There’s a new group of remodelers on the block. They are young, full of knowledge and are putting their mark in every aspect of remodeling. They might not have 20-plus years in the business, but they are steadfast and quickly joining the ranks of top remodeling companies in the country. This group of company owners is proving that running a business in this industry is just as important as a perfectly built home.
The U.S. Census Bureau released its 2002 Survey of Business Owners report last year, which showed that a quarter of all respondants were between the ages of 25 and 34. Another interesting statistic showed that America’s business owners are highly educated, with 64 percent having at least some college education at the time they started or acquired ownership in their business.
Additionally, these young business owners are also seeking to balance their professional and personal lives. The U.S. Census Bureau reports that when it comes to putting in long hours on the job, more than half of the owners of employer firms reported working overtime in 2002 (more than 40 hours a week, on average), compared to only 26 percent of the owners of nonemployer firms. In contrast, 63 percent of the owners of nonemployer respondent firms reported working less than 40 hours a week, compared to 33 percent of the owners of employer respondent firms.
Whether they are taking over the family business or are starting one up, these remodelers are focused on developing elaborate marketing strategies, incorporating advanced software programs and technology and creating business plans aimed at increasing revenue and broadening company offerings.
Adapting to New Practices
With their share of opportunities in the coming year, these remodelers also face a host of challenges. One of the biggest challenges for Matt Hullander, who is in the process of buying out his father, who has run the business for the past 30 years, is helping his employees adapt to a new style of management.
“Not knocking my father, he built a very reputable remodeling company, but he ran the business a lot differently than I am, and it’s sometimes challenging to get our employees to adapt to that change,” says Matt Hullander, president of Hullco Exteriors, Chattanooga, Tenn.
What he is specifically speaking of is the adaptation of technology. Many remodelers are seeking out advanced software programs to help direct marketing, improve production and boost their customer service.
“We are using a Web-based communication tool, called BASECAMP, which was recently highlighted in INC. Magazine,” says Geoff Horen, CEO of The Lifestyle Group, Inc., Indianapolis, Ind. “We use this to communicate with our clients and log a history of all communication activity for future reference.” This program allows Horen to complete schedules for the client to see, receive change order approvals and interact at the convenience of the client with normal day-to-day questions that do not require in-person or phone interaction.
Lead generation is another area of importance to these remodelers. Hullander says that no lead is a bad lead, but an opportunity to better understand their audience and redirect their marketing efforts to get the sale.
“Our lead software allows us to know everything there is to know about a particular lead,” says Hullander. “We are even able to order and send direct mail to a specific target area through the program.”
Chris Weir, CGR, CAPS, owner of Weir Building Company, Fenton, Mich., has a different approach to his marketing strategy. “I have what I call ‘grass roots marketing,’ ” he says. “Eighty-five percent of our clients come from client referrals and from my strategic partners (insurance agents, lawyers, realtors, etc.)” Weir does some local advertising with the chamber of commerce, local rotary club and also does his share of community service to get the word out.
The next generation of remodelers is proving to have a positive effect on the industry. With their interest in education, best practices and professionalism, these company owners are advancing quickly. “Being a younger guy in this industry, I owe a lot of my success to those who have been doing it for years,” says Weir. “I’ve learned so much from talking with them at meetings and trade shows; everyone in this industry is so open and willing to share their trials and tribulations with us.”
For Matt Hullander, 33, manilla folders and stacks of paper piled on his desk was his reality not too long ago. As president and soon-to-be owner of Hullco Exteriors, Chattanooga, Tenn., Hullander has taken the reputable company his father built and is fine-tuning its business practices to meet 21st century standards.
Hullander, who has worked with his father for the last 17 years, says his biggest challenges are lead generation, internal organization, growing the company in terms of sales revenue and balancing his professional and personal lives.
Since being named president three years ago, at the age of 31, Hullander has successfully progressed in many of these areas. For starters, he tossed aside the manilla folders and incorporated MarketSharp into this company, an all-in-one lead tracking software. “For almost 30 years, we had no lead tracking system,” says Hullander. “What would typically happen is a lead would come in, the salesperson would follow up; if it wasn’t sold, he would throw the client’s file in his desk and it was forgotten about.”
Since integrating MarketSharp into their business, Hullander has hired an employee specifically to learn and utilize this program. He uses this program for many of his marketing efforts, such as direct mail, TV and advertising. Prior to his promotion, the company had no marketing budget and even two years ago, they only budgeted 2 percent to this area. This year, and because of his lead tracking system, Hullander is devoting 5 to 6 percent to marketing and has substantially increased his television advertising, spending $100,000 in his May through April fiscal year.
“This program has really stepped up our marketing efforts,” says Hullander. “We are able to put in our criteria; for example, households in Knoxville that have an income of $180,000 who had a remodeling project completed in the last five years, and the software spits back a report of qualified homeowners we can target.” Today, Hullander is working on creating a database of clients going back at least 10 years.
“When my dad first started the company, there were hardly any companyies doing the same thing as he was,” recalls Hullander. “Today, we are working in a market with 14 other competitors doing the exact same thing as we are, with lower costs or different product options.” Since competition increased rapidly, Hullander had to pay close attention to what his competitors were doing and how he can do it better. He relies on the reputation his father built over the last 30 years and continues with a high level of customer satisfaction.
Another goal of Hullander was to revise the company’s internal structure. “There were a lot of internal changes that I made since becoming president,” he says. “We rarely had any type of meeting with our staff, and now I hold weekly meetings with the salespeople. I also have one breakfast meeting a month that usually includes a manufacturer rep coming in to talk about products or our finance partner talking about how to get customers to finance through Hullco.” These meetings have helped get everyone on the same page and have also helped the sales staff in the field because not only is the sales team educated on the products they sell, but they also are being schooled in the art of selling.
“We have adopted the Mastermind modules into our sales program, and the staff is required to do weekly lessons and follow-up quizzes,” adds Hullander. “Since many of the salespeople have been at the company for a long time, they aren’t used to doing this sort of stuff, but they are accepting it very well.” The staff is also sent out with a checklist of things that must be taken care of, from receiving the lead to remembering to put a jobsite sign in the customer’s yard, which reduces any room for error.
Hullander has also added an incentive program to motivate his sales team to reach and surpass their budgets. “I used to give away $500 gas cards or Home Depot cards at our monthly breakfast meetings and then at the end of the year, I gave away a trip to Cancun, but that didn’t seem to cut it,” he says. “I found what works best is giving them money!” His incentive program now includes receiving half a percent of their total sales if it reaches $75,000 a month and 1 percent if they reach $100,000 a month.
Although Hullander is considering adding a few additional product offerings, he is very attentive to keeping the company focused on his exterior replacement roots.
“Back in the day, my dad would have cleaned a swimming pool if asked,” he jokes, “but I’m trying to stick with what we are good at — windows, siding and porch enclosures.”
During high school, Chris Weir, CGR, CAPS, spent his summer breaks helping out at his stepfather’s construction business. Continuing working in the trades throughout his time at Michigan State University, Weir ultimately decided on a construction management degree. “Most people think you can only get a construction management degree at a tech school, but it’s great that they also offer it at large universities.”
His degree led him to work for Adler Homes, one of Michigan’s premier builders. “I started as an estimator and then eventually got into purchasing as well as becoming head of the estimating department,” explains Weir. “I am happy that I got to see the ‘office’ aspect of the construction business since it has helped me with my own business.” Weir says he was able to get involved in many of the marketing and business plans where he absorbed a lot of useful information.
After five years at the Adler Homes, Weir says he felt “financially ready” and thought he had enough experience and knowledge to venture out on his own. In May of 2000 and at the age of 28, he opened up Weir Building Company in Fenton, Mich.
At first, Weir devoted his efforts into two spec homes. “Since working mostly with new construction, I thought I’d take a shot at building a couple of spec homes and see where that took me,” says Weir. “However, the homes sat there a lot longer than I expected and I had to look for a new direction.”
What he learned from this experience was that he excelled in customer relations, being able to sit with a client, hear their needs and wants and then bring that to reality. “Remodeling sort of fell into my lap.” he says. “We weren’t busy after the spec homes and took on a lower level remodel and found that remodeling was something I really enjoyed.”
From that point forward, he took on what he calls “the three-headed monster” — building, remodeling and subcontracting.
Like many in this business, Weir found himself working 80+ hours a week just to get by. After sitting down with Les Cunningham and a few other remodelers at a trade show and hearing these guys were working 50 hours a week, making double the money, he decided to reevaluate his business.
Weir immediately joined Business Networks and worked to receive both his CGR and CAPS desinations. “The cool thing about remodeling is that everyone is willing to share their ideas for success,” says Weir, “and being part of Business Networks takes that to the next level”
Now in his seventh year of business, Weir has begun to implement unique business practices to help grow his $1.7 million company.
Internally, he has increased the communication flow between his employees and himself by putting into practice a “Three-year growth plan.”
With each employee, Weir sets a large goal they both agree on and then focuses on smaller goals throughout the year to ultimately reach that point. “This has relieved a lot of pressure throughout the team,” says Weir. “Now, we are very open about each other’s expectations.”
Another area that Weir feels has helped him grow his business is having up-to-date financal reports. “I’m the type of person who can stay up all night thinking asking myself, ‘did I lose $500 on that, or did I gain $500,’ ” says Weir. “I don’t know if it’s a good or bad thing to have this personality trait, but I do know that I’d sleep much better if I knew the answer.”
To satisfy this “problem” of his, Weir uses a working budget spreadsheet that is updated frequently. This document gives him a more accurate idea of his profit/lost and allows him to see exactly where he stands financially at any given moment.
Geoff Horen, 35, didn’t spend his years as a youth on jobsites, nor did he ever consider construction as a profession. “I actually have a bachelor’s degree from Indiana University in biology,” says Horen. “I was planning on going to med school, but changed my career goals my senior year — decided I didn’t want to go to school another eight years — and began taking business classes.”
Fast-forward to 1999 and he is the CEO of The Lifetsyle Group, a full-service remodeling company that brought in just over $2.1 million in 2006 and ranked No. 415 on QR’s Top 500 list in 2006.
The Lifestyle Group got its start when Rick Horen, Geoff’s father, went through a “nightmare remodeling job.” Like many who have been through such an experience, they tend to wonder, “Are there any professional remodelers out there?” So Rick, an executive at Bank One at the time, decided to start a remodeling company devoted to improving the professionalism of the industry. Geoff, also an executive at Bank One, was onboard for the challenge and so was his brother and sister.
In his 20s at the time he transitioned from banking to remodeling, Horen says that everything he learned and experienced during his time at Bank One prepared him for a successful career in remodeling.
“I always tell people it is just a different widget. At the bank, we sold loans, or investments, or accounts — our widget varied. Here at Lifestyle, our widget is a remodeling project, sometimes a kitchen, sometimes an addition or a bathroom remodel. It is easy to learn about and understand a different widget. What is hard is making people understand why they should buy yours.”
Being newcomers to the industry, Horen spent a lot of his time researching and analyzing his new audience. “We used remodeling research from Harvard’s Center for Joint Housing Studies to create a ‘one stop shopping’ remodeling design center concept,” explains Horen. He adds by saying that around 95 percent of those that come into the showroom are sold.
This “one stop shopping” model also led Horen to explore being part of the buying group that helped improve purchasing power and strategic buying relationships. “Besides being part of the buying group, we also have developed relationships with suppliers/distributors to buy direct and eliminate the middle man.”
In addition to the many benefits the company offers to its clients, Horen explains that their vision of the company was not just on selling remodeling, but they want to sell the company and create a relationship with all of their clients. Even the name of the company was thoroughly discussed to showcase this vision. “The original name was Lifestyle Remodeling,” says Horen. “As we began to create the vision for the company, we wanted to infer something larger and more professional that could represent a company with multiple lines of business.”
The challenge and a main focus for the past 18 months has been building a brand around that name. Horen and team added a tagline of: REMODEL. REFRESH. RENEW. This new branding approach promotes “working with people to meet their fast-paced and ever-changing lifestyles.” The company has since simplified their logo and refreshed their Website, lettered trucks and redesigned its jobsite signs — all of these activities are focused on building a brand that the buying public can recognize and relate to.
Creating trust between remodeler and homeowner can oftentimes be quite difficult to do. To ease the pains of remodeling, Horen has opted to be open and honest about the ups and downs that the homeowner will go through.
“We have created an Expectations document that we share with the clients at contract signing that transistions from the joy of the contract signing process to the reality of expectations the client should have about the challenges of surviving the remodeling process,” says Horen.
“This helps create an open and trusting relationship before the project even begins.”
Lead tracking is another area where Horen has focused his time. “We utilize MarketSharp software to track every one of our leads,” says Horen. “We know the productivty of every lead source and annually evaluate sales dollars generated and marketing dollars spent for each lead source.”
Another important lead source for The Lifestyle Group is past clients. The company contributes to the Riley Children’s Hosipital on behalf of the referring client as a thank you, and it also allows the company to be a good corporate sponsor in the business community.
Always aiming to create a better relationship with past and potential clients, Horen says the company offers “the longest one-year warranty in the business.” He approaches this as a marketing expense to give the clients a reason to use us or refer us in the future. “If the request is ‘reasonable,’ we’ll go back and do things that we aren’t obligated to do — just another opportunity to build our level of customer service.”
Internally, Horen has strategically approached production staffing with a mix of talented in-house staff members who possess a variety of skills and a solid subcontractor base that he utilizes based on schedule needs and project duration or complexity. “Based on our particular business model, we also have a licensed plumber and professional painter on staff to meet the needs of our clients,” says Horen. “This also serves us in an effort to control the schdule and the quality of work our clients receive.”