Last month in this space, I reviewed a series of market projections for 2014 from Harvard University as well as the industry’s leading associations.
Executive Insight: The Pros and Cons of Handyman Work
This month's Executive Insight answers a remodeler's question about whether or not a handyman division is a good idea.
It seems like everyone wants smaller jobs. Should we add a handyman division to take advantage? What are the dangers?
—Full-service remodeler, Georgia
Doing small projects can be a great way to service — and stay in touch with — past large-project clients, not to mention winning over new clients, stoking the referral fires, keeping crews busy and fueling cash flow. Ron Cowgill says the small projects division of his company, D/R Services Unlimited in Glenview, Ill., is “clearly what’s kept us alive during the past year and a half.” Mark Holliday of Trace Ventures in Atlanta reports that the company’s new small project division logged $358,000, or 20 percent of total revenue, in 2009; he expects that number to grow to $510,000, or 27 percent, this year. Steve Gray of Steve Gray Renovations in Indianapolis launched a small projects division in January 2009. He says, “Anybody who has a good remodeling business [should consider opening] a handyman division. The more time you spend with clients, the stronger the bond between clients and yourself.”
But before opening a small projects division, ask yourself two questions: Do you want to add small projects to your repertoire or true handyman work, such as maintenance and repairs? And what adjustments will you have to make to your systems and staffing to do the new work profitably and well?
Taking on small projects — scaled back versions of the remodeling projects you’re accustomed to doing — is much safer than diversifying into the handyman business. You’ll be tapping into your company’s strengths and modifying proven systems. In fact, Guy Semmes, co-owner of Hopkins & Porter, a design/build firm in Potomac, Md., advises remodelers to “go after [this work] as hard as you can.”
Handyman work is another matter. Says Semmes: “It’s a totally different animal.” Though Hopkins & Porter has run a handyman division since the mid-90s, Semmes urges contractors to think twice before opening one, especially during an economic downturn. The last thing you need is to stumble and disappoint clients, damaging your reputation and drying up referrals.
Handyman moves fast. Really fast. Handyman clients want the job done, done right and done now. “Go in and do what you say you are going to do,” says Gray, or you’ll fail. Your entire handyman team — office staff, crew, subcontractors, and suppliers — must be organized, detail-oriented and on schedule while maintaining the same standards of professionalism.
Most handyman crews work on an hourly basis and might do several projects in a day. You need a sales system that keeps the job pipeline full and a project management system that tightly controls scheduling. Handyman crews have to be multi-skilled and able to assess job needs accurately, generate reliable cost estimates and carry out projects on the spot. If you are not willing to let your crews do estimates, handyman projects probably will be too overhead-heavy to be profitable for you.
The small projects division at Macon Construction of Kensington, Md., handles jobs starting at about $20,000. Company co-owner Carl Mahany prefers these projects to handyman because they are controlled by a dedicated, small-jobs manager who visits every potential project site, prepares an estimate and oversees the work.
On the plus side, the management and standards that you as a general remodeler will bring to handyman projects are likely to be far superior to what most handyman-only companies provide. You can and should charge premium rates for this premium service.
Gray points out another bonus of doing small projects or handyman: visibility. “In the first six months of 2009, our trucks were all over town six days a week,” he recalls. Homeowners didn’t know what size jobs Gray was doing. They just saw that Gray’s company was busy.
Look for marketing opportunities at job sites, too. While in homes to do handyman work, Holliday says the team tells clients about the company’s other capabilities and areas of expertise that could help them, from design/build remodeling to aging-in-place home modifications to a TVA weatherization service Trace is certified to provide. As Holliday puts it, you want to be “light on your feet,” ready to take whatever jobs are out there. Make your company the one-stop shop for all your clients’ remodeling needs.
Corner Office: Father & Son Construction Surviving Through Small Jobs
Executive Insight: How to Tell It's Time to Bring Back Workers
Executive Insight: Radical Discounting is Business Suicide
|Wendy A. Jordan, CAPS, has more than 30 years of experience covering the residential remodeling industry as an award-winning writer and trade magazine editor. She’s the author of many books on residential remodeling, most recently “Universal Design for the Home” and a 2009 edition of “The Paper Trail: Systems and Forms for a Well-Run Remodeling Company.”|