The Design Builder's Blog

Guest Blogger:  Paul Lesieur is a 203K consultant/contractor and writer within our industry.  If you are interested in learning more about the 203K opportunity you can go to his  websites www.203kloanmn.com and 203kcontractor.  There you can also find some links to the HUD website where you can learn more.

Success Guide For Contractors Seeking To Do 203K Loan Work

To do a successful quote for a 203K loan you must write a detailed line item bid, you should do this anyway but what works best is to break out your costs.

Here are some examples of how to write specs into your bid:

• 1000SF of 3 tab asphalt roofing @ $1.26SF for materials is $1260 and $1.86SF for labor is $1860 to total $3120.00.
• Or remove old washer and dryer and install owner’s new appliances for 2 @ $120ea labor to install for $240.00.
• Remove 80SF of sidewalk and replace with 80SF of new concrete sidewalk @ $20.00 a SF = $1600.00

The better you detail the better chance you get the job and make money. On the Streamline 203K your bid is checked by the lender who likes to see details.   The bank will not accept a bid that says simply "Paint house $5000" or "Reroof house $8000". When I am the 203K consultant and get this kind of bid from a contractor I disallow it.

Successfully Pricing and Getting Paid When Involved With A Full 203K Loan Project

A full 203K loan uses the services of a 203K consultant. The consultant writes up a scope of repairs which always includes the minimum health and safety requirements of the FHA. After the minimum standards are called out the homeowner can add anything they want as long as their loan is approved for that amount.  NEVER do your bid before the consultant does the work write up, you will probably end up doing it again when the appraiser gets done. The consultant does a scope with prices attached and then you bid using his mandatory items and the homeowners’ desired items.

You the contractor then bid the job.

Pricing is what the market will bear.  I have thrown out bids that were too low, and occasionally items that were too high.  So charge what you need to be profitable and assume everything is negotiable just like any other job.

Your first draw can be called whenever you feel you want some money.

The consultant then inspects and approves your completed work. If you are installing vinyl windows at $1000 each and I get there and five are installed I will allow payment for five windows or $5000.  The five windows you say you will do after lunch don't count and the fact they are sitting in the living room means nothing to the bank. These draws (up to 5 are allowed) cost the homeowner $150 to $250 each, so we try to use them to the best effect.  If you run out of money consultants will do more draws but the consultant will get a check from you the contractor when he visits.

You will get paid!

• No payments are disbursed unless you show proof of permits.
• On a streamline 203k which is under $35,000 you will get 30 to 50% down and the rest after the project is complete. The Streamline 203K allows for 2 payments.
• The Full 203K which can go up to $365,000 or higher allows no down payments. This means you need to be strong enough to operate until the first draw.
• All draws are subject to a 10% holdback which is released 30 or 35 days after the last draw.
• It takes on average 7 to 10 days to get a check which is mailed to the homeowner with your name and theirs on it.

Change orders

Change orders are allowed and are most often used for upgrades by the homeowner or hidden conditions.  If you mis-measured you’re out of luck, HUD does not pay for your mistakes. Get detailed or stay away from these jobs.

This type of work goes best when you are part of a team that knows what they are doing and as a 203K consultant I find you can't always count on that being the case. Educate your buyer by being the answer person for their 203K.

Problems?

Problems that come up most often are inexperienced 203K consultants and inexperienced lenders new to selling 203K loans.

Also, homeowners who are first time home buyers who don't understand the difference between a $40,000 quote and one for $19,000 for what they think is the same scope of repairs. Educate your subs and clients and you will have fewer issues.

Regardless of the issues I have not had any problem large enough to make me want to leave this program. There is billions of dollars of work out there to fall under the 203K loan program and for any contractor willing to adapt a good opportunity is waiting.

How To Make The Ladder Of Opportunity Happen At Your Construction Business

Note: This is the last article of a 3 article series on this topic (Click for article #1 or for article #2)

Let’s use the example of creating a “Turnkey Business”

If you want a turnkey operation, which is one that runs without the need of the owner’s participation, the employees need to be self-motivated rather than motivated by the owner, their manager or short term measured motivation programs. Even if turnkey is not part of your vision, a single owner can’t wear all the hats of a continuously growing company. Vacations, health, and emergencies will at some point require the owner to delegate responsibilities to key employees.

Learn the “whys”

The best way to find out what will motivate team members is to ask them. While interviewing recruits or existing employees, find out not only what motivates them to grow, but also why. Connecting the “why” to the “what” can help get you, your business and that employee to where everyone wants to be much faster for two reasons.

1. The first is the simple fact that adults choose to commit and follow through on their goals for their own, sometime selfish, reasons.
2. Second, if the business, the marketplace or life changes at some point, knowing the why can help us find alternate ways to accomplish the long term company vision while still maintaining motivation.

 

Managing employee growth requires scheduled reviews

To help facilitate success support employee career advancement planning and implementation with a structured employee review process.  Be sure your review process identifies where the employee is today, where he or she is headed, and where you both expect them to be along their career path by the next scheduled review meeting. 

Generating a vision for where they will be is not enough

Work with the employee to identify the plan required to get there.  Include what the employee needs to do, as well as the company’s commitment and the necessary steps to help make it happen. 

Implementing a ladder of opportunity may require that the employee train and mentor his or her replacement.  Be sure the company provides "training of the trainer” early in each employee’s career path.  Education then becomes part of the company culture and facilitates constant growth among workers. 

Write down and maintain records of the employee review process.

Include in your record keeping not only the reviewer’s comments, but employee’s feedback about how well the company helps him or her to get there.  If your process includes writing down what has been agreed to at this review, both the company and the employee will know what to do between now and the next review.  You will also both know what you will be discussing at the next review.  This helps minimize the typical fears experienced by both the reviewer and the employee when anticipating the next review meeting and what they should talk about during the next review. 

If the review process is well thought out, properly documented and followed throughout each employee’s career, you have created a ladder of opportunity!

Related articles:

Article #1 of this series: Successfully Grow Your Business By Creating a Ladder of Opportunity For Employees

Article #2 of this series: How To Create A Ladder Of Opportunity For Your Employees

Government to Contractors: Start Hiring Convicted Felons!

Mentor Me, Please - Gen Y Business Owner Offers Peers Advise

Contractors: How To Work With Generation Y From One Of Them

Gen Y Member's Advice To Peers: How To Develop A Good Work Ethic

Hate Contractor Lead Generation Services?  "Rather than buy all your eggs, why not get some chickens?"

On discussion groups liked LinkedIn, contractors and remodelers have been bantering about on-line lead generation services.   It seems for every business owner who speaks negatively about using them, there is another who shares stories about how these services have been great for their business.  For the purpose of this blog post I won’t get into the pros and cons of or any specifics about one service vs. another.  Instead I’d like to offer an alternative; take control of your destiny and create your own leads.

What’s the problem?

In my opinion way too many contractors are abdicating their marketing responsibilities to lead generation services without a full understanding of how those services work.  Then they complain they don’t like how they work and or how they are being treated when they seek customer service to resolve problems.   Many others complain that the quality of the leads is very poor and or the same leads are being sold and distributed to way too many other contractors, increasing competition.  Still others complain about negative customer reviews that are libelous and the service won’t help remove them or go after the customer who posted them.  

Why should these business owners be surprised?  

Just a little research on the internet is all it takes to find out what many other businesses have already found; that’s how those services conduct business!

What is sad to me (and really ridiculous if you think about it) is these business owners are doing the same thing many remodeling consumers do.  They hire a service provider to take care of something for them without first being clear on what they expect, or, what they can expect will actually be included if they buy.   Then, rather than take responsibility for their own lack of due diligence before buying that service, they rationalize why it’s the service provider’s fault they are not happy and want their money back.  You can find lots of evidence to back up this reality by reading just a few of the articles on the“Dietz Angie's List and Yelp Reviews Lawsuit Updates” page of my web site.  The page is full of links to articles and blog posts about the nightmares many businesses have experienced with lead generation services.   It also has links to helpful information regarding what to do if you are already having problems with contractor lead generation services.

What’s the solution?

I suggest business owners work to generate their own leads.   Not saying they shouldn't also use a lead gen service, just pointing out that those services often have a history of changing their business model and many have gone out of business.  If your lead generation service leads go away, you might not have any leads at all unless you are creating your own leads as well. 

"Don't put all your eggs in one basket" 

Good quality leads for targeted customer and project types might well be the most significant factor when it comes to creating and growing a healthy and profitable construction or remodeling business.   Without a way to create a sustainable flow of high quality leads the business has to wait for leads to show up out of the blue.   If you wait for leads to happen, or for a lead gen service to send you leads, your business has little or no control over who will be inquiring for your services.   Also, you won’t know whether or not they are the right prospects for what you offer, how you perform your services and or what you have to charge to provide them.   Essentially, you might get leads, but after you get them you will need to still figure out which ones are qualified and which ones aren’t.  Prequalifying leads after they contact you, instead of before they contact you, wastes a lot of everyone’s time.  Think about it.  Are you and or your sales people visiting with people who would have disqualified your business if your business took control of how its leads were generated?

"Rather than buy your eggs, why not get your own chickens?"

Instead of the old outbound marketing methods of buying ads, buying email lists, paying for lead generation services and praying for good leads, consider the new wave in marketing; “Inbound Marketing”.  Inbound marketing focuses on creating quality content on your business’ web site that pulls people toward your company and product.   By aligning the content you publish with your target customer’s interests, you naturally attract inbound traffic that you can then convert, close, and delight over time.  If visitors to your contractors web site don’t like what they find out about your business and how you do business, they won’t call you or waste your time.  In addition to creating high quality leads, done well, inbound marketing can also help you increase the number and quality of referral leads from those customers you have delighted. 

When you own the chickens you know where the eggs came from, and after eating the eggs...

You still have chickens still laying more eggs!

How To Create A Ladder Of Opportunity For Your Employees

Note: This is the second article of a 3 article series on this topic (Click for article #1)

Look ahead to where you want to be

Creating a ladder of opportunity requires that you create a vision for where you want your business to go and how you will make it happen.  It also requires that you sell the vision to existing and recruited employees. Help them see the vision and growth plans of the company so they can see where they have opportunities to fit in and contribute to the growth as well as, at the same time, accomplish their own personal goals.

The Ladder of Opportunity strategy requires that you develop a career planning strategy based on a deliberate balance between how the company needs to grow and how employees envision their roles. For example, a designer who possesses previous field and production management experience will likely generate designs that are easier, more efficient and cost effective to build. Projects designed using such experience are also more likely to be consistently profitable.

Grow or get out of the way

If qualified employees do not see themselves as part of the evolution, you must either decide to keep them in their current roles, if possible, and/or realize that you will eventually need to hire someone else to fill future positions as the business grows. Be sure to seek out and retain the right people on your bus and take the wrong people off of the bus. Tolerating poor performance from some employees may give the wrong message to the more motivated workers.  

For smart employees, climbing the ladder of opportunity in a growing business means that someone else may be on that ladder rising right behind them.  Aspiring and high performance employees may become frustrated and lose motivation if they are held back in their career paths due any inability to climb the ladder of opportunity.  This being the case be watchful for the employee who tries to sabotage or hold other employees back as a way to maintain their status.

Managing career paths

Establishing employee career paths that benefit the business requires that you create a plan to Design/Build both the business and its employees. Decide where you want to take your business, what employee skills are needed to get there and how you will incorporate those abilities into your team’s existing pool of strengths.

To help manage the process of building employee skills, avoid mutual mystification. Clearly detail your vision and sell the goals involved to your team members.  Ask for a commitment for this required growth, both personal and professional, from each team member. Ask them how they see themselves fitting into this vision. Employees can choose to grow with the company, or, to be fair, perhaps they should be told that the company will out-grow them.

Be proactive with job descriptions

As an added caution, be careful not to develop job descriptions based on who you already have on the team. This would be like Design/Building a project for a client by only using the left over and miss-ordered materials that are collecting dust in your warehouse. How could you fulfill the purpose of the client’s project if you limit the design in such a way? Instead, Design/Build your business by creating job descriptions specific to your company’s vision and the path required to achieve it. 

If you are the business owner, create job descriptions for employees who will complement the skills you bring to the business.  This helps you to concentrate on what you are best at and/or prefer to do yourself.  If you plan to eventually give up certain responsibilities, keep an eye out for your replacement and include mentoring as part of that person’s career path.  Mentoring helps socialize the employee into the nuances of the already established norms and values of both the job position and the company.

Watch for the follow up to this blog (article 3 of 3) which will be titled "How To Make The Ladder Of Opportunity Happen"

Related articles:

Article #1 of this series: Successfully Grow Your Business By Creating a Ladder of Opportunity For Employees

Article #3 of this series: How To Make The Ladder Of Opportunity Happen At Your Construction Business

Government to Contractors: Start Hiring Convicted Felons!

Mentor Me, Please - Gen Y Business Owner Offers Peers Advise

Contractors: How To Work With Generation Y From One Of Them

Gen Y Member's Advice To Peers: How To Develop A Good Work Ethic

Free Webinar: Help For LBM Dealers Planning Contractor Education Events

One big win-win for building material dealers and their contractor customers is offering contractor education.  By helping contractors improve their businesses, and advance the trade skills of their employees, contractors can do more business and improve profitability.   If the contractor can increase the amount of business he or she does, the supplier benefits as well because that contractor will likely need to buy more products and services from the dealer.  Helping contractors grow their business is also a great way for LBM dealers to initiate and expand upon the creation of mutually beneficial relationships with their contractor customers.

For suppliers and manufacturers, planning a successful educational event for contractors takes a lot of work and time.   Many factors go into planning, promoting and executing an event that will provide value for the attendees, the dealer as well as any event sponsors.  However, if planned and executed correctly, educational events for contractors will not only attract attendees for the first time, the events should also make attendees want to keep coming back for more!

If you are a LBM dealer thinking about holding your first educational event, or want to improve results at your next event, consider attending an upcoming webinar I will be presenting on April 11^th, 2013 titled “Planning and Delivering Educational Events to Maximize Your ROI”  The webinar will be hosted by BuilderLink.

 Click here now to register for the webinar

If you are a contractor looking to encourage educational events at your lumberyard or supplier, consider forwarding this article to them.  By attending the webinar dealers and their staff can learn how to plan a great event, choose topics and speakers that will help you grow your business, and make sure the event will be fun and entertaining to attend.

Here’s a partial list of how attendees will benefit by attending this webinar

• Learn some creative ways to promote the event, attract contractor attendees and get them to show up!
• We will explore seminar topic ideas that can be beneficial and profitable for the contractors as well as the dealer.
• Learn several very important things to consider before choosing a presenter/speaker.
• Learn several ways to maximize the investment for the dealer and sponsor(s); before, during and after the event.

Other LBM Dealer Related Articles:

Lumberyard Ambassadors - Partnering With A Lumber Dealer’s Yard Staff

Understanding and Selling the Many Shades of Green

Guest Blogger:  Paul Lesieur is a 203K consultant/contractor and writer within our industry.  If you are interested in learning more about the 203K opportunity you can go to his  websites www.203kloanmn.com and 203kcontractor.  There you can also find some links to the HUD website where you can learn more.

203K Loans Mean Business Opportunities For The Right Contractors

A HUD/FHA 203k loan is an insured loan where one loan payment covers the purchase and remodel costs.  The 203K has been around for years and is by owner occupants to purchase, repair, and renovate a home.  Or, it can be used to refinance if you are looking to do a remodel on your existing home.

Learn about these loans and you can have another revenue stream for your business, and we’re talking major opportunity. I know one contractor who did 2 million in sales related to 203K last year and another who will do over a million in sales on just the203K work while still doing the high end kitchens he is well known for.

If you understand meat and potatoes contracting this is an opportunity, and the most successful 203K contractors are organized and detail oriented. The 203K requires patience and good communication skills and isn't for sloppy operations.

How to get 203K jobs

Best way to get going is to find a lender who does 203K loans, they are always looking for competent contractors.  Realtors can get you some leads also, and advertising like I do gets me very good results.  Just type 203K loans in your local search and see what comes up; those listings are your target.

There are two types of 203K loans

• The streamline 203K is a loan where you can do up to $35,000 in remodel or repair costs and it can include paint, carpet, furnace replacement, kitchen, bath and many other improvements. It is not allowed when structural improvements are needed.
• The full 203K loan allows structural work and just about everything homeowners want or need done. Luxury items are limited but not necessarily disallowed.

What contractors need to know about the 203K

This is a great loan with a lot of upside for contractors.  The money is escrowed and it’s insured so you don't have to worry about a homeowner gambling it away at the bingo hall Friday night.

For contractors to get 203K rehab work from home owners or buyers they must be approved by the lender offering the loan. This usually means a credit check naming a couple of suppliers, some subcontractor references, customer references , license and proof of insurance. Some banks also ask that you have cash reserves, but not all.

Watch for Paul's follow up to this blog titled " Here’s What’s Involved If You’re A Contractor Seeking To Do 203K Loan Work"

Videos About The EPA RRP Rule; RRP Information For Renovators

Back in 2010 when the RRP Rule first went into effect I completed a series of seven videos about the EPA RRP rule. The RRP videos were done for Remodeling magazine. They are posted to the Remodeling TV area of Remodeling’s web site.

The series is titled “The Insider's Guide to the EPA's Renovation, Repair and Painting Rule”. It covers critical information about the Environmental Protection Agency's RRP rule and certification process, and explains how the rule can or will affect your contracting business.

Below is a list of the videos, with a brief description of what is discussed in each one as well as links to view them:

Video One: The EPA RRP Rule and Your Business

This video covers the business responsibilities, associated liabilities and risks related to the RRP Rule. Kermit Baker, Senior Research Fellow at Harvard University's Joint Center for Housing Studies stresses that remodelers need to become experts in this area or leave the work to others who are. Attorney Mike Sams of Kenney & Sams, P.C. warns about the legal liabilities for failure to follow the regulations. Shawn McCadden discusses the firm and worker certification process, related fees as well as certified renovator and firm responsibilities.

Video Two: RRP Training

This video covers the worker training requirements of the rule and the content of the EPA Certified Renovator training class. Shawn McCadden also discusses the importance and benefits of choosing a training class conducted by a training instructor with real life renovation experience.

Video Three: EPA RRP Notification Requirements

The EPA RRP rule specifies certain notification requirements depending on where the work is done and who occupies and or visits the building being renovated. This video covers these requirements, related firm documentation requirements as well as the information and documentation that must be given to property owners and others. Shawn McCadden also discusses many of the important details that must be included in the required documentation.

Video Four: RRP Work Practices

This video includes a summary of the required lead-safe work practices required under the RRP Rule. Shawn McCadden walks through critical considerations related to the rule that must be followed to stay in compliance with the rule, protect occupants and workers and to control costs. Shawn also discusses interior and exterior cleaning and cleaning verification requirements.

Video Five: RRP Record Keeping

Inspection of the required documentation under the rule will be a major enforcement tool used by EPA. In this video Shawn McCadden discusses the required documentation related to worksite activities as well as many business administration activities. Mark Paskell of the Contractor Coaching Partnership shares a few of the many methods EPA will have at their disposal to inspect and verify a firm’s compliance with the rule. Shawn adds several more methods to Mark’s list and also discusses the penalties and fines EPA can assess on violators.

Video Six: Exemptions to RRP Work Practices

In this video Shawn McCadden gives examples of when, where and why the RRP rule and work practices are not required under the rule. Shawn stresses that even if the work practices are not required under the RRP rule, your business will still be liable if lead poisoning and or contamination results from the way work is performed. Shawn and contractor insurance expert Tom Messier of Mason and Mason Insurance both stress the importance of verifying proper and adequate insurance coverage to protect your business, available coverage options as well as related costs for coverage.

Video Seven: Business Considerations and Summary

Shawn Mccadden stresses that this new rule is a game changer. Shawn tells us businesses must take this new rule seriously and adjust their business practices accordingly to protect profits and control liabilities. Mark Paskell of the Contractor Coaching Partnership stresses that contractors should verify that the documentation forms they use will comply with the rule and also assist the business in managing and performing the work. Gerry McGonagle of Belfor Property Restoration offers his advice on qualifying the right employees to do the work. Shawn also discusses some of the new responsibilities the rule brings with it for employees in all positions within the business.

If You Don’t Or Won’t Offer Generation Y Prospects What They Want They Will Go Away

Generation Y is getting older, they’re buying homes and they are now starting to improve and remodel the homes they own.  As more and more of them grow older the number of Gen Y homeowners will quickly grow. Therefore, they will quickly become a major share of the potential prospects for remodelers and other contractors.  In an earlier blog about prequalifying and selling to Generation Y, I discussed the fact that members of Gen Y are used to getting information instantly and for free using key word Google searches to find internet content.   Technology and the internet have definitely defined how Generation Y does all their research and makes their remodeling or home improvement buying decisions. Having a contractor web site and what is put on it for information will make or break whether Gen Y prospects will be doing business with a remodeling contractor or not.

There are two ways to think about the title of this blog

First, if you don’t have a web site, or if your site doesn’t offer the information Gen Y is looking for, they won’t bother with your business if another remodeler’s business does.  Second, if your web site doesn’t explain how you do business as well as the kind of projects your willing to do, internet savvy gen Y remodeling prospects will move on. Remember, they’re probably not going to call you to find these things out. They’ll just go back to the Google search page and find another contractor’s site that does. So, if you want them to attract them and you want to motivate them to do business with your remodeling company you better make sure they find what they are looking for when they find your contractor web site.

“Knowledge is knowing a tomato is a fruit.

Wisdom is not using it in a fruit salad.”

What if you want them to go away?

Yes, you read that right. Not all Gen Y prospects will be right for a remodeler’s business. Their motivations to buy and what will be important to them may not be a match with what you offer, who you have on staff or how you do business. Working with the wrong customers can also compromise profits and might not be very satisfying for the business owner or employees. If you want to maintain a defined business process, and remain in control as you do business and produce your projects, you need to avoid working with customers who would probably be better off working with some other remodeling contractor.

To help Gen Y prospects prequalify themselves before they contact you (or for that matter prospects from any generation) make sure the content you put on your site has been strategically decided and written to serve this purpose. For example, if you charge for design services make that clear on your site. Or, if you won’t allow customers to provide any of their own materials make sure you discuss this fact on your web site. Conversely, to attract the right prospects, explain why you charge for design or won’t allow them to provide the materials.  Blogging is a great way to accomplish these goals.  Who knows, your logic might just discourage some prospects from wanting to provide their own materials or go with a contractor who offers free design!

Work towards getting them to stay

The point here is that if your web site visitors like your offerings and your logic you will attract them as prospects. If they don’t like your offerings and or your logic, they will go away and search for another remodeling contractor. Just be careful about how and what you write about. I’ll discuss that consideration in a future blog titled “Qualify, don’t disqualify your remodeling prospects”.

Related topics

Advice For Contractors When Working With Home Buyers Considering Renovations

Advice For Contractors On How To Work With Generation Y From One Of Them

25 Sample Questions Contractors Can Use For Prequalifying Prospects

How Contractors Can Make More Money, Faster and By Doing Less

With only so much time in a day, contractors need to maximize the revenue and or gross profit they earn each day in order to cover business overhead costs and contribute to their desired net profit goals.   Selling and producing more work is certainly one option to consider.  However, why not implement ways to increase the selling price and earn more gross profit without having to do any more work in the field or add anymore labor costs at the job site.

Options to consider

If you want to increase your sales volume and earned gross profit you can either produce more work or increase the selling price of your projects.  Here are a few things to consider:

• Producing more work at the job site means you will need more labor and the project will take longer.  Finding and keeping more employees busy can be challenging.    
• Increasing your selling price doesn’t have to be limited to raising the prices of what you sell.  Increasing your selling price can also be accomplished by increasing what is included in the selling price.
• Assuming you mark up everything you sell, if you find the right prospects and sell them higher price point products than you have used in the past, your average sell price goes up and the gross profit earned on each job goes up as well, without adding more labor or days to the project schedule.
• Also, consider that selling product options can be another way of increasing the sell price and earned gross profit, again without having to add any more time, do any more work or add any more labor to get the work done.

Here’s one example of what I am talking about 

At a recent Remodeler Summit event I participated in for Marvin Windows and Doors at their Warroad MN manufacturing facility, contractors learned about Marvin’s new option of prefinishing the interiors of their window and door products.   By selling this option to their customers, contractors can increase the cost of each window they sell by offering an additional service to their customers.  And, they can do so without increasing the production time of a window project and without having to add any additional on site labor to their projects.   The windows are prefinished at the factory, under controlled conditions and can either be prepainted or have a clear finish applied.   Because the prefinishing is done off site, all the mess of prepping and finishing is avoided, no extra job labor is needed and the smell of any finishing products is avoided at the job site.  Selling prefinished construction products can be a win-win, both of the contractor as well as the homeowner.  Selling prefinished products means more gross profit earned for the contractor without doing any more work.  The home owner benefits because more work is done in less time, with less mess and disturbance to their home and their daily lives.

Here’s one more example

At a tour of Reliable Truss and Components Inc., a division of National Lumber in Mansfield MA, I found out they offer prefabricated custom structures and components.  Using this service contractors can have components of their projects prebuilt and even prefinished in a controlled factory environment.  The components are then delivered to the contractor’s job site ready to install.   Partnering with a vendor who can offer this type of service helps the contractor earn more money by doing less work in several ways.  

• The contractor can earn gross profit on the labor as well as the product being provided by the vendor.
• At the same time, the contractor can be earning gross profit on the labor and the products being installed by his own crews while they get the project ready for installation of what is being built off site.
• Some vendors, including Reliable Truss, will also come prepared with the equipment needed and help your crew install the prefabricated and prefinished items at the jobsite.

It just keeps getting better!

Both examples above can help contractors earn more money in less time.   Both examples offer ways contractors can get more work done without having to add any additional talents or skills to their crews.  Both examples also eliminate or reduce the need to find and bring in sub contractors to do work the contractor’s own crews either don’t have the talents for or might not be cost effective at doing.

I bet more and more contractors will be thinking this way as the increasing costs of labor and the lack of available skilled labor puts pressures on their businesses and their profits.

How Should Remodelers Be Prequalifying and Selling To Generation Y?

A recent guest blog posted here at the Design Builders Blog was written by a Generation Y member.   The author, Mark Brown, offered some advice for contractors on how to work with Gen Y employees.   His blog created quite a discussion with over 38 thoughtful comments as of posting this blog from contractors and employees from all generations.   One contractor praised the blog and the discussion but also brought up another very valid consideration for contractors and remodelers: How to sell to Gen Y clients?  The answer to that question is probably a very big conversation and a very involved one as well. 

One thing is for sure.  Trying to force Gen Y to buy remodeling (or anything) the way you have always sold to other generations isn’t going to work.  That said how about bringing the answer down to a few simple but big picture considerations to help get the conversation started and offer some direction.  With a new direction in mind, you can then seek out and get the remodeling sales training you will need to sell to this new customer type.

If you can’t beat Generation Y, why not join them

The members of Gen Y are used to getting information instantly and for free.   Almost every one of them has a smart phone and can Google any subject or topic to find instant answers or information, all at no cost to them.   And they can get that information at any time of the day or night they want it.  That desire and internet content available about anything you can think of has definitely defined how Gen Y does their research and makes their remodeling or home improvement buying decisions. 

For contractors who have always sold to the generations born prior to Gen Y, the idea of providing instant and free information about a remodeling project for some young kid who isn’t ready to buy or make a decision without first checking you and your suggestions out online using social media throws a monkey wrench into any veteran contractor’s long standing selling process.  Those changes probably also all but kill a contractor’s sales closes rates when it comes to Gen Y remodeling and home improvement prospects.

“The reality to recognize is that Gen Y isn’t going to change.   So, contractors need to change how they both market to and sell to Generation Y if they want to do business with them.”

Save yourself a lot of time, give them what they want

If your construction or remodeling business doesn’t have a web site, stop reading right now or recognize and commit to the fact that you better get one up right away if you want to sell to Gen Y.  Done right, and it must be done right, a contractor’s web site  offers a place to give Generation Y, and any other generation for that matter,  the information they need to work through their decision making process and prequalify your business as a good option for them to consider.  If you’re strategic and you put the right information on your site, you won’t need to waste your time doing live sales calls with someone who would never have bought from you anyway and or who isn't far enough along yet in their decision making process to make any commitments that will include money.

What Information Should a Contractor’s website have on it?

Good question.  It has a lot to do with how Generation Y makes remodeling decisions.  I’ll offer some advice and suggestions on that topic in a follow up blog to be titled “If you don’t or won’t offer Generation Y Prospects what they want they will go away”