As a means to seek and share different ideas and insights for today’s remodeling industry, Lebanon, Ind.-based Festool USA continues to host a series of round table discussions with successful remodelers from around the country. Moderated by Festool’s vice president of marketing Michael Williams, the most recent conversation included: Andrew Gregor of CG&H Builders in Celina, Ohio; Brian Drumm of Drumm & Associates in North Wales, Pa.; David West of Meadowview Construction in Hamilton, Mass.; and Anthony Schwaller of Paceline Construction in Elkhart Lake, Wis. Powered by Festool and published by Qualified Remodeler, we hope you find this discussion informative, insightful and useful.
Michael Williams: Gentlemen, thanks a lot for joining us. I suppose I’ll start by asking about this last recession. How have your roles as company owners changed? How did you get through this?
Andrew Gregor: As the recession rolled in, in 2008 and 2009 particularly, it was really slow and desolate for both new construction and remodeling. We weren’t bringing much part-time help in. We were only doing one or two little jobs, and we were happy to have those.
Brian Drumm: We’re probably in the same position as Andrew. We found ourselves, in the last couple years, taking just about everything that came in the door, even down to handyman work here and there, because it was a foot in the door to look around a home, and be able to talk with the people a little more, find out if they needed anything further.
AG: Brian, did some of those handyman jobs lead to a bathroom, kitchen or basement remodel that they had wanted to do for three to four years, but had put off due to the economy?
BD: Exactly. A few years down the line and a lot of these clients are feeling a little more comfortable about spending money, so they call us to do larger remodels. It turned out to be worth our while.
Anthony Schwaller: I focused on the business to differentiate myself. Rather than taking everything that came our way, I really tried to go back to my past clientele and let them know we’d be more than happy to do any small work they needed. But, more importantly, we keep a small office that operates 40 hours a week with an administrator. I think working on the business at that time is what really kept us afloat. Meanwhile, some of the smaller contractors weren’t able to get enough work flow to keep the income coming.
AG: I think really what you’re saying is, it isn’t just advertising dollars, but it’s networking.
MW: Could you talk a little about the quality of subcontractors compared to regular employees? How high is their quality and how dedicated are they?
David West: We weren’t the type of company to hire a kid out of school and train him to be an amazing carpenter. We started out with highly skilled guys, and we groomed them to fit our way of doing things. That’s not something that is easy to replace, and I think it’s very difficult to get somebody to buy in, have that company loyalty and have my back like I would if I was an employee.
AG: I agree; it’s hard to convey that through any sub. There are certain things that you care about and attention to detail that only you give, and you can probably convey that through an employee a lot better than a sub on some of that stuff.
BD: We’ve had some pretty good luck over the years with subcontractors, but it definitely has been a process finding the right guys.
MW: And how do you find them? How do you gauge someone when you’re hiring?
BD: It’s a tough thing. A lot of times I’ve used the subs either on an existing client, or I’ve used some of them on my own house, to see how they work first and try them out before I turn them loose on anything.
AS: As far as qualifying them in terms of their abilities at work, you know, per skill level and cleanliness, I ask them questions about some of the dust extraction that we use. I say, “Are you familiar with using ZipWalls or certain hand tools?” And when it comes to installations and certain procedures, I’ll ask them, “Have you ever used such-and-such implement before?” You can usually feel right away if they actually have that experience or not.
AG: Modesty is a big key. If they come out of the gate with a bunch of stories about how well they do stuff, and they’re the best in their business. They’ve been doing this for 20 years and that they don’t need to be taught anything, then most generally those are the guys that are full of it, and you can run away from them. You want confidence, but you don’t want arrogance.
MW: How do you diversify your offering, adapting to your clients’ needs, what they want?
DW: We’ve found that a lot of the jobs we were building had a lot of custom cabinetry and millwork in them. For years, we had subbed that out to different mill shops, and our clients are buying cabinets from other shops. So, we decided to open up our own cabinet shop. That was a slow and very expensive process, but we did it and I think it turned out well. We made a lot of mistakes, it cost me a ton of money at the outset, but it was a great learning experience and really helps us offer a lot of variety to our clients.
AS: We’re probably one of the only guys in our area that offers concrete counters. So we’ve got this real small niche that people know us in the area for. If they want that done they come to us. So it’s not so much that we have a way to diversify what we offer, it’s just that we find a way to give the client what they want.
BD: I keep my eyes open. If there are other items, like small and simple maintenance items, I just take care of it at no charge; just as something to give to the customer. If it’s something a little more substantial, I’ll tell the client I can do it while I’m there and save them some money with the efficiency of being in the house already. Adding some of these change orders helped out with being able to diversify and pick up a little extra business.
MW: Are there any tools that help you to be leaner and meaner?
BD: Over the last two years, we’re really invested in tools with dust-collection capabilities. It’s just something that we hated doing at the end of the day. Now, we just save a ton of time, and it makes our customers a whole lot happier.
DW: Yeah, I have to agree 100 percent. We’ve invested a few thousand dollars over the past decade on a negative air machine. It keeps our cleanup costs way down, plus it creates such good will with the customer.
AG: Dust collection is huge. It’s a factor that I never even considered five years ago. It was like, oh great, a sander’s got a dust port on it; I’m never going to use that. And now it’s one of my main focuses when I look at a tool.
AS: I have a number of Festool tools that are part of the dust collection system and other tools that I use personally. On site, it can be difficult to implement some of those tools sometimes, because my part-timers don’t know how to care for a sander that costs three times more than the one they’re used to. But man, from a sales proposition, dust collection is so important. The client will tell their friends about how clean we keep the site, and after a while, like culture, it starts to set in that we’re the cleanest crew around.
MW: So you’d agree that investing in proper tools is important for the long run?
AS: For repeatability, it’s just a lot easier. My guys were never outwardly excited about using the tools. They’d just do the job and not say anything. Now, they’re smiling, they’re laughing about how awesome the features are.
AG: I’ve always felt like I wanted to put stickers all over my truck, telling people how much I love Festool, but then the other part of me thinks that then people will just break into the van and steal them all.
MW: Let’s talk about the difficult clients, particularly during tough economic times. Have you ever had to step away from work because of the client’s attitude, or because the job would be unprofitable?
AS: That’s something I’ve struggled with. When the recession hit, I took a couple jobs [including one client in particular], which was just miserable about going after the spreadsheet, trying to get all the lowest bidders, and then forcing me to use these subcontractors. I learned a hard lesson there, so now I stick to my guns and will only approach it on a time-and-materials basis, within reason.
AG: It’s taken years to nip out those clients, and I’m better at finding them early on and avoiding them. But if you’re continuing to reach for those big kitchens, big baths, the ones you see in the magazines, it comes with the territory. You just have to learn how to deal with it. If you shy away from every client that may be difficult, you might not end up with any work.
DW: What I like to do is extend the interviewing process a little bit longer than most. I find if I can give my clients some homework, some assignments, then I can gauge their cooperation right upfront. If they don’t have the interest in calling my referrals, chances are they’re probably not going to end up a client.
BD: It happens quite a bit. You can get a feeling. And I would agree that you take some time with the people, and you try to get to know them a bit better, and at least they can give you a better gauge as to what they’re going to be like to work with.
MW: And lastly, now that we’re slowly climbing out of this recession, more people are building homes, having more work done, and so on. How do you retain that same sense of urgency, whether with yourself or your employees, that you had during the recession, when it’s make-or-break?
DW: My sense is, if your guys don’t have a sense of urgency now, they’re probably not going to have that sense of urgency when things get hot again. I push my guys, and it’s all based on the schedules I write.
AS: One of my favorite philosophies in any type of business is setting up a franchise prototype. Even if you never have the intention of franchising your business, just the fact that you have systems in place is the key to having freedom from your business and streamlines the job in good and bad times. QR