Qualified Remodeler Magazine

DEC 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.

Issue link: http://qualifiedremodeler.epubxp.com/i/439340

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Page 41 of 52

LOUIS KROKOVER Newday Development Inc. Sherman Oaks, Calif. NewdayDevelopment.com LOUIS KROKOVER, president of Newday Development in Sherman Oaks, Calif., can pinpoint the day that his company began its "fall from grace and of the high clif," as he describes it. January 6, 2009, Krokover lost his mother, who was also his business partner. "Market conditions were falling apart, clients pulled back on their contracts, and we had to fght each and every minute of the day," he remembers. "So we just had to ride the wave as best we could and hope for the best until we could fnd a solution that we felt would and could work." In late 2010, Krokover enacted a plan to reinvent his company rather than work against its competition. Te company began implementing "open book/cost plus," which works with competitors' bids and shows prospective clients a diferent level of knowl- edge and professionalism. Tis plan involves doing homework to submit a proposed base line cost submitted against submitted plans. Tese numbers become the company's high numbers, allow- ing the fnal number to be, hopefully, re- duced with suppliers and subcontractors to save the client money. "We further re- duced our overheard and proft margins to refect this working team efort with our clients, and by doing this they agree to pay us promptly upon re- ceiving an invoice," Krokover says. "By doing this, we no longer carry the project, which is the largest cost of doing business." Krokover points to 2012 as when he believed this new direction had turned things around for his company. He also markets that Newday Development is an award-winning frm, which he says helps separate it from the competition. Giving back to the city and local communities through working with the city councils and planning departments on a volunteer basis also helped put the compa- ny name in front of the general public. "We have become very stable with this new direction, but we have also learned that we can never get too comfortable, like in the past. We continue to grow and learn every day from every project," he says. "Te more we can save our clients, the more they love us, but more importantly they feel better with knowledge that they are more hands-on in working as a team with us." | MIKE FISCHER Michael Fischer Builders and DreamMaker Bath and Kitchen of the Greater Lansing Area Lansing, Mich. HomeRemodeling- LansingMi.com MIKE FISCHER was looking to expand his construction company, Michael Fischer Builders, in 2005 by adding interior work to his oferings. He became part of the DreamMaker Bath and Kitchen franchise and immediately had access to assembled systems and vendor relationships as he went about expanding his business. Fischer further looked to expand when he bought and remodeled a 150-year-old build- ing in Lansing, Mich., to create a kitchen and bathroom showroom. With a plan to use the space to educate customers about diferent styles, options and price points, the remodel was completed in 2008. Te opening of the showroom should have been great for busi- ness, but instead Fischer witnessed customers canceling remodeling plans to the tune of ap- proximately $500,000 worth of projects as the recession hit the economy. "I worked hard to keep my core team together. I tapped my personal credit line while concentrating on tightening up on operations and fnd- ing ways to pay bills using much tighter cash f low," Fischer explains. "I also took some painful steps, such as suspending the company's retire- ment program for a few years, in addi- tion to working with vendors and insurers to fnd ways to save money." Wor k i n g w it h DreamMaker's coach- es during the recession helped him improve his proft margins. Fischer also credits the group of fellow franchisees he joined for helping him tighten his operations. Te eval- uation of his business by other franchisees helped him realize he should take better ad- vantage of his staf. "Te process of weathering the recession forced new responsibilities onto my staf, and they have really shined. It allowed them to demonstrate skills and responsibilities that, in turn, have boosted their confdence and productivity," Fischer says. "It now takes half as many people to gen- erate the same amount of revenue we were seeing before the eco- nomic slump. Today the business generates nearly a million dol- lars a year in revenue, and we have doubled our proft margin over the past three years." Te showroom has also helped contribute to revenues as it has opened up a new avenue for sales. Te sales process gives customers a place to explore options for their remodels, by touching and seeing available options. Working with DreamMaker's coaches during the recession helped Mike improve his proft margins. Krokover enacted a plan to reinvent his company rather than work against its competition. ForResidentialPros.com QR December 2014 41

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