Qualified Remodeler Magazine

FEB 2015

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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Tat's why it is ftting to read the growth advice of remodeler Gregory Harth of Harth Builders in our NARI Recertifcation column on page 52. If I were forced to pick one page from this issue to cut out and keep, this would be it. Harth, who joined his father's company 11 years ago, has helped steer the company on a sustained path of growth — from $700,000 annually to $4.2 million in 2014. He says the key is knowing your systems and processes; write them down; and, then, continually update them. How you budget is important, too. Basing growth off previous budgets instead of actu- al revenue is the only way to go, says Harth. If you beat your revenue budget by 50 percent, it would be a mistake to put another 5, 10 or 15 percent on top of that number for the coming year. Instead, add 15 percent on top of the previous year's budget. How to account for new hires is also critical- ly important. Some employees should be tied to general overhead, while others, like project managers, should be assigned directly to the costs of specifc projects, says Harth. Guest columnist Andrew Shore of SeaPointe Remodeling in Southern California ofers great insights on page 14 about applying rigor to ensure proper ft with your culture. Despite the pressure to fnd people in a tight labor market, hires who negatively impact the morale of an organization can severely hamper your growth plans, no matter how strong the market. Te good news is that remodeling is back. Growth plans can safely be put into place. But there are pitfalls that come with growth and we must all be cognizant of how best to avoid them. | e try to pack each issue of Qualifed Remodeler with in- formation you can use to grow your businesses. Tis month, among all the impressive design and product solutions ofered, are several articles relating to business growth. Tis is a timely topic now that the economy is more stable and the out- look for remodeling is positive. Our annual forecast report, which begins on page 32, draws on many sources for an accurate picture of remodeling activity today, and that picture looks good. New data from Harvard's Joint Center for Housing Studies suggest that re- modeling is nearly back to being a $300 billion annual business. You, our readers, reported that remodelers are bull- ish on 2015, with about 80 percent expecting the year to be "good" or "excellent." Tis positivity, however, is tempered by a recent update of the Leading Indicator for Remodeling Activity (LIRA). It predicts growth will slow to 1.6 percent later this year, down from 6.2 percent during the current quarter. Harvard research analyst Abbe Will, who helped develop the LIR A, says the decline in the rate of growth is attributable to one com- ponent of LIR A, pending home sales, which has dropped year over year. As long as the remodeling market is still growing, I think slower growth is good news. As we have all seen, unchecked demand can create unsustainable abnormalities, both in the supply chain, where prices can rise quickly, and in remodeling businesses, where systems and process - es can break down from too much new business. Growth is treacherous W Our annual forecast report draws on many sources for an accurate picture of remodeling activity today, and that picture looks good. EDITORIAL DIRECTOR'S NOTE 6 February 2015 QR QualifiedRemodeler.com | ForResidentialPros.com Published by SOLA Group, Inc. 724 12th Street, 1W, Wilmette, IL 60091 847.920.9513 Publisher and Patrick L. O'Toole Editorial Director Patrick@SOLAbrands.com Managing Editor Laurie Banyay Laurie@SOLAbrands.com Assistant Editor Kacey Larsen Kacey@SOLAbrands.com Proofreader Nancy Mueller-Truax ForResidentialPros.com Andrea Girolamo Editor Andrea@SOLAbrands.com Audience Development Mike Serino MSerino@magservgroup.com Creative Director & Tracy Hegg Production Manager Tracy@SOLAbrands.com Editorial Advisory Board Stephen Gidley, GMB, CAPS, CGP, CGB, CGR, CPRC, CR Jeffrey Holloway, CKD, CBD, CGR Michael Nagel, CGR, CAPS Scott R. Sevon, CGR, CAPS, GMB, CGP, GMR Donna Shirey, CGR, CAPS, CGP Kenneth P. Skowronski, CR Group Sales Director Paul DeGrandis Midwest Manager Paul@SOLAbrands.com West Reed Fry Reed@fry-comm.com East and Southeast Vaughn Rockhold Vaughn@SOLAbrands.com National Automotive Tom Lutzke Sales TLutzke@ACBusinessMedia.com Literature Galleries/ Nancy Campoli Classifieds Nancy@SOLAbrands.com Digital Programs Tim Steingraber Manager Tim@SOLAbrands.com Operations Marie Snow Manager Marie@SOLAbrands.com A preferred publication of the National Association of the Remodeling Industry and the NAHB Remodelers Patrick L. O'Toole

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