The Design Builder's Blog

Checklist of What LBM Dealers Will Need To Do To Get Ready For Gen Y Contractors

Back in February I did a presentation at the NRLA LBM Expo titled "Will Your LBM Business Be Ready For The Next Generation of Contractors”.  At that seminar I shared my thoughts about what LBM dealers and distributors need to consider about Generation Y members who will soon take over as the next generation of contractors.  I estimate that Gen Y will become the majority of construction business owners within the next ten years.  Although a handful of attendees already had Generation Y contractors on their radar screens, the rest of the attendees admitted they had no idea regarding the significant changes their businesses (or their employers' businesses) would need to make to be ready to sell to and service this new type of contractor.

If like many of the attendees at that event this topic is new to you, check out this blog post titled “Will LBM Dealers Be Ready For The Next Generation of Contractors” for a little more insight before reading the checklist offered below. 

Checklist: What to do to get your LBM Business ready for Gen Y Contractors

Here are a few pointers for LBM dealers who want to get ahead of the curve and be ready for Generation Y before they are already the majority of construction business owners. 

• Learn who Generation Y is, what’s different about them and why they are different.
• Keep in mind that some Generation Y contractors will be tech savvy, but, more important, most will be tech dependent.
• Recognize that in addition to being your next contractor customer, they will soon make up the majority of your retail customers and your work force as well.
• Learn how, and the many reasons why, they will be using technology inside their businesses and will be expecting you to use it as well.
• Commit to what your LBM business will need to do to get ready for this new generation of customers and paying for the changes.
• Be realistic about the condition and effectiveness of your current marketing methods, sales methods and service offerings. 
• Recognize now that your sales methods and maybe even your sales staff will need to be replaced and the related changes will take years to put in place and master.
• Learn how to interact and communicate with Generation Y in ways they will respond to; using both technology and social media.
• Figure out what you need to do, physically and emotionally, so contractors can shop, price and buy from you via your web site.

Keep in mind this is only a partial list.

LBM Dealers and the distributors that supply Gen Y will need to make many changes to their business models and tactics.  In order to successfully complete and support those changes they will need to upgrade both their staff and their technology.  Here are a few quotes from Gen Y contractors that should help motivate both to get going before it’s already too late:

“A lot of the suppliers are represented by older men and most of those people are just not tech-savvy”

“For about three-quarters of our suppliers, we’re using them because of their customer service and account management.  If they’re not into electronic communication, it’s probably not going to work out very well”

“For us technology isn’t a nice thing to have, it’s a necessity.”

LBM Dealers, Will You Be Ready For The Next Generation of Contractors?

I hate to be the bearer of bad news; I’m really just the messenger.  Servicing and doing business with contractors is about to change dramatically, again.  That’s right, after the home building crash, if as an LBM Dealer you thought you had finally figured out how to get business from the remaining contractors, get ready, things are about to change, again! 

At the upcoming NRLA LBM EXPO in Boston I will be presenting a lunchtime seminar for LBM Dealers on this topic titled “Will Your LBM Business Be Ready for the Next Generation of Contractors?”  This blog will give you an idea of what the seminar will include.  I hope you can attend.

Many LBM Dealers struggled to make it through the recession. A good number of them stayed alive by finding better ways to service and sell to remodelers.  Savvy dealers quickly identified the unique differences between remodelers and builders.  Realizing the differences they changed things like their selling methods, pricing strategies and product offerings to capture needed business and revenue.   As a result many remodeling businesses enjoyed much better service and could offer their clients a greater variety of products and price points.  Dealers who did not make the changes, or didn’t make significant enough changes, ended up closing their doors and or were bought up by larger dealers.

The mindset of the contractor will be changing

One thing that remained fairly constant during this evolution was who the contractors were and how they did business.   For decades the majority of contractors operated their businesses as technicians.   They thought of themselves as contractors, not construction business owners.   The joy of building things and advancing their trade skills where the driving factors that made them who they were.   As a result of this mentality, and the fact that there was almost always way more work available than contractors to do it, they could command profitable prices.  And unfortunately, at the same time, they could also get by with poor business practices in the areas of sales, marketing and accounting. 

Now is the time to recognize almost everything in the residential construction industry we could assume to be considered the norm about contractors, the marketplace and doing business will be going away.  A new generation of contractors is rising to the surface.  This next generation won’t accept the old ways of doing things.  Get ready for Generation Y!

Here are several factors causing and or contributing to the coming changes

• About nine of every ten remodeling contractors go out of business within ten years of getting started.  That means the construction industry has a new generation of remodeling business owners about every ten years, regardless of other factors. 
• Employees who worked at failed firms often start their own businesses.
• Due to their age and physical abilities, a good number of baby boomer contractors will also be retiring.   Many of these businesses will either be led by the next generation of the family or will simply close up shop.
• Many “old school” contractors who operated on “low bid” will need to work until they retire, die or their bodies give out due to a lack of retirement savings.
• Many older contractors will end up working for more savvy younger construction business owners.
• The next generation of remodeling and construction company owners will come from members of Generation Y. 

They are tech savvy and ready to take on the world 

At about 80 million strong, Generation Y is hell-bent on changing the world and is totally impatient with outdated business models.   How they will do business and how they will buy what they need from LBM dealers will be dramatically different than what dealers have experienced from all previous generations of contractors. Use of technology, theirs and yours, will be the biggest factor.

Dealers and their staff will first need to recognize that this change is coming and that it will be significant.  Then they will need to learn about these new contractors and embrace the changes needed if they want to be ready for Generation Y as they arrive.   If not ready for Gen Y, like the “old school” contractors, LBM businesses will eventually end up closing their doors, seeking new leadership to survive, or be swallowed up by dealers who were the early adopters of new ways of doing business.

Will Drones Be Watching and Servicing Contractors In The Near Future?

Drones may soon become part of everyday life for contractors.  Depending on their purpose, drones could be a contractor’s helpful friend or his worst nightmare.   If your business has something to hide there could be danger from up above.  If you need a quick delivery a drone may soon be the method of choice.  Either way, you might want to make sure you have your hardhat on, both to protect yourself from falling items and to avoid an OSHA violation.

If you think my imagination has run wild check out the video below.   For about $1200 bucks you can get a pretty easy to use drone that will communicate with your IPhone.   I watched it and it got me to thinking about how contractors and others may use drones in the near future.   I encourage you to watch it and imagine ways you could use one for your business.  After you watch it check out my short list of likely uses for contractors, the government and even the vendors you do business with.  

Here are a few ideas that came to me after watching the video

Ways contractors might use drones

• Measuring the roof without pulling out a ladder.
• Check the condition of the chimney flashing.
• Jobsite fly around replaces the walk around to see how things are going.
• Create bird’s eye view before, during and after videos or photos of your projects to use for marketing on your website.

Ways vendors might use drones

• Fast delivery of that one joist hanger you’re missing so you can put the floor sheathing down and get the wall framing going
• The local print shop delivers the three copies of the plan set you need to apply for that building permit this afternoon.
• Your exterior products supplier sends a drone over your job site to measure the roof and then gets the materials ready for first delivery in the morning.

Here are a few ways the government might use drones to keep an eye on contractors.

• OSHA inspector uses it at a large development project to scan the entire site for violations.  Site conditions are all recorded on video and individual clips of each offense in action are included as part of the violation notice the GC receives.
• EPA can do RRP inspections at will.  The camera software in the drone has the ability to recognize ladders and the drone is programmed to only fly by homes built prior to 1978.
• Your State DEP sets up their drones to fly by all DEP sites to make sure all water management requirements are in place and any land clearing work completed doesn’t exceed what was approved.

Predicting the future or pure fantasy?

I first came across this topic in a discussion posted to LinkedIn by Alec Caldwell.  One commenter said Caldwell was "fear mongering" and suggested he get a grip on his imagination.  I disagree and think the uses for drones will only be limited by our imagination or government regulation.   We’ll have to see which one wins out. 

Here is one example where the government used drones to help convict a North Dakota farmer, claimed to be the first case of its kind.  

How about you?  Is this science fiction or can you imagine other uses for drones that would help and or hinder contractors?

3D is the Way to Be: The Future Of Construction Projects

Guest Blogger: Steven Clark is a graphic designer who transitioned to being a work-from-home dad last year, after his triplet boys were born.

Although we can use computer modeling, high-tension bindings, and cranes hundreds of stories high to build super-skyscrapers, construction technology has advanced less far than some might think. After all, the concrete we use today is a result of an invention dating back to the Roman Empire, one that the University of California claims lacked the strength of today's concrete only because our ancestors did not have reinforced steel. As we look forward to the future of construction, much will remain the same -- plans will have to be drawn, foundations laid, and so on -- but many new inventions will change how much time, effort, and resources go into a project.

Beyond 3D

As the movie industry races to develop three-dimensional blockbusters, the construction world has left the third dimension in the dust. The newest trend is one step further: four-dimensional planning, which allows a person to not only see the entire view of a building, but see it from every possible angle. This gives contractors the opportunity to see possibilities they didn't before, plan better for construction, rent any kind of special equipment they might need and plan for supplies and safety. The American Society of Mechanical Engineers reports a new type of paradigm known as BIM, or building information modeling. This paradigm is being used in computer development of construction, and engineer Richard Beattie claims it can boost the approval rate of designs up to 90% percent BIM allows the architect, engineers, and clients to view a building's depth in addition to its height and length.

Building A Better Brick

Bricks as we know them represent one of the oldest human inventions in history, with civilizations dating back over five thousand years having used dried mud and mortar to create buildings. Yet the basic stature of a brick has changed little since then -- until now. Architizer reports that ceramic bricks made by 3D printers may soon replace their traditional red counterparts, since these bricks can be created quickly on the spot with fewer materials, weighing less, and having greater strength. A honeycomb design makes these bricks better able to withstand everything from the weight of its neighbors to a gale-force hurricane. Bricks still need to be attached to everything from window sills to floors, however, and the rubber sealing mechanisms offer a new hope as well. Thermal-bonding rubber seals minimize heat loss when utilized as a bonding agent between composite or traditional bricks. This rubber bonds to ceramic as well as plastic, glass, and wood.

Is It Time For A New Way To Professionalize The Remodeling Industry?

Trade associations and even individual remodelers have been trying for years to improve the professionalism of the remodeling industry.  I’ve been involved in this effort myself now for over 20 years.  I definitely think all the effort has been worth it.  Not because I think all the effort has made significant improvements, I really don’t think they have.  Rather I think all the effort has been helpful in preventing the situation from becoming worse.   That’s my opinion from my perspective.  Your opinion may be different.  If it is please feel free to respectfully express it below in the comments area of this blog post.

Unfortunately I think our industry has become excellent at being mediocre.    

And, it appears, the majority of remodeling consumers have even settled on the fact that they will need to accept mediocre performance from their remodeler if they want to get work done on their homes.  Let’s face it; there is even a majority of home owners who literally care about nothing more than total price when they go about selecting a remodeler.  In my opinion most consumers spend more time researching options about the purchase of a television before they choose one than they do before choosing a remodeler.

Maybe we need to think about why consumers spend so little time and effort choosing the right remodeler.  

Has our industry not offered to educated consumers properly so they know how to differentiate between remodelers?  I think it has.  Let’s face it many good remodelers and the trade associations they belong to have been trying to do so for years and although all the effort may have been successful with some consumers, there are still plenty of illegally operating and poor quality contractors working on homes every day.  If consumers were not willing to hire them they wouldn’t be working.

I think it’s time for some radical tactics to change the situation. 

I’ll through a few out here to get the conversation going.  Feel free to offer your opinion on them or to offer your own.

Strategy #1

Unless there is skin in the game for the consumer on this issue why would they change their attitudes and behaviors?   Maybe we should make it mandatory that consumers only hire legal and legitimately licensed contractors for home improvements.  Also, why not make them responsible for the due diligence required to make sure their contractor meets these requirements.  And, if they choose to work with an illegal contractor, leave them on their own.   For example leave them no ability to take the contractor to court.  In fact, why not arrest and fine the home owner for hiring an illegal contractor?

Strategy #2

How about before any real-estate is sold why not require a comprehensive inspection and inventory of the home be done?   By doing so we could document the condition and configuration of that property.  The next time that property is sold, the same inspection should happen again; plus any changes in status should be identified and listed.  Then the property owner should have to provide proof that any work done that required a building permit and final inspection sign-off was actually obtained.  If it’s a pre 1978 home all required RRP paperwork must be provided as well.   If any of this can’t be provided by the seller, the property can’t be sold.  And, if such information cannot be provided the entire property must be brought up to current building code standards and be dust wipe tested for lead paint contamination before it can be sold.

The likelihood of implementation of the two scenarios I offer above is slim to none

I’m sure everyone reading this would have their own reasons why.  Current politicians would never support such strategies because if they did they would never get reelected.   If all home owners had to pay the full legal price of home improvements the majority of Americans could never afford to own a home and homes would probably never become an investment.   I all contractors had to be legal the majority of current contractors wouldn’t do it, many probably couldn’t dfo it.

Reasons or excuses?

To me it seems that all the reasons why we can’t professionalize and legalize the remodeling industry are really just excuses. Because our industry doesn’t have the guts to do it, often for selfish reasons, it will likely never happen.  

If we don’t do it ourselves we may be at the risk that the government will try to do it and force it upon us.   Just think about the RRP rule if you don’t agree. 

And, if this home buyer who bought a flip gone wrong gets his way we might all regret our industry didn’t take our destiny into our own hands…

What say you?

NARI Sends Out Call To Action To Members and Other Remodelers Regarding RRP

Recently I received an email from Bruce Case, chairperson of the NARI Government Affairs Committee.  In the message Bruce put out a call to action to get NARI Members to send a letter to their representatives in support of the recent amendments to the RRP Rule.   I asked Bruce if contractors other than NARI members could join in and help out.   He encouraged that support, so with his permission I am sharing this call to action with you.  I hope you will consider adding your voice to this call to action.  Feel free to share this with other contractors you know and encourage them to participate as well.

I have mailed letters to my MA representatives; I hope you will do the same.

Here is what Bruce and NARI is asking you to do

If you have not already done so, there is still time to send a letter.  Just follow the instructions below.

Copy the text from this letter onto your company letterhead.
Modify the letter to address your representative. To find your representative, type in your address to this Website.
Describe your company in the highlighted areas of the letter.
Print the letter and sign it.
Fax a copy to the representative's office, also found on this Website.
Fax or e-mail a copy of that letter to NARI National office, (847) 298-9225 or marketing@nari.org.

Background:  

U.S. Rep. Tim Murphy (R-Pa.) introduced H.R. 2093, the Lead Exposure Reduction Amendments Act of 2013. Similar to the Senate bill introduced in March, this bill would:

• Restore the opt-out provision to the EPA's Lead Renovation, Repair & Painting (LRRP) rule.
• Prohibit the EPA from expanding LRRP to commercial and public buildings.
• Provide an exemption for renovations after a natural disaster.
• Suspend LRRP if the EPA can't approve a commercially available test kit that meets the regulation's requirement. 

 Why it's important for all contractors to participate:  

• The introduction of this bill keeps the pressure on the EPA to enforce the current LRRP regulation.
• This bill keeps legislators focused on the EPA's struggle to implement the LRRP rule, which will prove important as the EPA examines extending LRRP to commercial construction.
• 92% of NARI members asked NARI to support legislation that reinstated the "opt-out" provision last year. 
• To date the EPA has fined only 36 firms under LRRP.
• Remodelers need a seat at the table with the EPA -- let's continue to put pressure on the EPA rather than being a "victim" to their regulations and lax enforcement.

 "We must hang together, or surely we shall hang separately"

Benjamin Franklin

New Business Owner Offers Perspective Regarding Reputation Of Construction Industry

Guest Blogger: Randy Strauss is a new handyman business owner trying to find his way in the age of social media and 30 minute pizza delivery.  When he is not repairing other people’s homes, he tries to find time to repair his own.

As a consumer, I preferred to do everything myself rather than hire someone to do it. There are times when I’ve hired people to do work when I didn’t have the necessary skills and sometimes it was just cost effective to have a crew do it in a day or two when I knew it would take me a week doing it by myself.

Most of my experience with contractors has been from a consumer perspective. Those experiences have run the gamut of “outstanding” when jobs were completed in the blink of any eye and a minimum of dust to “outrage” when an HVAC contractor told me to go “F” myself when I asked him to honor his one year warranty.

In November of 2012 I was unemployed and carpet bombing every job ad in sight was exhausting. So, I decided to start a handyman business. My experiences using contractors motivated me to do so because I saw an opportunity needing to be filled.

Using What I Learned as a Consumer

Now that I’m working in other people’s homes, I can use that perspective to manage my clients’ expectations, perform work that meets my standards, and finish the day satisfied that I do good work. When I’m not working, I do research to better myself as a business owner and contractor.

During this research, I read a few blog entries on this site regarding Chris Dietz’s lawsuit filed against a customer who allegedly posted libelous comments about his work on review websites.  The posts from fellow contractors were generally positive, but I noticed that supportive comments were conditional.  For instance, “…providing he’s telling the truth…” and “…as long as he’s honest…”

Regardless of the outcome of the lawsuit, which I understand may be ultimately fruitless; we are still faced with cynicism about our profession.

That is a black cloud of distrust hovering over our industry.  That sense of distrust has led us to lead generation review websites such as Angie’s List and Yelp.  When fellow contractors feel the need to put conditions on support for one of our own, it reeks of skepticism. 

I believe those doubts are founded in two fallacies:

1. The customer is always right.  No, they’re not.  They may have the right to decide the paint color or the tile selection, but when they ask us to remove a load-bearing wall because they want to “open the space” they are quite simply wrong. It’s our responsibility to educate them why.
2. Customers have a right to freedom of speech. They do.  But, that right is worthless without the responsibility of truth.  No one has the right to slander or libel another person.

To be honest, I’m terrified of working for that client that has nothing better to do than bad mouth my new found profession.  I hope I never meet them.

What can, should we do?

If you go to someone’s house to repair something that another contractor ruined, tell them to follow up with a complaint to the BBB. Follow up with that yourself.  By getting rid of the bad actors, we can ensure respect and trust in the future.  Perhaps a self-regulating entity might not be such a bad idea in light of the above.  So, my questions to you are these:  What can we do to improve the perception of our profession?  What would make the average consumer, and us at times, less likely to believe that a contractor ripped off a client? Doesn’t it make your blood boil that you are less likely to be trusted in someone’s home because profit happy thugs with hammers and a screwdrivers have ruined the reputation of our professionalism?

In Remembrance of Walt Stoeppelwerth: The Godfather Of Remodeling To Many

On February 18^th, 2013 Walt Stoeppelwerth passed away.  Walt was the President of HomeTech Inc in Bethesda, MD for over thirty years.  I have always been an admirer of Walt and all he did for me as well as our industry. Walt Stoeppelwerth's obituary only offers a small piece of what he did in his lifetime. 

During my early years as a remodeler I observed that Walt made many predictions about the future of the remodeling industry.  Those predictions included trends, challenges, shifts, business systems and methods of production.   Many of his predictions came true.  For a whole variety of reasons, other predictions may have been challenged by a lack of continuous development or adequate leadership within the industry.  Regardless, Walt kept beating his drum about what our industry needed to keep top of mind.  Until that is, he could no longer fend off the challenges of Alzheimer’s disease.

Walt help shape the Remodeling Industry

What I observed to be unique about Walt was that he not only predicted the future, he also participated in making it happen.  I suggest he was a visionary with a unique ability to identify, fully understand and solve existing as well as future challenges within the industry.  He would share his observations, speculate on the likely consequences if the challenges were not addressed, and suggest or predict the solutions he felt would address the challenges.   His brilliance was his ability to then create and provide the required solutions, and, through his consulting, direct others who wanted to participate in making the evolution happen.  

Although some feel such tactics might be self-serving, I disagree.  It is my opinion that Walt was a truly caring person who loved and gave his best to the industry, always willing to help people.  I think of him as a man who did and gave great things to the industry and the people he loved, and he found a way to be well paid while doing so.  By being well paid, he could afford to keep doing what he did and, perhaps more important, he kept getting better at it!  A good example for all of us to consider for our own businesses.

Walt was always up for a good debate about industry topics. 

Fortunate for me, I got to have many of those debates with Walt.  His purpose was never to prove anyone wrong or demonstrate his authority and knowledge.  Rather I observed his purpose was to always gain additional understanding and insight from others, so he could then use what he learned to complement what he knew and in turn offer better solutions to those he worked with.  I always left those debates with more knowledge and a greater understanding of each topic we explored.  In many ways he was a mentor to me.  I was and am still today honored to have taken his spot as a columnist for Remodeling magazine.

Carrying on Walt's example

From what I observed, Walt lived the value of continuous improvement.  His business model was not reactive to the perceived and often misguided needs expressed by remodelers and industry partners, but rather proactive in creating and providing the solutions and the guidance remodelers and industry partners really needed to improve and foster true success.

In summary, Walt had the intimate knowledge, insight, creativity, resources, contacts, relationships and solutions to change the industry and cause tremendous social benefit at the same time. 

When people feel better about themselves and their businesses, they listen and seek for more of what helped them. Additionally, many then share what they have and know with others with the hopes that they too will benefit.  Walt was a master at setting that example and making it happen for so many remodelers.

I am grateful for his example and for all I learned from Walt.   He may have left our industry, but he will never be forgotten.  I know many of you feel the same way.

Please feel free to share your thoughts and memories about Walt and what he did for you and your business.  I’m sure his family will be grateful to know.

Thanks Walt.