The Top 500: Bigger and Better

Specialty Firms Remain Strong

Despite tightening construction markets around much of the country, most remodeling firms that specialize in a few key areas are still going strong. In many cases, these firms are going strong because the new construction market is weakening.

“New building is slowing down in our area,” says Scot Hayes, owner of New York Sash in Whitesboro, N.Y. (No. 360). “But we’re seeing a corresponding “cocooning” effect where people are spending more money on their existing homes rather than building or buying new.”

Higher interest rates and rapidly rising energy costs are surely two of the main factors for the new construction slowdown. But many remodelers see the spike in energy and fuel prices as actually helping their business. Mike Lumary, a partner in Clearview Home Improvement (No. 157) in Anaheim, Calif., says a great majority of their clients are investing in energy-efficient upgrades on their existing homes because the cost of buying or building is skyrocketing out in Orange County.

“Because property is so valuable out here, people are continuing to put their money into their biggest investment,” says Lumary. “They have no apprehension about continuing to invest in their existing homes.”

Unfortunately, not everyone is enjoying those same conditions. Like many remodeling firms in parts of the Midwest, Wrightway, Inc. (No. 494) out of Fond du Lac, Wis. is reporting a continuation of a slowdown that began at least a couple years ago. President and owner David Wright says his company has shown a loss “for the last few years,” despite increased investment in marketing. “Our siding division is our slowest right now,” says Wright. “Window replacement is plugging along pretty well, and that’s what is saving us right now.”

Challenges

Kenneth Sekley, president and COO of Patio Enclosures, Inc. (No. 4), sums up the situation for many remodelers across the country when he talks about his company’s recent business. “We feel good that we’re running a bit ahead of last year, but we’ve had to work harder to grow.”

Patio Enclosures is headquartered in Macedonia, Ohio, but they have divisions and perform work across the country. He attributes his company’s recent success to smarter investment in marketing and better lead generation. “We’re regionally specific as to how we allocate our marketing dollars,” says Sekley. “In the New York metro area, TV is very expensive, but in the Southwest, it can be very cost-effective.”

Hayes says his company’s conversion from telemarketing has been a challenge, but it has been for the best. “We now do local and regional home shows where we can sign people up for permission marketing. That’s given us much stronger leads and better results overall,” he says.

Lumary has changed his marketing approach as well because he sees increased competition in the window business as a challenge in his market. “That forces us to be more innovative to set us apart,” he says. “Customers are becoming more sophisticated and educated about materials and components, so we’ve stepped up our level of sophistication, too.”

Lumary says his salespeople are having good luck with laptop presentations in prospective customers’ homes. The key with this approach is to have all the necessary catalogs, samples, previous job photos and other materials with you at the presentation. “We also offer them some sort of discount if they hire us then and there to try and discourage them from going out and getting other estimates,” he adds.

And of course there are still the familiar challenges that remodelers across the country have been facing for several years: staying on top of regulatory changes and evolving codes and finding and retaining quality employees. But skilled labor is no longer the only scarce prospective employee — now it is middle management and salespeople who are in high demand.