Table of Contents November 2003

VIEW POINT

FIRST WORD

• 

  The Value of Remodeling: Refinancing Spurs Improvements

  As we went to press with our annual Cost vs. Value Report, homeowners were still investing in their homes at record rates. Despite a general slowdown in the national economy in the first quarter, the value recovered across all remodeling projects in the Report has jumped by more than 5% to 86.4%.

   

News + Notes

• Callers Beware

  After a flurry of court activity resulted in a brief delay, the national do-not-call list went into effect in early October. D.S. Berenson, of Johanson Berenson LLP, McLean, Va., a firm specializing in construction law, says that "date of last sale" is a fairly vague term, but to be safe, consider it the first date on any contract you sign for a particular project.

   

• Send in Backup

  It would appear that Americans are sick and tired of sitting around in the dark. Just one month later, Hurricane Isabel rocked the East Coast, knocking out electricity to millions of homes, for more than a week in some cases.

   

• He Knows The Drill

  A California electrician is lucky to be alive after accidentally impaling himself on an 18-inch chip auger drill bit.Unfortunately, Hunt landed face-first on the drill, and the bit went through his left eye and out the back of his head.

   

MARKET WATCH

• Mixed Forecast

  A weak labor market contributed to the Consumer Confidence Index dropping nearly five points in September, to its lowest level since March. Consumer plans to purchase major appliances dropped to the lowest level in a year.

   

COMMENTARY

LINDA CASE

• 

  Grow Yourself

  Here are four tendencies that work at some stage for business leaders but become Achilles' heels or weak spots as the company grows.

   

MARK RICHARDSON

• 

  The Power of Persuasion

  Over the years, I've made some interesting observations about the psychology of the homeowner decision process.

   

WALT STOEPPELWERTH

• 

  Design/Build It, and They Will Come

  The low-bidding contractor is usually awarded the project and the architect's pay -- 5% to 7% of the price of the job -- doesn't include job supervision.Lastly, many contractors -- or their most technologically astute employees -- design in-house, usually using a CAD program.

   

GUEST COLUMNIST

• Drive Down Costs

  When business owners want to increase the bottom line, they usually try to increase sales. Will you increase your bottom line faster by selling 10% more or by reducing your CGS (cost of goods sold -- labor, materials, and subcontractor services) by 4%?

   

YOUR BUSINESS

Ways + Means

• 

  Quick Read: The Management Flash Report

  When the management team at Kendale Inc., Jacksonville, Fla., wants to know exactly what's happening in the company, they take a look at the company's comprehensive Flash Report. Each area of the business works toward specific goals, so this report also provides an indication of how well the company is meeting them.

   

• Functional Form

  When Annette Greco noticed that her projects were going over schedule, she knew she had to take action. "I was hearing excuses like, 'The salesman didn't catch something,'" says the co-owner of Greco Remodelers Manassas, Va. "We wanted to create more accountability on the part of our production staff."

   

• Form an Alliance

  As the owner of a remodeling company, you're constantly harvesting relationships. But your relationships with the people you work with every day -- manufacturers, suppliers, subcontractors -- are just as important.

   

• Underpromise, Overdeliver

  Mike DiFabion likes to keep customers' expectations low and their satisfaction high.

   

BOTTOM LINE

• Tax Tips: Simple Recordkeeping

  Keeping scrupulous records often provides tax benefits at the end of the year.

   

• Accurate Reports

  Bill Patrick, of William J. Patrick, Bird in Hand, Pa., adjusts his profit and loss statement using a figure he calculates every month from his work-in-progress form. Because he sees this report monthly, it also allows him to take care of problems in a timely manner.

   

Sales & Marketing

• Sales School: When to Talk Price

  I suggested that I tell him about the company anyway, so that he (or a neighbor) could consider contacting us if he changed his mind, and then I did a 15-minute presentation.Guy Marzano is a sales rep with Case Handyman Services of Golden Valley, Minn. In his first month of commissioned selling, he made six sales on 20 calls, some results still pending.

   

• Quickie Online Marketing Materials

  Yellow Steel, a Portsmith, N.H., marketing firm, has launched www.wenailit.net, a Web site that offers contractors a chance to create direct mail, doorknob hangers, jobsite signs, and other marketing materials at reasonable cost.

   

• "Auditing" Your Market

  A 10-page audit from his company covers marketing strategy, organization, system productivity, advertising, price, competition, and other considerations.Wentworth now has a month-by-month marketing plan that includes direct mail, mailings to specific areas around the jobsite, advertising, and Web site promotions.

   

• Picture Perfect

  Taking project photos, especially in tight interiors, is tricky. Good digital equipment makes it easier to shoot in natural light.

   

FIELD NOTES

• Material Goods

  Several remodeling associations hold yard sales to clear out new and used building materials and improve community relations. The Oregon Remodelers Association, the NARI Tampa Bay chapter, and the Idaho Remodelers Association all host sales to raise money for their chapters or for charity.

   

• Freedom and Responsibility

  The lead must know where the job stands at all times, especially as it relates to labor and materials. This information should be constantly updated to allow him to make good decisions about how to spend the remaining money in each phase.

   

BY DESIGN

• 

  Wallternatives

  Ever wiser about modern design trends, homeowners often want to add bright, open space to their homes. Rather than enclosing this bedroom suite's dressing room with a wall and single doorway, Jacksonville, Fla., remodelers Kendale Inc. partitioned the space with a custom built-in headboard.

   

Tech@Work

• Selection Central

  Selection Master, a recently developed Web-based application, is designed to organize, track, and share product information. Essentially an online file cabinet, Selection Master provides a central location for storing all the loose bits of information about the products you're installing on a project.

   
• 

  Pre-Sale and Post-Sale

  Last month we distinguished between pre-sale estimating and post-sale estimating. It's an important distinction, but there are estimating products, developed specifically for remodelers, that handle both.

   

GOOD FORM

• Good Form: Get the Lead Out

  Tim Englert doesn't have time to sift through each of the 400 leads his company receives every year. The owner and main salesperson of Tim Englert Construction in Wadsworth, Ohio, says that in the long run, inaccurate information and poor lead quality will be a "tremendous drain on your time and ability to earn income."

   

FEATURES

• Clients Bugging You?

  Some clients use your own policies and practices against you.The following field guide identifies species, habitats, food, characteristics, and warning signs.Roger Howard of Joe Howard Construction recalls a homeowner telling the designer about her large vaulted ceiling.

   
• 

  Turning the Tables or, What I Learned as a Remodeling Client

  The project: Fitzpatrick converted her ranch house into what she calls a "Craftsman Nouveau" house in six phases of work over two years. The design: Fitzpatrick is the lead designer for her company, so it was only natural for her to design her own house.

   

Before & After

• 

  Before & After: Good Neighbors

  When architects and business partners Chris and Trula Remson were looking for office space for their growing firm, they wanted to be part of the revitalization of downtown Baton Rouge. Finding a building that would showcase their work, fit their budget, and offer them space for 12 employees was a challenge, but they eventually found what they were looking for in a nondescript building on a main street in the Beauregard neighborhood.

   

Cost vs. Value Report

• Cost vs. Value 2003 - Major Kitchen Remodel

  Major Kitchen Remodel Project Description: (MIDRANGE) Update an outmoded 200-square-foot kitchen with design and installation of a functional layout of new cabinets, laminate countertops, and standard double-tub stainless steel sink with standard single-lever faucet. Include energy-efficient wall oven, cooktop, ventilation system, built-in microwave, dishwasher, garbage disposer, and custom lighting. Add new resilient floor. Finish with painted walls, trim, and ceiling. Include 30 linear feet of semi-custom wood cabinets, including a 3-by-5-foot island. The national average cost of this project is $43,804. The upscale version of this project averages about a 79.6 percent return on investment. Read on to find out the average cost recouped on this project in your location.

   

• Cost vs. Value 2003 - Master Suite

  Master Suite Project Description: (MIDRANGE) On a house with two or three bedrooms, add a 24-by-16-foot master bedroom suite over a crawl space. Include walk-in closet/dressing area, whirlpool tub in ceramic tile platform, separate 3-by-4-foot ceramic tile shower, and double-bowl vanity with solid-surface countertop. Bedroom floor is carpet; bath floor is ceramic tile. Painted walls, ceiling, and trim. General and spot lighting, exhaust fan. The national average cost of this project is $70,760. The upscale version of this project averages about a 76.9 percent return on investment. Read on to find out the average cost recouped on this project in your location.

   

• Cost vs. Value 2003 - Basement Remodel

  Basement Remodel Project Description: Finish the lower level of a house to create a 20-by-30-foot entertaining area with wet bar, a 5-by-8-foot full bath, and a 12-by-12-foot auxiliary room. Walls and ceilings are painted drywall throughout; exterior walls are insulated; painted trim throughout. Include five six-panel, primed hardboard doors. Main room shall include 15 recessed ceiling light fixtures and three surface-mounted light fixtures and snap-together laminate flooring system. Bathroom includes standard white toilet, vanity with cultured-marble top, resilient vinyl flooring, two-piece fiberglass shower unit, a light/fan combination, vanity light fixture, and recessed medicine cabinet. Bar area includes 10 linear feet of raised-panel oak cabinets with laminate countertops, stainless steel bar sink, single-lever bar faucet, undercounter refrigerator, and vinyl floor tile. The national average cost of this project is $43,865. Read on to find out the average cost recouped on this project in your location.

   

• Cost vs. Value 2003 - Family Room Addition

  Family Room Addition Project Description: In a style and location appropriate to the existing house, add a 16-by-25-foot room on a crawl space foundation with wood siding and fiberglass shingle roof. Include drywall interior with batt insulation, prefinished hardwood floor, and 180 square feet of glazing including windows, atrium-style exterior doors, and two operable skylights. Tie into existing heating and cooling system. The national average cost of this project is $53,983. Read on to find out the average cost recouped on this project in your location.

   

• Cost vs. Value 2003 - Window Replacement

  Window Replacement Project Description: (MIDRANGE) Replace 10 existing 3-by-5-foot double-hung windows with vinyl- or aluminum-clad, double-glazed, wood replacement windows. Wrap existing exterior trim as required to match. Do not disturb existing interior trim. The national average cost of this project is $9,568. The upscale version of this project averages about an 87 percent return on investment. Read on to find out the average cost recouped on this project in your location.

   

• Cost vs. Value 2003 - Bathroom Remodel

  Bathroom Remodel Project Description: (MIDRANGE) Update an existing bathroom that is at least 25 years old. Replace all fixtures to include standard-sized tub with ceramic tile surround; toilet; solid-surface vanity counter with integral double sink; recessed medicine cabinet; ceramic tile floor; and vinyl wallpaper. The national average cost of this project is $10,088. The upscale version of this project averages about a 92.6 percent return on investment. Read on to find out the average cost recouped on this project in your location.

   

• Cost vs. Value 2003 - Attic Bedroom

  Attic Bedroom Project Description: In a house with two or three bedrooms, convert unfinished space in attic to a 15-by-15-foot bedroom and a 5-by-7-foot bathroom with shower. Add a 15-foot shed dormer and four new windows. Insulate and finish ceiling and walls. Carpet unfinished floor. Extend existing heating and central air conditioning to new space. Retain existing stairs. The national average cost of this project is $32,863. Read on to find out the average cost recouped on this project in your location.

   

• Cost vs. Value 2003 - Bathroom Addition

  Bathroom Addition Project Description: (MIDRANGE) Add a full 6-by-8-foot bath to a house with one or one and a half baths. Locate within existing footprint near bedrooms. Include cultured-marble vanity top, molded sink, standard tub/shower with ceramic tile surround, low-profile toilet, general and spot lighting, mirrored medicine cabinet, linen storage, vinyl wallpaper, and ceramic tile floor. The national average cost of this project is $15,519. The upscale version of this project averages about an 84.3 percent return on investment. Read on to find out the average cost recouped on this project in your location.

   

• Cost vs. Value 2003 - Siding Replacement

  Siding Replacement Project Description: Replace 1,250 square feet of existing siding with new vinyl siding, including all trim. The national average cost of this project is $7,329. Read on to find out the average cost recouped on this project in your location.

   

• Cost vs. Value 2003 - Deck Addition

  Deck Addition Project Description: Add a 16-by-20-foot deck using pressure-treated pine joists supported by 4x4 posts set into concrete footings. Install composite deck material in a simple linear pattern. Include a built-in bench and planter of the same decking material. Provide a complete railing system using either a matching system made of the same composite as the decking material or a compatible vinyl system. The national average cost of this project is $6,304. Read on to find out the average cost recouped on this project in your location.

   

• Cost vs. Value Report - Contributors

   

• 2003 Cost vs. Value Report - Section IV

   

• 2003 Cost vs. Value Report - Section III

   

• 2003 Cost vs. Value Report - Section II

   

• 2003 Cost vs. Value Report - Section II

   

• 2003 Cost vs. Value Report

  How much of the cost of a remodeling project can be recovered at resale? Our annual report samples current conditions in 35 markets.

   

BIG50

CLOSE UP

• Profile: Scott Strawbridge

  After Scott Strawbridge won Big50 in 1997 with then-partner Guy Rock, his company took another award, as Florida's twenty-second fastest-growing company. But the 280% increase in revenues -- from $600,000 to $1.68 million -- that got Scott Strawbridge Inc. of Wilton Manors on the fast growers list just about killed the company's namesake.

   

SECOND LOOK

• Second Look: Joe Zanola

  Most of the advice Joe Zanola (Big50 1988) got from consultants during his days as a remodeler was information he already knew. Now that he's on the consulting side, as owner of Zanola Company in St. Louis, he does his best to do more than what is traditionally thought of as "consulting."

   

SOLUTIONS

• Q+A: Get Ready

  I don't go on a sales call unless I know what the scope of work is and what the clients think it's going to cost. When we get a call, I usually direct them to our Web site and ask that they give me a call back.

   

FACE OFF

• Face Off: Should I accompany customers to a showroom or let them go on their own?

  So I give clients a deadline for selecting products and make them commit to getting it taken care of. Going with clients to the showroom allows me to ensure that the products they select will be appropriate to the design.

   

KITCHEN + BATH

DESIGN CLINIC

• Concrete Examples

  An online catalog showcases the many bath products that can be created from concrete. The Web site's online catalog (www.concretenetwork.com/bathroomproducts) shows how decorative concrete can be used for bathroom vanities, sinks, and tub and shower surrounds.

   

• Tile Tales

  The Tile Council of America offers the 2003-2004 version of its Handbook for Ceramic Tile Installation at a cost of $7. Download an order form for either version by logging on to the Tile Council's Web site at www.tileusa.com/publication_main.htm.

   

• Bridging the Gap

  Designer Iris Harrell created a light bridge for the shelf with two sets of lights: uplights, to show off the homeowners' collection of glass and ceramics, and downlights, to illuminate the island's work surface. The wood soffit looks deceptively simple, Harrell says, but it was difficult to hide the fittings and screws.

   

SPEC BOOK

• 

  Bath Lighting

  Alabaster swirled glass shading is still popular, but art glass and colored glass are popping up in unexpected ways. The Botanical Collection in the Delta Bath Match Series -- designed to match Delta Faucet Company's Botanical Bath Collection fixtures -- features seven interchangeable accent inserts in chrome, polished brass, white, green, red, blue, and orange.

   

REPLACEMENT

ROOFING

• 

  Full Timer

  A good sales manager can increase sales 20% -- but that comes from good management, not through selling that amount.

   

Windows

• 

  Show and Tell

  Selling wood windows calls for a different kind of marketing. Just ask Tim Murphy. About 95% of the work done by Tim Murphy Carpentry, Chicago, involves replacing windows. And not just one, two, or even 10 windows. Murphy shoots for jobs that involve a minimum of 50 openings.

   

PRODUCTS

TRENDS

• 

  Exterior Lighting Adds Value to Your Home

  Richard Lowrey of Coastal Landscaping Service, Santa Rosa Beach, Fla., a landscaping and lighting design and installation firm, encourages his clients to incorporate outdoor lighting into their landscaping undertakings.

   

• Taking the Hit

  These standards require skylights to undergo test procedures that are slightly different from those required for other fenestrations, and which are also different from Miami-Dade's procedures.

   
• 

  Cultured Stone Makers Create Custom Shapes

  Cultured marble is a less expensive alternative, and many homeowners find it just as attractive as natural marble.Roadrunner Custom Remodeling specializes in bathroom remodels and prefers using cultured marble because it is easier to install than natural stone or tiles.

   

Reader's Choice

• 

  Reader's Choice

  Remodeling firm Craftsman Construction frequently replaces windows in Charlotte's older homes, and using new windows that reproduce the traditional style and appearance of the original windows is critical, says Rem Rogers.

   

ON THE JOB

• 

  Handle With Care

  Here are a few things to keep in mind when moving, staging, storing, and installing glass.Every time you move a piece of glass, you risk breaking it.

   

IN FOCUS

• 

  Gypsum, Backerboard, and Underlayment

  Sheetrock Humitek gypsum wallboard panels resist moisture and mold, the maker says. Designed for use in interior applications, the panels measure 5/8 inch thick and come in 8-, 10-, and 12-foot lengths.

   
• 

  Rough Hardware Roundup

  Stud plate ties can be used as plate-to-stud and top plate-to-stud connections, providing increased flexibility, the maker says. The double stud plate design (Model DSP) can be installed on either or both sides of the wall.

   
• 

  Top Makers Out With New Power Tools

  The 12524-03 24-volt Cordless In-Line Hammer Drill is designed for use in light concrete, wood, and masonry applications and features a dual-mode selector with drill-only and hammer drill operations. The 6917DWDE 12V 3/8-inch Drive Cordless Impact Wrench features a compact design -- measuring 65/8 inches long -- and a light weight of 31/2 pounds.

   

LAST WORD

Benchmark

• Measuring the Market

  The REMODELING benchmark for marketing expenditures is 3% of annual revenue (August 1998), but the fact is most residential remodeling companies don't do any deliberate marketing at all. To complete the vicious cycle, the ambushed remodeler executes a half-baked emergency marketing scheme, which achieves marginal success at best, reinforcing the conviction that marketing is a waste of time and money.