have a long-term perspective on the business and establish definite goals. It's so easy to be on the job day to day and forget the overall picture. It's important to sit down and create a vision for your company. I knew I wanted a firm with empowered employees. We set that as the overall goal and shaped our performance around achieving it. We're an open-book business. Everyone here knows our goals and what we need to do to achieve them. Knowledgeable, empowered employees represent the best way to build the business."

Paul Winans, back row third from left, Nina Winans, seated left, and staff
Winans Construction

Trade Partnerships

MARKET: SF BAY/OAKLAND

Winans Construction

Oakland, Calif.

Owners: Paul Winans, CR, and Nina Winans, CR

Years in business: 27

Staff model: 9 full-time, 2 part-time

Business model: Full-service residential remodeling, kitchen and bath

Average job size 2004: $155,000

Annual volume 2004: $2.8 million

The Winans on trade partnerships:

"Leadership in trade partnerships is necessary to compete in this market, because we subcontract so much work. We want trade contractors to know how we work, what we expect, and to be part of the Winans team. If we are working productively with the right trade contractors, we can get more work done and our clients like us.

"We ask our trade contractors to follow our requirements with regard to annual contracts, work authorizations, job-site policies, billing procedures and the like. In return, we promise and deliver prompt payment, respect, ready job sites and more. We have many long-term relationships with trade contractors who appreciate our professional approach."

Results: "We are able to increase the company's sales volume while maintaining high levels of gross profit and client satisfaction."

What worked: "We created a trade contractor manual that contains all our relevant policies and procedures. We sent this manual to all of our current trade contractors and give it to any new ones with whom we establish relationships. To kick it off, we invited all our trade contractors and their key staff members to a breakfast meeting with our staff. There, we reviewed the manual's contents. We also gave prizes to attendees who answered questions correctly and formally presented awards to a number of contractors for whom our staff voted. We asked that evaluation forms be filled out at the end of the event to see if this was worthwhile. The answer was a resounding 'Yes!'"

Keith R. Alward
Owner
Alward Construction Co. Inc.

Strategic Planning

MARKET: SF BAY

Alward Construction Co. Inc.

Berkeley, Calif.

Owner: Keith R. Alward

Years in business: 25

Staff model: 27 full-time, 4 part-time

Business model: Full-service residential remodeling, custom homes, cabinet shop and custom millwork

Average job size 2004: $75,000

Annual volume 2004: $5.4 million

Alward on strategic planning:

"Building is about cooperation and forming strong relationships. It's about how we listen to each other, help and teach one another, and recognize the possibilities inherent in another point of view. Employees are the strength of this company. They represent Alward Construction to our clients."

Results: "We have an extremely high satisfaction rate. More than 90 percent of the firm's annual work is the result of customer referrals, architect referrals, or second jobs for existing clients. At any time, at least half of our jobs are with past customers. Over a fifth of our total client population has asked us to do more than one job for them.

"I work with people with whom I have good relationships — employees, clients, vendors and subcontractors. And our profitability allows us to serve the needs of our clients and provide good benefits to employees, while having the reserves necessary for growth. We recently opened an office in Redwood City to provide service to Palo Alto and the surrounding areas."

What worked: "I'm extremely trustful — employees have complete autonomy on their projects. The field team runs all projects, and the home office is strictly a resource to help the field. Managing information and expectations is a lot of what construction is about. Who better to do that than the person in the field?

"We do a lot of different types of jobs, so people can gain a wide education, and all our lead people are encouraged to serve as mentors to others. Find a good seminar, and we'll pay for it. And we encourage our people to attend local seminars on lead detection, waterproofing and other relevant topics. It usually takes about 10 years for someone to move from apprentice to project manager. At that point, they can handle the complex homes we work on, which can range from $500,000 to $1 million."

Construction Quality

MARKET: BOSTON

Lee Kimball Kitchens

Boston

Owner: Bruce Johnson and Gregory Johnson

Years in business: 65

Staff model: 11 full-time, 5 part-time

Business model: Full-service residential remodeling, kitchen and bath

Average job size 2004: $108,000

Annual volume 2004: $2.6 million

The Johnsons on construction quality:

"We spent close to two years developing a set of core values that help us focus on what our clients need. These values, which were determined by the entire Lee Kimball team, give us a central focus. Our values are: exceptional customer service, accountability, positive attitude, excellence, respect and communication. By setting high and consistent standards, we can continue to grow and give our customers outstanding results."

Results: "A lot of our new business is based on referrals. The best marketing we can ask for is word of mouth from happy customers."

What worked: "By setting these values, we have been able to base all of our interactions with clients, vendors and each other on a consistent message. We also developed a succinct list of promises to our clients, our colleagues and ourselves. Some of what we promise to do includes:

Be on time every time.
Do the little things that make a big difference.
Know your customer and your business.
Have confidence in the team and remember that our strength is in working together.
Appreciate others' abilities, thoughts and ideas.
Finish the job with the same attitude and enthusiasm you started with."

Strategic Planning

MARKET: SUBURBAN PHILADELPHIA

Creative Contracting Inc.

North Wales, Penn.

Owner: Bob DuBree

Years in business: 17

Staff model: 10 full-time, 1 part-time

Business model: Full-service residential remodeling, kitchen and bath, interior design, exterior remodeling, handyman services

Average job size 2004: $75,000

Annual volume 2004: $2 million

DuBree on strategic planning:

"In 2003, we performed a marketing study and created a branding report to develop a new image, logo and tag line: The Difference is in the Design. And we invested time working on the business through personal development to help build a strong, independent team."

Results: "At the core of Creative Contracting is our commitment to customer satisfaction. Our team of highly skilled craftspeople and superior project managers are ready to ensure the job will be done on time, within budget, and with quality workmanship throughout. We've received many awards doing just that."

What worked: "We created a tactical plan to achieve our brand promise, including developing the vision, setting long-term goals, and developing key strategies that really make a difference in the business. The strategies included focusing on design/build, operational excellence and geographic expansion. We also developed and implemented a new integrated sales, design and estimation process and a new metrics program."