Doing What Comes Naturally

The types of remodeling jobs consumers are pursuing have shifted unquestionably — from discretionary upgrades to more practical maintenance-related jobs, from high-dollar projects to modest rehabs — and, as they always have, remodelers have responded in a variety of ways.

Most have made little change in their business plans (50 percent), while others acknowledge they’ve made an internal change in focus on the types of jobs they’re doing. Of those who noted significant changes in services offered, two-thirds said the change was simply one of emphasis; another 20 percent formed a new division within their company. Ten percent reported investing in a franchise or dealership.

Respondents who took steps to either branch out or specialize were evenly split as to whether their action was a growth opportunity or a survival tactic.

With the size of projects shrinking, a number of remodelers have sought to turn that trend to their advantage by taking on — and actively seeking — “handyman” jobs. In brighter economic times, many contractors had neither the time or interest in these small jobs except perhaps as a means of maintaining contact with their customer base or cultivating new clients.

Those motives are still valid, but some remodelers caution that the work can be labor intensive and profits may be elusive. Steve Gray of Steve Gray Renovations, a full-service remodeler in Indianapolis, would beg to differ. He formed a separate division within his company to actively pursue handyman work and is pleased with the results.

“We started the handyman division officially in 2009,” he says, “because we listened to our customers; the clients we worked with were looking for highly qualified people to take care of the small things.

“When you do a lot of highend remodeling, it’s easy to fall into the trap of thinking this project is way too small. We only do the big things,” Gray says.

The division has been profitable, he says, and has been helpful in keeping his firm visible. “It really helped us dramatically in the first four months of last year when it was pretty slow. We were still continually on the road with our vehicles, and we were seen as that ‘go-to’ company. People didn’t know if we were doing a $2,000 handyman project or a major renovation. It helped keep us in the forethought of people who were thinking of doing a renovation down the road. That’s been a really good thing for us,” Gray reports.

One of the elements that may have contributed to the success of the handyman division, Gray feels, is that it targets a higher-end client base, the same type of clientele the company seeks for its upper-end home renovations. “At the end of the day it wasn’t so much about price as finding someone they trusted who would do high-quality work,” he comments.

“Our clients were willing to pay; they knew they were getting a fair deal from us. We had built this relationship with them long before the handyman division was rolled out,” he adds.

“We looked at it as a way of saying we want to be the total resource for anybody with a home, and we knew that we couldn’t complete that without having a handyman division. We didn’t want to get the reputation for only doing expensive work,” he says.

Gray has taken care to adjust his margins on handyman work so that the jobs remain profitable, noting that not having an accurate handle on their costs is what gets remodelers into trouble even in good times. “If you’re going to do a handyman division, you’d better know the costs and the margins,” he says.

He cautions against taking a job out of desperation and low-balling it. “I would sooner do nothing than do a project knowing I’m losing money before it even starts. There’s no need for that,” he says.

Gray’s handyman division is built on existing strengths, he notes. “We’ve always been really good with our costs, and we have great rapport with all our vendors and contractors. We know pretty much to a T what something should cost,” he says.