We've Got Mail

Letter to editor on draw schedules and in-house help.

August 31, 1999

Dear Professional Remodeler:

I was recently reviewing the April 1999 issue, and noticed your list of last year’s monthly winners. I was wondering how a company qualifies for Remodelor of the Month status? I feel that we have an outstanding company of our own here and would welcome the challenge of your contest.

Mark Kenyon

County Wide Home Improvements, Inc.

Boothwyn, Pa.

The Remodelor of the Month program was established by the Remodelors Council to recognize remodelers who have significantly contributed to the industry through involvement with the NAHB and their community. Candidates are nominated by local council officers and are judged according to a set of guidelines based on a point system. Points are awarded for NAHB involvement, industry involvement, community involvement, business longevity, council membership, and certification and awards received. Candidates must be NAHB members. A Remodelor of the Year is chosen from the Remodelor of the Month winners. For more information regarding the Remodelor of the Month Program, call (800) 368-5242, ext. 451.

Dear Professional Remodeler:

I enjoyed your recent article regarding draw schedules. We have had similar problems with customer apprehension.

We used to work on approximately three to seven draws depending on the project size/duration. Our job costs range from about $500 to $200,000; occasionally we do larger and smaller jobs. After sixteen years in business and last year winning the "Florida 100" award as the 22nd-fastest-growing private company in the state, we were almost forced out of business when three clients in a row withheld substantial final payments. The fallout from that experience is still haunting us, and I believe it will be a few more months before we totally recover.

After these experiences, my partner devised a strategy that seems to work better than anything we have ever tried. We take only 10 percent to start a major remodeling project. The balance of the contract is divided up into payments that never exceed $5,000 each. We tie these draws to easily identifiable milestones.

At first, I thought clients would be apprehensive about having 18 draws on a $100,000 contract, but they seem to be quite receptive to the concept-- their hands don’t shake as much when they’re writing those smaller checks.

Our cash flow projections are steadily becoming more reliable and our subs are getting paid on a more timely basis. I feel like we are more in control, and the clients still feel like they are too. Keep up the good work!

Scott Strawbridge

Scott Strawbridge, Inc.

Fort Lauderdale, Fla.

Dear Professional Remodeler:

I’ve been reading articles in this last issue about doing things in-house with your own crew. Both articles, "In-House Help" and "Hourly Rates," indicate people doing light electrical work and light plumbing work. Given the people that the articles talk about, I don’t think they’re licensed. In the state of North Carolina, you would be in big trouble if you were doing any type of work without a license--electrical or plumbing.

In other states, even when you could get away with that, it’s not a good practice. If you do some electrical work and someone’s house burns down, one of the first things they’re going to ask is who was doing electrical work on this house that it not licensed to do it. I would never advise anyone to do work--especially electric work--without a license.

Drew Remaley

Remaley Construction Co.

Raleigh, N.C.

Dennis Gehman, president of Gehman Custom Builder, Inc. and the subject of July/August’s Q&A, responds:
You’re right that licensing is important and required in most places. Pennsylvania is a commonwealth and not a state, which means that each municipality does as they please. Therefore we need to abide by different rules everywhere that we work. In addition, we have made sure that we are properly insured for both liability and workmen’s compensation to do the plumbing and electrical work in house.

In this good economy, the stories that we’re hearing right now about subcontractors who have over-scheduled and aren’t showing up when promised makes us glad that we’re not dependent on subs. The smoothness of controlling our own schedule is worth it all.

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