Abstract:
This month's Corner Office features Father & Son Construction in Detroit
Publication Date:
Sun, 2010-02-28 18:00
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| Smart business decisions and a willingness to take smaller projects has allowed Mat Vivona’s fi rm to succeed. |
Every market has its challenges these days, but no area has been hit harder by the recession than Michigan.
With its reliance on the automakers and related industries, the Detroit area has been hit by crushing unemployment. Detroit Mayor Dave Bing placed that figure at “30 percent” at the White House Jobs Summit in December but estimated “it’s probably close to 50 percent” when you account for part-timers who want full-time jobs or workers who have stopped looking altogether.
As one of the largest and most well-known remodeling companies in the area, Father & Son Construction [1] in the Detroit suburb of Troy is feeling the impact of efforts to stay afloat. Out-of-work area residents not only don’t have money for remodeling projects, they want to change professions to become remodelers and “think they can do what we do,” says President Mat Vivona. “Everyone who was in the automotive business suddenly became a contractor, handyman, painter and landscaper last year.”
Father & Son has been affected by these newly minted remodelers and the smaller independent contractors, but not just because of the job competition they pose.
“Everybody knows who we are, so everybody calls us for estimates,” says Vivona, who credits their high name recognition to a ubiquitous and catchy television commercial his father produced in the mid-1980s — Vivona modernized it with an animated iteration in 2005. The company also has stellar credentials and an A+ rating from the Better Business Bureau, which makes their free estimates a benchmark that others try to beat with lower bids.
“We’re price-conscious, but now everybody’s going for the cheapest bid — except that doesn’t guarantee you get the best job,” says Vivona. It also does not guarantee that the job gets completed. “I have never seen as many brand new leaky roofs or unfinished jobs in my life as I did in 2009,” he points out. The plethora of shoddy work has led to an uptick in the number of requests Father & Son has received for detailed written estimates — but not necessarily so they could hire them to do the remediation.
“People need thorough written documentation for insurance work and lawsuits and aren’t always honest about why they want the estimate. So now we charge $250 for these types of estimates,” he says.
At the same time that competition has increased, the nature of Vivona’s business has changed drastically in several significant ways.
The first major change was clearly a consequence of the downhill economy: Big-ticket lifestyle jobs, which had been abundant and increasing until late 2008, became far-and-few-between, while pragmatic projects that were pre-emptive or remedial turned into the bulk of his business.
“We call it the, “I-gotta-versus-I-wanna syndrome,” explains Vivona. “People are doing the things they absolutely have to so their homes will stay structurally sound.” Siding, roofing, electrical and plumbing projects are acceptable, but glitzy new kitchens, master bathrooms, room additions and porches are verboten.
Of course the latter are usually much larger, costlier and more lucrative than the former, and sales figures have dropped from a high of $8 million in 2004 to $4.6 million in 2008 and $3 million in 2009. And at the same time, total jobs rose from 406 in 2008 to 488 in 2009, as projects got smaller and more economical.
Unlike other remodelers of his stature, and true to the company motto immortalized by their TV commercial [2] (“No job too big, no job too small, Father & Son, we do it all”), “we focused on the big and small. I had a lady who wanted a bathroom fan, and no one would do it for her except us,” Vivona says. “Yet those small sales added up to be huge last year. And that’s the work that is getting us through these trying times.”
But Vivona isn’t waiting for a recovery to improve sales. Because small jobs have been a successful category for the company this year, he plans on capitalizing on this trend, as well as branching out into other arenas.
The former will require him to train his eight person sales staff to be more aggressive and creative. “Let’s say a customer wants a new kitchen that will cost $20,000, but they only have $14,000. We have to be ready to show them what they can do for $14,000. Or they need a room addition and can’t afford it. We can offer them viable alternatives. Why not close off the garage, insulate it and do some dry wall work. Sometimes a customer thinks they know what they want, but they haven’t really considered all the options. So we have to educate them,” he points out.
He is also a big believer in grass roots marketing. “We go to trade shows and always keep our name out there. We put out signs at our job sites. And if I’m driving down the street and see a problem — say a roof with curling shingles — I stop and leave them a note about it with my contact info,” he says. In many ways, the Facebook page he just created to reach out to former customers and friends is a high-tech version of that tactic.
Another area Vivona hopes to crack is ongoing contract work. Real-estate firms often have arrangements with certain contractors who can do work on the properties they represent or manage, while Big Box stores and home centers need professional and experienced installation crews “who can bring it all to the table. When problems arise, they get lost in the bureaucracy. But we’re experienced, licensed, insured and reputable and can sub-contract it right off their hands. And they know we’ll be around tomorrow,” points out Vivona.
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