Staying Close to Home

The adage “have check, will travel” has traditionally never been more applicable than in the remodeling industry. Most remodelers find it hard to say no to highly profitable and interesting projects strictly on the basis of geography. But, with each increase in gasoline prices (now at over $3.10 a gallon and expected to increase during the summer driving season), more remodelers than ever are putting pencil to paper and telling prospects the bad news: they are geographically undesirable.

Don Katzenberger, whose roofing, siding and windows company, S&K Roofing, is featured on pg. 64, has drawn a liberal 75 mile radius around his suburban Washington, D.C. office for its service area. And it shows on monthly fuel bills, which have risen from $7,000 a month to $12,000 over the past 12 months. Not every remodeling company bills $15 million annually to support that kind of expense item, but on a percentage basis, remodelers everywhere are seeing their fuel charges rise similarly. That is why the small but growing ranks of remodelers who have long eschewed far-flung enterprises are feeling smarter than ever. At Qualified Remodeler, we need look no further than the past two Remodelors of the Year — Robert G. Bell of Duluth, Minn. and Randall Hall of Dallas — as prime examples.

In interviews with this magazine when he won his award from the Remodelors Council of the National Association of Home Builders in November of 2004, Hall cited mostly marketing reasons for his decision early-on to concentrate his marketing efforts on the well-heeled Park Cities section of Dallas. A former IBM executive, whose roots in the area are deep, Hall saw the wisdom in sticking with his natural market base — people he knows and often sees socially. Through his participation with his local association, Hall cultivates ties with reputable remodelers who are willing to follow-up with prospects who call from outside his company’s 10 mile service area and vigilantly forwards those calls on. But beyond the market focus that a tight service area brings to their business, Hall also likes that he or a member of his team can move relatively quickly from job-to-job without losing time in traffic.

Like Hall, 2005 Remodelor of the Year, Bob Bell also chooses to service just the Eastern section of Duluth, Minn., which hugs the coast of Lake Superior east-to-west for 20 miles but runs no deeper than five or 10 miles inland. Bell and his team are currently doing a two-story addition less than five blocks from the company office. When the inevitable happens and they need extra supplies, it is a short trip over-and-back to his longtime distributor. Bell, who also only works one job at a time, likes that he can keep his team focused on doing their work and getting home each night, rather than wasting time with long commutes and long periods of downtime when supply glitches occur. Bell tells QR of a period several years ago when he considered a plan to specialize in only kitchens and baths. The deal killer was that it would have required casting a wider marketing net and taking on the hassles of a spread-out jobsites, says Bell.

But alas, a tight geographic market area is a luxury that only a few can truly make work, even in the current environment of spiraling gas prices. For specialty remodelers, like Katzenberger’s S&K Roofing, it simply takes a big area to feed a large and growing production-oriented operation. For S&K, the cost savings and efficiencies must come through other means. One option he is giving serious attention to is to open a new satellite office on the fast growing Eastern Shore of Maryland. The company could spread out and keep its staff and crews as local as feasibly possible.