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Some see the installed sales divisions of the big boxes as an enemy, but Anthony Home Improvements President Stephen Klein has embraced Home Depot as the key to his company's growth.
The Elkins Park, Pa.-based company (under the name Housecrafters) has been installing projects for Home Depot since 2003. The company started by working with three stores and now is the authorized contractor for kitchens, baths, sunrooms and closet organizers at 57 stores in and around Philadelphia. Business from Home Depot accounted for about 90 percent of the company's $7.2 million installed volume last year. (The company is No. 3 in the Philadelphia market on this year's Market Leaders list. See p. 28 for the complete list.)
For kitchens and baths, Housecrafters only provides the labor and installation after the project has been sold and designed. For sunrooms and closet systems, though, the company sells, designs and installs the project, as well as provides materials.
Thanks to 35 years working in the business that his father started more than 50 years ago, Klein has plenty of experience working as an unaffiliated contractor. The company was also part of the Sears network in the 1980s and '90s.
The partnership offers several advantages over being on his own, Klein says, including reduced marketing costs, eased financing and improved cash flow because Home Depot pays promptly.
Klein however says it's not for everybody. A contractor has to be willing to give up some control in pricing and design, as well as deal with Home Depot's paperwork requirements.
"We also have to worry about putting so much of our business with them," Klein says. "We realize we could get swallowed up with them — they could take everything away from us."
For that reason, Klein is looking at ways to build the rest of the business, including a new focus on universal design.
"Home Depot grew so fast, it became a much bigger part of our business than we ever thought it would be," he says.
For Curb Appeal Renovations, growing the business means more than just increasing volume.
So company owners Robin Burrill and Rob Mathews decided that in 2008 the Keller, Texas, design/build firm (No. 5 in the Dallas market on this year's Market Leaders list) would focus on improving its culture in a variety of ways, including holding the first company summit.
Burrill and Mathews worked with Linda Case of Remodelers Advantage to develop an outline of what they wanted to accomplish at the meeting, then hired a facilitator to lead the all-day event last November.
At the summit, Burrill and Mathews shared their revenue goals for the year, detailed financial information and shared what they saw for the future. They also solicited the input of the employees about what they thought both company and personal goals should be and they could improve the company. They also talked about the results of the company's Guild Quality surveys and how they could improve customer satisfaction. The benefits were immediate, Burrill says.
"It really got them to feel as if they are part of the company because they know where we stand," she says. "It's really made them think strategically, like owners, not employees."
Burrill and Mathews are planning a follow-up meeting in June to review the company's progress and another summit — this time for two days — in October. They also used the model for a trade contractor summit in January where they shared the goals for the year with their subcontactors.
Here are some best practices from this year's Market Leaders
- American Home Renewal (No. 1 in San Francisco) works with homeowner associations in the area to make sure its windows and siding are preapproved, so when someone wants work done, it can be at the top of the list.
- F.H. Perry Builder (No. 1 in Boston) launched a three-year plan, Permission to be Preeminent, which promises its employees that they will have the tools and education to remain the choice of sophisticated homeowners.
- Artisan Interiors & Remodeling (No. 5 in Denver) has tightened its focus to luxury baths, kitchens and whole-house remodels with its Concierge Construction Services, emphasizing their turnkey approach to remodeling for high-end customers.
- Behr Construction (No. 4 in Los Angeles) holds a weekly meeting with all project managers and supervisors where they not only review the status of all ongoing projects, but also have a short quiz on current and new building codes.