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.
Networking to Better Business Practices
Networking--it's the best way to get ahead in business. So it's no surprise that more remodelers are joining networking groups to boost their businesses.
Networking--it's the best way to get ahead in business. So it's no surprise that more remodelers are joining networking groups to boost their businesses. Networking groups offer remodelers a safe environment to exchange ideas and information, problem solve, and examine case studies.
Through the National Association of Home Builders, remodelers can join a Remodelor 20 Club. Members meet regularly to share ways to improve their operations and increase their bottom lines. They also share and compare financial information, look for trouble spots and offer each other advice on how to increase their profit ratios and improve their performance, according to Michele McCormick, education manager for NAHB's Remodelors Council.
Each club consists of presidents, owners, principals or partners of remodeling firms who build in the same volume range and have similar operations. Groups are assembled so club members are from non-competing markets. All members sign an agreement to ensure confidentiality.
"Remodeler 20 is the only forum where we can have our ideas, our plans, policies and financial information critiqued in a positive way without fear of revealing information to our competitors," says Russel Caldwell, CGR, GMB, of Caldwell Construction in Ozark, Miss.
That's a common reaction from members, according to McCormick. "From what I hear [from members], it's the No. 1 benefit of NAHB [membership]," she says. Annual dues for a Remodelor 20 group are approximately $5,000 per year evenly divided among the members. Travel and lodges expenses are additional.
Another networking option is Remodeler's Executive Roundtable (RER), which is run by Remodelers Advantage, Inc., a consulting company headed by Linda Case and Victoria Downing. RER groups are made up of the owners of nine to 12 remodeling companies that are similar in size and scope of work, but are geographically different to avoid direct competition. Each RER group meets twice a year for three days for open book review of each other's financial statements, business and marketing plans, organizational charts among other things. Although the $3,000 price tag for annual dues, plus travel and lodging expenses may seem steep, the investment has paid off for Dennis Gehman.
Over the past five years, membership in RER has helped Gehman, president of Gehman Custom Builders in Harleysville, Pa., improve his business. For example, the company's balance sheet and profit-and-loss statements are now set up properly, their employee handbook is complete and up to date. And the company now knows what its ratios should be. Gehman attributes all of these improvements to RER membership.
"It's important to our business because we get to see how other remodeling companies operate--how they handle specific situations," says Dennis Gehman, president of Gehman Custom Builder in Harleysville, Pa. and RER member. "Relationships have been built with the others in the group. We feel free to call and e-mail each other between meetings to ask questions and share ideas."
Besides financial advice and a year-round sounding board, membership offers an added bonus--a sympathetic ear during times of crisis.
"We realize, especially when going through a rough situation, we are not in this alone," Gehman says. "Others have made it through and so can we."
For more information on networking groups:
Remodelers Executive Roundtable
(800) 368-5242, ext. 387