Qualified Remodeler Magazine

MAY 2014

Qualified Remodeler helps independent remodeling firms to survive, become more professional and more profitable by providing must-have business information, namely best business practices, new product information and timely design ideas.

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he says. "For us, the end of the design process is very anticlimac- tic," he says, referring to having no surprise costs. "Nobody likes a surprise at the end or through construction." Chermak notes clients often will phase their scope of work into what he refers to as a mas- ter plan. For example, if clients want $7,000 of granite coun- tertop but money is tight, they might choose to install $1,000 of countertop made from another material and upgrade later. A larger master plan example is if clients want to remodel their kitchen and two bathrooms. In that case, the client may choose to remodel the kitchen and one bathroom and leave the other bathroom until funds surface down the road. Simone also stages multi- phased projects. "We'll do the overall design for the entire proj- ect so they know what the whole concept is. We'll probably even make most of the finish selec- tions," he says. "Then, down the road when they want to execute it, it's just a matter of updating costs and scheduling the project because all of the major deci- sions have been made." Remodelers walk a fine line when advising against client- driven changes. The remodeler understands each design deci- sion best, but the clients need to be happy with the finished result and get the home and features they're looking for. "If the client absolutely insists on something, there's a good chance that's what is driving the project, so by all means you should incor- porate their idea," Simone says. "There might be a couple dif- ferent ways to execute on that concept, though." S i m o n e r e l i e s o n 3 - D renderings to show the client what various design options look like. "We look at 2-D drawings all day and understand what it will look like in 3-D, but most clients don't have that skill set. We want to give the client all of the information we can and let them make an intelligent decision," Simone says. Chermak has been in remod- eling for approximately 40 years, 34 of which have been in his own business. He sometimes will recommend against doing work if he feels the time and cost will not yield the sought-after result. "Does it really provide what the customer believes it will?" he sometimes questions. "Most people are receptive to recommendations. The success comes from the knowledge base and lifelong learning." CLIENT FINANCING Chermak offers two forms of financing. One is through a regional bank that offers a loan based on the appraisal of what the completed value will be, rather than based on the value of what exists. "It's a sweetheart deal because they can get more money to upgrade their home since the bank is going to loan based on the finished product, not what is there now," Chermak explains. His company also offers loans for projects less than $20,000 through GE Money. Most clients take advantage of one or the other. "Probably less than 20 percent self-finance or just pay cash," he estimates. C u s t o m D e s i g n a n d Construction is 28 years old and operates with the business philosophy of reinvesting profits back into the company. As such, the company offers its financing in-house. "Since it's our money, we can do with it whatever we want," Simone says. The application process is a one- page document that asks for an applicant's name, address, occu- pation, income level and social security number so Simone can check credit reports. In the boom times of 2006-08, Simone estimates the company carried financing for more than 70 percent of its projects. During the economic meltdown, the number was tiny; presently, he's seeing the pendulum swinging back. "Now we're involved with the financing for 40 to 45 per- cent of the projects we're doing. It's not what it used to be, but it is coming back." QR When budget cuts are required, where are the first cuts made? % 4 8 10 Other Product quality Design details 39 Bells and whistles 39 Project scope $ How often do you advise against a homeowner's budget-cutting decision? 38% 34% 22% 2% 3% Half the time Not too often Most of the time Every time Never ForResidentialPros.com QR May 2014 41 QUR_40-42_SurveySeries514.indd 41 4/28/14 10:26 AM

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