ReNews -- Remodelors Council News - 07/17/2008 (Plain Text Version)

Lonny Rutherford, CGR, CAPS
NAHB Remodelers Chair
Farmington, N. M.

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In this issue:
More Home Owners Seeking Energy-Efficiency Upgrades
Deadline for NAHB Remodelers Awards on July 25!
New EPA Brochure Gives Tips on Lead-Safe Practices
Recognizing Remodelers for Strengthening Their Councils
Home Builders Line Up for Green Educational Designation
New Toolkit Spells out NAHB Green Options for HBAs
Save the Dates for Fall Board!
Save the Date for Remodelers Golfing in San Diego!
Remodeling Show Preview: Baltimore Sept. 10-12
Earn Designation Credits at the Remodeling Show
The 2009 IBS Registration Is Open
Save $25 on Hertz ‘Green,’ ‘Fun’ or ‘Prestige’ Weekly Rentals
Save 10% With Office Depot Large-Format Printing Services
Willams Scotsman Offers $1.99 First-Month Storage Container
GM $500 Private Offer: Easy as 1-2-3

Recognizing Remodelers for Strengthening Their Councils

The part of a continuing series that profiles members of local NAHB Remodelers who are strengthening their local councils through networking and recruiting new members by participating in the 7 in 07 program.

Gordon Neu

Neu Construction, Inc.
Lakewood, Wash.
Master Builders Association of Pierce County

Home remodeler Gordon Neu admits it: he’s not shy.

A 30-year veteran of the industry, Neu’s a strong believer in the need of belonging to an HBA — in his case, the Master Builders Association of Pierce County. He’ll recruit members anywhere and everywhere — including, he says with a laugh, the county dump.

“These two guys were unloading their truck,” he recalls, “and I didn’t recognize their company name. I walked right up and asked, ‘Are you members of the MBA?’” When they said they weren’t, Neu didn’t miss a beat: “Why not?” he asked, and soon had two more recruits. For Neu, asking strangers about membership in the MBA is as natural as breathing. “You could say I’m a little forward,” he jokes, “but my age [he notes that he’s pushing 70] gives me a lot of latitude.”

Old Enough to Know Better

With one full-time employee, Neu oversees the residential remodeling side of his company’s business, while his son handles the commercial side. He loves what he does, and has no interest in retiring. “I occasionally still do some design, or work with my designer. I also like the interaction with clients. I admit it, I’m a control freak.”

Over the decades, he says, he’s found that one of the keys to success is selecting the right clients. “You learn the hard way that certain clients just aren’t a good match. Not that they’re bad necessarily, they’re just not right for you.”

To be a happy and successful remodeler, Neu says, “You need to be part builder, part psychologist and part marriage counselor. And you need to trust your gut, and look for the warning signs.” By way of example, he cites a recent large job he turned down. “It was big: the window replacements alone were more than $100,000. But one night, my stomach let me know there was a problem. It dawned on me that in all my discussions with the client, I’d only been speaking with the husband, and never the wife. The next day, I told them I’d become too busy to give their project the attention it deserved — and a huge weight was lifted off my shoulders.”

Committed to the Association

Neu joined MBA Pierce County five years ago and got involved in the Remodelers Council, of which he eventually become chair. He’s helped the council grow significantly — and today, more than 140 people attend its meetings. Some time ago, Neu also joined MBA’s board, a role he enjoys greatly, and in addition, he serves on the Remodelers Council of his state association, the Building Industry Association of Washington.

Incredibly, Neu says that before he joined MBA, “I was a loner, and thought I didn’t need anyone. What propelled me to join was when I learned about the Return on Industrial Insurance Program that paid a big rebate on L&I premiums if you belonged to Master Builders. The first year we got a check for about five grand.” Since then, he’s become a big believer in the many other reasons for belonging, and has become one of the organization’s most assertive — and successful — recruiters.

Todd Newman, CAPS, CGR, CGB, GMB, CGP

President, Newman Company
Riley, Ind.
Home Builders Association of Greater Terre Haute

As the head of Newman Company Inc., Todd Newman oversees a staff of 14 and an annual revenue of $1 million to $1.1 million. Now in his 18^th year of business, Newman has not experienced much of a downturn in the remodeling market, despite the problems in the new home industry. In fact, he expects 2008 to be a strong year as well.

“Most of our clients are baby boomers,” he explains. “Their kids are gone, and they’re left with large houses that no longer meet their needs. We’re helping them add the features and amenities they need to make their homes more comfortable, such as combining smaller bedrooms to make master suites, adding ADA showers or heated floors, or other improvements. It’s very gratifying to help bring people’s dreams into reality.”

The Need to Learn

Newman is a strong believer in approaching remodeling as a true profession, worthy of all the time and effort needed for professional development and certification.

“Education is everything,” he says. “Most remodelers who go out of business don’t even see it coming. They may think if they’re out there swinging a hammer, they’re making money. But if they don’t understand their financials, cashflow needs, P&L statements and so on, they don’t know how to be profitable ... or stay in business.”

“What’s more,” he adds, “the industry is changing so fast, you need to stay aware not only about what’s available today, but also what’s coming. You have to attend trade shows, see what’s out there and meet the vendors. You may not use everything you learn — but at least you know what’s available.”

Another business strategy at the heart of Newman’s business is making sure his people build trust with customers and demonstrate respect. “You’re basically a member of your customer’s family during a project,” he observes. “You’re there all day — often, more than the owners themselves — you sign for packages, and may even get to know the kids. Customers trust us with their most valuable assets, so our people have to act accordingly.”

Running a Tighter Ship

Newman also oversees a variety of policies that help ensure that his team functions effectively and delivers maximum value. “We require drug testing of all our employees,” he notes, “to make sure that there’s not a dependency that could change their mindset and behavior.”

In addition, when Newman’s company is considering someone as a subcontractor, it requires that they be insured and bonded — and also that they are members of the HBA. “With all the support that remodelers and subcontractors get from our local HBA, as well as the state and national organizations,” Newman observes, “I don’t think anyone should get a free ride.”

Newman sets a high standard for performance, and it permeates his company. “No matter what our standard is,” he explains, “I believe we can always raise our level of quality. Once you stop improving, I really think it’s time for you to get out of the business.”

Jimmy McKinney

President, J&R Construction Services
Wilmore, Ky.
Home Builders Association of Lexington

Jimmy McKinney first hung out his shingle in 1996, building decks and porches. Seven years later, equipped with $700 in cash and a credit card with a $4,000 limit, he and a partner launched J&R Construction Services. The first year was so challenging, McKinney says, that only prayer helped them through. The company quickly began to expand its services and the next year, McKinney bought his partner out.

Today, with six employees and a robust and growing client list, McKinney is focused on maintaining a balance between financial success, family and a passion for the work. Despite the economic headlines, McKinney is generally optimistic. “Last year we were 40% under where we projected we’d be,” he observes, “but as of June 2008, we’re 60% up from the same time last year.”

Strategies for Success

One of the steps McKinney took three years ago was joining and getting involved in the Home Builders Association of Lexington (HBAL). Within a year, he joined the organization’s membership committee — and was soon persuading others to join the association.

McKinney’s recruitment secret? “I just like talking with people,” he says. “I’ll burn up anywhere from 3,000 to 5,000 minutes a month on my cell phone. When you’re involved in an organization like this, it just becomes part of your normal conversation.” He’s a true believer in the value, noting that in addition to what he’s saved on insurance, vehicles and computers, the continuing education has helped in a big way. “If I don’t stay up to date on the latest trends and what I can do for my clients,” he explains with a laugh, “I’d just be another guy with a ladder in the back of my truck.” Another aspect of his involvement with HBAL is his membership on the Remodelers Council, where he’s working to encourage more open sharing of resources and solutions and serves on the Executive Committee, along with other efforts.

McKinney’s largest business challenge, similar to that of many other small companies, is cash management. To boost cash flow and improve customer satisfaction, McKinney and his staff are about to unveil a new service offering: home maintenance contracts. “We’re in a unique point in history,” McKinney explains, “with four generations living and working together. One of the areas of detail my staff and I took a lot of time to work through was tailoring service arrangements and pricing structures that would appeal to traditionals, boomers, gen-Xers and gen-Yers.”

Core Values

McKinney believes there are four essential values to running a solid business: passion, persistence, desire and hard work. He also emphasizes the importance of hiring people who truly buy into his business approach. “I always ask people to talk about their passions during interviews. If we’re not a good fit, I’m not doing them any favors by hiring them, or vice versa.”

Asked where he wants to be in five years, McKinney has revenue goals in mind, like most business owners. But just as importantly, he adds, “I want to be sure that we can answer three big questions: What are we passionate about? What can we be the best in the world at? What is our economic denominator, or profit potential? Once we can answer those questions, we can just start driving the bus.”

Josh Dunn

President, Premier Media Group
Tacoma, Wash.
Master Builders Association of Pierce County and Olympia Master Builders Association

Josh Dunn is a strong advocate of giving back to one’s community … and through his involvement with the Master Builders Association of Pierce County (MBAPC) and Olympia Master Builders Association (OMB), he’s constantly finding new ways to do so.

As the founder and entrepreneur behind Premier Media Group (PMG), Dunn heads up a multi-faceted publishing company that produces local magazines for Western Washington, that include 425 and South Sound magazines, with a collective readership of more than 100,000. One of the secrets of success for PMG has been developing a strong understanding of local communities, activities and culture — and as a result, serving as the leading authority on how to get the most out of living in the region.

Building Connections

Another key to his organization’s success, Dunn notes, is building relationships with the local business community, including specific industries such as building and remodeling. In fact, within a year and a half after PMG opened its doors, Dunn joined his local home builder associations, and has been heavily involved ever since on a number of councils and committees. “Being active in these associations,” Dunn explains, “has definitely increased our capacity to build relationships.”

Dunn believes that if something is worth doing, it’s worth doing right — and he and his staff have dedicated a significant amount of time and energy to serving their builder community through the HBAs. For example, Dunn and his staff have been very active in the groups’ Remodelers Councils and membership drives. “Our overriding goal,” he says, “is to see the entire region be successful. The more we can help our fellow members get involved and connected with the resources they need, the better off we all are.”

In addition to magazine publishing, PMG provides its clients with services in design, brand consulting, custom publications and marketing. Consequently, Dunn and team can share a great deal of media and communication savvy to help their associations connect with members … and help connect members with customers.

Filling in Gaps

While Dunn may not know all the nuances of the remodeling business, that doesn’t stop him from connecting and sharing ideas with builders. “One thing that every business owner wants to know is how to run a better business, especially in the areas of marketing and communication, where they often are not as strong as they want to be. I can offer valuable insights and ideas in those areas, and I’ve built great some relationships as a result.”

Dunn also notes the need for increasing public awareness about the value of doing business with member builders and suppliers. “In building and remodeling, just as in other industries, communication and branding are ongoing challenges, and we need to constantly refresh our messaging to persuade consumers to hire our members. Reaching younger audiences can be especially challenging — and we stress that these days it’s not enough to just maintain a Web site; you also need to use additional channels and tools, such as blogging, media feeds, search engine optimization and others.”

Most of all, Dunn is driven by the need to give back to his community. “With organizations like MBAPC and OMB, what you get from them is directly linked to what you put in.” He adds that at the same time that he has increased his knowledge of the building and remodeling industry, he’s also introduced builders to new communication and marketing ideas that are at the leading edge of his own industry. “When you focus on adding to the community and building the brotherhood, the close business relationships will come — and for me, that’s the payoff.”

Rick Hjelm, CGR

Owner, Phase II General Contractor
Lakewood, Wash.
Master Builders Association Pierce County

Rick Hjelm’s remodeling business specializes in whole house remodels, kitchens and baths. With seven full-time employees, six of whom are in the field, Hjelm is a case study in the benefits of connecting with and learning from colleagues.

When he launched his business in 1978, Hjelm recalls his timing was perfect: “I was just starting to go after the high-end market, and when some of the leading individuals in that sector were retiring, I had a chance to hire a couple of guys who were great at their craft. I not only learned a lot from them,” he recalls, “but also picked up where they left off.”

A New Perspective on Competition

Over time, Hjelm also learned the value of sharing resources, ideas and solutions with other remodelors. “It used to be that you never shared information with competing remodelers — if something worked for you, you hid it, because it gave you an edge.” But the longer he was in the industry, Hjelm observes, the more he realized that when one builder went out of business, the rest of the industry felt the pain, because they started getting more calls than they could keep up with. “In our area, there’s more work than any of us will ever be able to do. We’re not all fighting for the same jobs, and actually, we seldom see each other.”

For these and other reasons, Hjelm says, the close relationships he’s made with other builders and remodelors though his association activities have been critical to his success. In addition, he notes, “the business changes so fast and the challenges are so great, that the only way to survive is to share ideas and solutions.”

A Natural at HBA Recruitment

As one of the winners in NAHB’s 7 in ‘07 membership recruitment campaign, Hjelm has a lot to say about the benefits of getting involved in one’s HBA. In fact, he explains, it wasn’t until he got involved in his local, state and national home builder associations that he was able to take his business to the next level.

One of his secrets to success in recruiting has been his passion for the benefits of participating in the HBA. “You’re much more effective when you put your time and energy into something you passionately believe in. Without that, you’re just selling.” When he urges colleagues to join, he stresses the importance of active involvement. “I always tell people that if you only show up at meetings and don’t say a word, you’re just wasting your money. You need to join a committee, get on a council or help with an event — only then people will start opening up to you.”

The year 2008 will be Hjelm’s 30^th year in business, and he says the anniversary feels a little strange. “It’s weird, because it’s just what you do … and one day you wake up and find you’ve been doing it 30 years.” Hjelm has arranged for his brother to take over his business eventually. “I’m making sure that when it’s time, I can leave on my terms, and have more time to enjoy life. That’s another thing we want to teach our younger colleagues: don’t do what we did. Start planning early.”