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Growing through acquistion
Like many remodeling firms, The Kanon Group not only has to worry about its financial future, but also that of its subcontractors.
So when one of its exterior subcontractors told President Greg Rittler that he was going to be shutting down, Rittler decided to buy his company. Rittler says the siding and roofing services the contractor offered would be a good way for his Towson, Md., design/build firm to diversify in the current downturn.
From working with him for 10 years, Rittler knew the sub did good work. The problem was simply having the business acumen to survive in the downturn.
“We're going to essentially put him back on his feet and have him run this part of the business,” Rittler says.
The new division should help the company capture more business as homeowners turn to smaller projects, Rittler says. The company's average design/build job size was about $100,000, but the average exterior job is about $10,000 to $15,000.
“We think there's a nice market out there of people that need to do that roofing or siding replacement job but aren't looking for a large kitchen or addition,” he says.
Kanon has added two new employees — one for roofing and one for siding — plus the former sub. The company will use subcontractors to meet any additional labor needs. This is similar to the model Kanon uses for its design/build projects.
Last year, the company had $1.2 million in sales. Rittler says he expects the new division to add about $1 million but that $500,000 is probably more realistic for the first year.
A new use for old materials
One of the biggest ways remodelers can make an impact on the environment is by reusing the materials they strip out of a home. That's where The ReUse People come in.
The ReUse People is a nonprofit firm dedicated to helping remodelers and homeowners reduce what gets dumped into landfills by salvaging building materials for reuse in low-income housing in the United States and Mexico.
The company does deconstruction only, no building or remodeling. About 95 percent of its business is residential with a small amount of commercial.
The contractors the company works with have found it to be a good sales tool, says President Ted Reiff. Not only do the home-owners get to feel good about helping the environment, they also get a tax deduction for the donated materials.
Reiff estimates that using deconstruction and salvaging the materials adds about 25 percent to the job time compared to simple demolition.
“It takes a little longer to take things out carefully, so there's an additional cost there, but that additional cost is made up by the tax deduction,” Reiff says.
The group started as a temporary building materials drive in Southern California in 1993 after severe winter storms destroyed thousands of homes in Tijuana. After the success, the founders decided to make it a permanent effort. The ReUse People has since expanded to several locations in California, as well as Chicago; Boulder, Colo.; and Kansas City, Mo. The plan is to be in 20 to 25 major metro areas in the next few years, Reiff says.
For more information, visit www.thereusepeople.org.
Beyond floor plans
John Mangan is always looking for ways to use technology to make his company run more efficiently.
That's what prompted Mangan, president of Mangan Group in Takoma Park, Md., to make the change from CAD to Building Information Modeling, or BIM. The difference is a “4-D” approach to design, Mangan says.
Revit from AutoDesk (the specific software the company uses) not only allows three-dimensional design, but also incorporates the time element into the plan. The software lays out exact times and dates for each stage of the project to create a realistic schedule.
The software also helps with optimizing designs. For example, by using GPS technology Mangan has been able to design projects to make the most of passive solar. By entering any date and the GPS coordinates, Mangan's designers can see what the angle of the sun will be on that day and plan accordingly.