The remodeling industry has a growing problem on its hands that must be addressed immediately.
Project Spotlight: Commercial Makeover
One commercial remodel overcomes problems to create a beautiful salon.
One afternoon in late 1996, Montine Hansl went to the beauty salon. She came away with a nice hairdo and a plan to restyle the salon, too. While at the salon, located on the second floor of a small office building in tony Potomac, Md., Hansl discovered that the shop owner was going to sell the business. With a desire to run her own business, Hansl decided to buy the salon in partnership with her niece, Gail Clapper, and reinvent it as a refined day spa.
Hansl contacted just one contractor, Hopkins & Porter, to discuss the remodeling job. The Potomac-based remodeler and custom home builder had earned her loyalty when it remodeled her home and built a luxury addition a few years earlier, and then constructed a guest house on her property. Only 10% of Hopkins & Porter’s remodels are commercial -- and most of those are straightforward projects such as doctor's office waiting rooms and church parlors -- but salesman/designer Andy Gilbert says Hansl’s salon makeover seemed like a reasonable fit because she was looking for residential finishes. Another attraction was that the company knew the client and knew it could meet her expectations, he says.
A week after the initial meeting on Aug. 23, Hansl wrote a $350 retainer check to launch the design and planning process. There was no time to waste. The grand opening, set for Dec. 20, was firm. Yet Hansl and Clapper required that the salon remain open for business four days a week during most of the remodel, compressing construction time into just three days a week.
"Montine had a pretty clear feel for how she wanted the salon to feel" -- a sophisticated yet fresh and natural, residential French country ambience -- "but not exactly how she wanted it to look," Gilbert says. Taking into account her time constraints and design wish list, Gilbert sketched out a rough design concept and presented a preliminary estimate of $75,000 on Sept. 25. Without hesitation, Hansl signed an agreement authorizing Hopkins & Porter to develop a full design, recognizing that the fine finishes and custom details under discussion could raise the cost to $95,000 or more. A $4,000 deposit accompanied the agreement. Three weeks later, full-fledged design in hand, Hansl signed a $104,800, fixed-price contract for transformation of her salon.
The 20-year-old salon had screamed commercial, with its green vinyl floors; hard-edge, pink laminate built-ins; parade of mirrors and metal-frame windows; and cramped arrangement of head-to-head styling stations. Independent architect Rick Shea, who does most of Hopkins & Porter’s residential remodeling projects, took on the challenge of converting the sterile salon into a French country oasis.
Shea interviewed the staff at Hansl’s salon and visited a few other salons to see their setups and talk to their staffs. He pored over books featuring French country designs, adapting traditional motifs and materials for use in a carefully customized work space that accommodates six styling stations in a semiprivate "honeycomb" arrangement, a seventh more private station, a massage room, a break room and other salon zones. Pediments and interior shutters lend appealing country flavor while softening "the relentless row of commercial windows," Gilbert says.
Hopkins & Porter assumed the permit process would be quick and simple because the job entailed giving a facelift to an existing salon. "We weren’t familiar with commercial requirements" Gilbert says. The electrician and the plumber pulled their own permits; Hopkins & Porter thought no general construction permit was needed. But an inspector happened to be in the building one day and discovered the salon project. "He saw that we had gutted the place," says Gilbert, and the inspector started asking questions.
Gilbert was shocked to learn that a general construction permit was necessary and that it could not be issued without a complete egress analysis by a registered architect. Hopkins & Porter called Gerald Clark Associates, architects seasoned in local commercial work, to do the analysis and certify the plans. The analysis slowed the permit two or three weeks, says Gilbert, and triggered an unexpected cost, which Hansl paid directly. Fortunately the inspectors let Hopkins & Porter keep working while the permit was being reviewed, "right up to the final inspection," says Gilbert.
Another eye-opener was the labor commitment. The job required concentrated labor up front. Lead carpenter Don Lowery says he put in 40 hours every Saturday through Monday, including a couple of unanticipated hours to prepare the work site each Saturday and another two hours to set everything up so the salon could open for business Tuesday morning. (Salon equipment was stored each week in a vacant suite next door.) Carrying up construction materials bit by bit in the building’s small elevator translated into extra labor hours as well. The production schedule succeeded because of an understanding with the client as to what being "open" meant, says Gilbert. "We’d clean up and vacuum the area, and segregate and cover our supplies and equipment." Hansl was willing to live with temporary facilities and with having the occasional subcontractor working off to the side when the salon was open.
Instead of calling its usual electrical subcontractors, Hopkins & Porter hired Apple Electric for the job because of owner Dick Cissel’s understanding of the commercial system, says Gilbert. Cissel also enhanced the lighting design with recessed ceiling fixtures and low-voltage lights, behind the mirrors, that reflect off the ceiling, cutting down on shadows. Additional upgrades to the design, which Gilbert says had to be drafted on a fast track to expedite the project, included customized equipment caddies that Shea designed to roll under the countertops when not in use; the seventh styling station; and the dressing room. In hindsight, Gilbert says, "Had we had three months to design, these would not have been change orders."
The salon closed at the end of November for a 10-day production surge. The oak strip flooring was put down, the styling stations installed, trim set, front entry completed and base painting done in preparation for Warnock Studios, designers hired directly by Hansl to faux-paint the walls and ceilings. Warnock also painted the interior shutters in a progression of rainbow colors. Days before the grand opening, a thief broke into the salon, damaging the custom entry doors. Hopkins & Porter did a fast fix to repair the lock and replace the glass. On Dec. 20, as planned, Hansl and Clapper celebrated the grand opening of Le Salon Chez Margot.
Final gross profit on the job, at 26.2%, sagged well below Hopkins & Porter’s goal of 33%, says company president Guy Semmes. Because labor hours were considerably higher than estimated, the company ate the extra cost, which cut profits. Another profit bite came from the overruns on cabinets and miscellaneous punchlist items. In the end, job costs were $7,000 over budget.
Everybody at Hopkins & Porter considers the job a success anyway, and with good reason. The salon is a showcase; it won local and national NARI Contractor of the Year awards plus a Chrysalis Award for remodeling excellence. "[The project] made the client happy, works well and looks good," says Ellie Denker, the company’s treasurer. The good relationship among clients, salon staff and Hopkins & Porter is something they are all proud of, she says. "Hopkins & Porter has always taken a very long view [aiming for] continued happy referrals."
Hansl and Clapper have nothing but compliments for Hopkins & Porter and the job the company did. "The guys were very personable," says Clapper. "We all became friends. Don and his family still come in as clients."
Cash Flow Analysis