Survival and success in the remodeling industry takes a driving commitment. As Dennis and Glenda Gehman, owners of Gehman Custom Builder of Harleysville, Pa., experienced a few years ago, even strong companies face challenges that test the will of the owners. In 2000, the ailing stock market, coupled with the loss of a good sales employee (who incidentally took a competitive job a mile up the road) strained the company financially.
"We had a backlog of work to keep us strong through 2001 but struggled to replace the sales void that was left open when the employee left," says Dennis Gehman. "We kept the business going and plateaued. 2001 and 2002 were down a bit, and it forced Glenda and I to think about whether or not we wanted to continue as owners of a remodeling company."
They did want to continue. The Gehmans brought on an advisory board made up of three individuals to review the company’s financials and its business plan. The owners decided the way to succeed was to grow, and 2003 was a year of change.
To position itself for growth, Gehman Custom Builder made a number of hires in the latter months of 2003 and set an ambitious goal of completing $750,000 worth of work in the final quarter of that year.
Those additions included a full-time estimator to free up the sales staff to focus on selling; a communications position to concentrate largely on public relations and marketing; a second full-time salesperson that came onboard from a former competitor; and a designer brought in-house to allow the company draftsman to become the production supervisor, overseeing day-to-day scheduling and ordering. The company reached its goal in the fourth quarter of 2003, closing a total revenue of $1.8 million for the year. For 2004, Gehman is projecting revenue of $3 million.
One of Gehman’s best practices is its focus on client touches. The business plan calls for a minimum of six correspondences with each member of its existing client base to maximize referrals.
"We use quarterly newsletters, holiday cards, thank you notes for referrals, and if we see something that reminds us of the client, we cut it out or copy it and mail it to them with a short note," Gehman says. "Out of sight, out of mind. With these gentle touches, we’re just reminding them we’re out here."