Specializing in small projects

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How many remodelers does it take to change a light bulb? At David and Ellyn Robbins's Highland Park, Ill., house it takes one — a multi-skilled carpenter, namely Bob Stone, CLC, who has 32 years of remodeling experience. Why? For one thing, the ceiling in the Robbins's entry is 20 feet high, and climbing a stepladder to change the bulb up there is beyond what the Robbinses are comfortable...

December 01, 2004

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The Financials
Snapshot

How many remodelers does it take to change a light bulb? At David and Ellyn Robbins's Highland Park, Ill., house it takes one — a multi-skilled carpenter, namely Bob Stone, CLC, who has 32 years of remodeling experience. Why? For one thing, the ceiling in the Robbins's entry is 20 feet high, and climbing a stepladder to change the bulb up there is beyond what the Robbinses are comfortable tackling. For another, they've been delegating all their handyman jobs to Stone and the other three carpenters in the small projects division at D/R Services Unlimited, Glenview, Ill., for more than a decade. They wouldn't think of calling anybody else.

That's fine with Stone. He likes doing small projects and enjoys the friendly relationship he's developed with the Robbinses. And it's fine with D/R owner Ron Cowgill, CR, CKBR, whose company has done dozens of jobs for the Robbinses, ranging from little handyman projects to building a deck and remodeling a kitchen. It makes perfect sense that "Unlimited" is part of the company name: There's no limit to the size and type of home improvement projects D/R will do, and work requests from longstanding D/R clients such as the Robbinses just keep on coming.

Starting small

Usually remodeling companies open handyman divisions to assist large-job clients who need small things done. D/R Services evolved the other way around. Cowgill started doing handyman projects on his own in 1991 while working for Lance Winter's small-projects company. In 1992, Cowgill bought the company so Winter could open an unrelated business. Re-introduced as D/R Services, Cowgill's company continued to do only handyman and other small jobs. Four or five years ago, after clients kept asking him to do their larger projects, he launched a design/build division that handles room additions and other remodels requiring architectural services and/or foundation work. Cowgill sells these large jobs and runs the design/build division; while Winter, who came on board in 2002 as a Cowgill employee, runs the handyman/small project division with a practiced hand. Stone, who has worked for Winter and Cowgill for the past 17 years, has the skills, experience and temperament to accomplish virtually any home improvement or remodeling challenge. "Without Bob it wouldn't have happened," says Winter.

Every four to six weeks, the Robbinses call D/R with a list of fix-it jobs to be done. Most of the time Winter gives Stone the assignment since the Robbinses like him so much. "Bob's a great guy," says David Robbins. "He's real low key, easygoing. He thinks about what we ask him to do and comes up with very practical, easy solutions. There's almost nothing we've asked him to do that he hasn't been able to do." For example, the couple recently bought a large, heavy piece of granite art. "We asked him to hang it on the wall," says Robbins, "and three hours later it was hung."

On September 29, 2003, Stone spent the day at the Robbins house. As usual, he says, "I got there early in the morning, when they were both still home." They walked him through the house and showed him everything that needed to be done. Then he talked to them about the plan for the day. By following this standard procedure, "I can allot my time and get everything done that needs to be done before I go to get materials," says Stone.

On the to-do list that day: Change seven light bulbs in the entry hall, three in the family room, eight outside over the entry and garage, and three at the back of the house. Replace a three-way dimmer switch in the front hall. Repair the pull-out clothes line in the master shower. Switch the handles on two patio door screens. Clean, adjust and lubricate the kitchen storm door. Plane the bottom of the laundry door and adjust the strike plate. Plane the bottom of the basement bathroom door and install new screws in the top hinge. Measure a rotten windowsill in the office for replacement.

For an inexpensive job taking just one day, D/R Services bills the customer using the time-and-materials method. The work took eight hours at $65 per hour, including a trip to stock up on light bulbs in the sizes the Robbinses needed that day and use most often. "Seventy five percent of the time we'll have all the materials we need on the truck," says Winter, and Stone in fact already had all the other products he needed. Not even changing out standard light bulbs was quick and simple, with all the fixtures in hard-to-reach places. In the high ceilinged entry, "I had to bring a 24-foot ladder in the front door," says Stone, "so I put socks on the ends" to keep it from scratching the door and walls. In the tiled entryway, Stone set up the ladder on a drop cloth with nonskid rubber backing.

Planning ahead

When Stone examined the window, his role changed from worker to adviser when he discovered that the problem was bigger than one sill. Robbins recalls, "Bobby said, 'It's rotted out. You need to replace it. You'd have to rebuild the entire frame and lower sash, which would be a two-day job." Stone told Robbins it was not worth the labor cost to do the repairs. Instead he recommended installing a new window just like the existing Pella unit. That made sense to Robbins, so Stone measured the sash and glass in the window, which was a nonstandard size.

"There are a lot of things to think about," says Stone, including "what they're looking for and what they want to spend." He told Robbins that although Home Depot carries inexpensive standard-size windows, D/R could provide the custom size much cheaper than a home store: As a Certified Pella Contractor, D/R is able to supply the window directly to the Robbinses without the retail markup.

Using Stone's measurements, Winter gave the Robbinses an estimate, then followed up with a visit to the house to verify the window size. Winter sent them a formal quote, and they signed a contract. Because the couple wanted to wait until summer to install the new unit, D/R ordered the window in April, and installed it June 2, 2004. Stone was at a different job, so another D/R lead carpenter did the installation, with about an hour's help from an assistant. The job took 10 hours total.

Handyman essentials

Ask Cowgill and Winter which are harder to manage, large design-build projects or small handyman jobs, and Cowgill says in many ways handyman presents the bigger challenge. There are several reasons.

Advance work and scheduling: "It takes more time on the phone to set up two-hour jobs than it takes to set up a kitchen or bath remodel," says Winter. He tracks down four to 10 handyman clients every day — sometimes trying home, office and cell phones repeatedly — to follow up on their requests for work, find out when they want it done, and make sure somebody will be home to let the carpenter into the house.

When estimating the time and work requirements of handyman jobs and small projects, he has to factor in the difference between the work actually needed and how the clients describe it. Ellyn Robbins, for instance, will call to say, "I need Bobby for a couple of hours," says Cowgill. "We've learned that there's always three quarters or a full day of work for her." Winter schedules it accordingly.

No two handyman jobs are the same. In D/R's suburban market, the average house is 60 or 70 years old, often without plumb floors and walls and antiquated electrical and plumbing systems. "There is plaster to deal with, and molding to match," Winter says. In newer houses, says Cowgill, "We often have to fix work that was not done correctly in the first place."

Scheduling handyman work is a relentless challenge. Winter is continually piecing together projects to construct efficient workdays for his carpenters, while allowing them time to do first-class work. He doesn't schedule beyond a day or two in most cases because he doesn't know for sure what his lead carpenters will encounter on the job. They'll give clients a time frame — say, within a week or two — then call a day or two out to set a firm time. Even then, "I have a daily contingency plan that kicks in" if a carpenter finishes early or needs more time, says Winter. That plan consists of a list of clients who have very small projects and are flexible about when they can be done.

Staffing: Finding the right lead carpenters for handyman work isn't easy either. They need to have the knowledge and skills to construct a house, yet be satisfied doing small projects. They must be detail-oriented, have outgoing personalities and be excellent communicators. That's why Stone is such a good fit, says Winter: "He's capable of doing anything but likes doing the small stuff. And his people skills are incredible. He's great at hand-holding."

Stone says he enjoys his job because "I like to interact with customers, and explain the best way of doing things." For him a benefit of doing a small project is "the gratification of having it done and seeing [the clients] appreciate the job." The projects may at times seem insignificant to a skilled carpenter, but "it's stuff that's important" to the homeowners, says Stone.

Marketing: Though D/R has numerous regular clients like the Robbinses, the company must constantly generate leads to keep a full schedule of short-duration jobs. Rather than advertise, the company relies on customer connections. "We're heavily service- and contact-oriented," says Cowgill. Stone and the other small-project carpenters help generate leads via their good work. As Winter says, "Bob can deliver warm fuzzies like you wouldn't believe. People like us and get used to us fulfilling all their needs. They realize that they'll be treated right."

The company has unwritten agreements with three other businesses that also result in handyman leads. American Weathermakers does D/R's heating and cooling work; in return, D/R does structural repairs and creates access for the American Weathermakers HVAC crews. This "job sharing" introduces homeowners to D/R, and brings in 10 or 15 new clients every year. Likewise, doing all the prep and closings for U.S. Waterproofing jobs in the area produces 40 or 50 new handyman clients a year for D/R. And as the remodeler providing concierge service for the local Coldwell Banker real estate brokerage, D/R picks up at least 40 more new handyman clients each year.

D/R's own design/build division is a major lead source for the handyman division. Most design/build clients are handyman regulars such as the Robbinses. And the big-job clients continue to turn to D/R for their handyman work. The small project division "keeps cash flow moving, and brings in those bigger jobs," Cowgill says, which in turn bring in more handyman. With both divisions in place, he says, "We can provide full service to clients and complete the circle."

 

The Financials

D/R Services budgets a 34 percent gross profit on design/build projects but, because small projects are proportionally more expensive in overhead and setup time, plans for 50 percent gross profit on handyman jobs. They also mark up materials and labor 100%. The Robbins's $925 handyman day came in on target; while the $3,174 window replacement project bettered the goal by 12 points because the installation went so smoothly.

Contracts and billing: All handyman jobs up to $1,000 are billed on a time and materials basis with no signed contract. D/R Services does obtain a signed work order that estimates the number of hours required, except in the case of established clients who are not home to sign a work order. By state law, higher-priced jobs require contracts. Clients are charged for site time, including necessary trips to pick up materials, while the carpenter's driving time to and from the job is built into overhead. There's a two-hour minimum fee. If a job takes a really short time, say 15 minutes, the client would be charged for a half hour.

In 2004, D/R raised the hourly rate to $75. To some clients that might sound steep. That's why Cowgill calls all but design/build jobs "small projects" rather than handyman jobs. "Handyman sounds like Joe down the street who's retired and has some tools," he says. "We sell the qualifications of our guys. We send a skilled person to the job."

D/R brought all billing in-house (estimating has always been in-house) eight years ago, after concluding that billing in the field had problems. "As a carpenter got to know the clients," explains Cowgill, "he would become uncomfortable charging for everything and would give back an hour here or there. But we're paying him, so we need to bill for it." Besides, says D/R chief financial officer John Hammer, "it was a waste of time" for carpenters to do the paperwork when D/R can do it more efficiently using QuickBooks and Excel. Now the carpenter completes a daily log sheet, which Hammer uses to generate a professional looking invoice. "It gives us better control," says Cowgill, "and it makes the guys feel more comfortable."

Budget History
Sept. 29, 2003, job
Hours 8
Hourly labor rate $65 (now $75)
Final price of job $925.11
Cost to produce $370.04
Gross profit $555.07
Budgeted gross profit 50%
Actual gross profit 50.9%
June 2, 2004, window replacement
Initial estimate $3,174
Final estimate $3,174
Final price of job $3,174
Cost to produce $1,207.02
Gross profit $1,966.98
Budgeted gross profit 50%
Actual gross profit 62%


Snapshot

Ronald E. Cowgill , CR, CKBR

D/R Services Unlimited, Inc.

Location: Glenview, Ill.

Type of company: General remodeling contractor

Staff model: 3 office, 11 field

Sales history:

2000 $1,194,000

2001 $1,071,000

2002 $1,347,000

2003 $1,224,000

2004 (projected) $1,583,000

Annual jobs: 200 handyman, 45 small remodels, 5 design/build

Workweek: 40 hours

Software: QuickBooks, Microsoft Excel, HomeTech, Chief Architect

Contact: 847/998-1687, www.restorethenorthshore.com

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