Qualified Remodeler Magazine

AUG 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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"Te Dow is working to people's beneft; that is where they put all of their money. So the pendulum swings in that direction. And they have done well in this market," Gidley explains. "People have plenty of money. It is not like the wealth has left the area. But they are sitting on the sidelines waiting for real estate to rebound. People are depriving them- selves now, but they can't do that forever." Overall higher volume of leads for new business 21.6% Higher demand for bigger projects 16.5% Increased business from overall marketing 12.8% Better opportunity to hold or increase pricing 11.5% Increased sales training and effectiveness 7.3% Increased throughput without adding more overhead 6.8% Increased business from Internet marketing 4.7% Other 4.7% Adding a new high-demand product or service 3.4% Adding a new or expanded service area 3.4% Eliminating unprofitable products or services 2.8% Mining existing customer base 2.4% Eliminating B and C players 2.1% BIGGEST OPPORTUNITIES AMONG TOP 500 Companies on the Qualified Remodeler Top 500 List see big opportunities in a higher number of leads, bigger jobs and the ability to increase pricing and hold margins this year. Source: Qualifed Remodeler 2015 BIGGEST CHALLENGES AMONG TOP 500 Finding and hiring qualified employees 29.2% Generating leads for new business 21.8% Finding and hiring qualified trade contractors 15.5% Keeping up with increased demand 11.7% Increased competition 4.5% Increased regulation from government 4.3% Other 3.2% Reduced profitability due to operational inefficiencies 3.0% Higher material prices 2.8% Economic weakness in your service area(s) 2.2% Retaining key employees 0.7% A SECOND company, serving the exte- rior replacement and home improvement market, is having a distinctly diferent ex- perience in Florida, where it set up shop in 2009. Earl Rahn and Daniel Ochstein for many years were executives with Champion Window Mfg. & Supply Co., No. 5 on the 2015 Top 500 until it was purchased by a private equity frm. After post-acquisition tenures with Champion, the partners were bound by a two-year noncompete in states with Champion locations. Tey decided to move to relatively virgin territory for replace- ment windows, Tampa, where they launched NewSouth Window and a separate manu- facturing business, DOERS Window Mfg. Today, NewSouth Window is No. 47 on the Top 500 with revenues of $23.1 million on 2,155 jobs. Te frm now has 125 employees and is operating in four Florida markets — Orlando, Tampa, Bradenton-Sarasota and West Palm Beach. "One year from this month, we will open Fort Meyers and Naples in southwest Florida, and two years from now we will go into Fort Lauderdale, which is Broward County," Rahn says. "Ten we will see what happens next. Dan has his eye on southeast Georgia, Jacksonville and Charleston." Te key for the NewSouth team has been the receptivity of Florida homeowners to the message that new windows are just as import- ant in warm weather climates as they are in cold weather climates. In addition, new codes are driving awareness for the need to switch to high-impact windows. "In Florida today you have a need for hur- ricane windows. And then you have the need for energy efciency," Ochstein notes. "On July 1, Florida put in efect the model energy code. Tose are the two underlying drivers for windows now, so our timing could not have been better." Te company also has found that a combi- nation of traditional marketing on television, radio and newspapers combined with a robust Web presence has been efective in commu- nicating the company's message says Amy Rahn, the company's director of marketing. "Te timing was perfect in the fact that ener- gy efciency was really getting a foothold in the fenestration business here. Tey were also ready for the factory-direct model." TWO MODELS — one replacement, the other full-service and design/remodel — in two very diferent regions show diferent outcomes. Tat is the story of this 2015 Top 500 list as it is in most years — big-pic- ture growth with lots of local and segment nuance. Te remodeling market is growing and the following list is a composite view of the market. | Many of the challenges cited by companies on the 2015 Top 500 List relate to managing growth: finding and retaining qualified people, including trade contractors. The No. 4 challenge on the list says it all: Keeping up with increased demand. Source: Qualifed Remodeler 2015 QualifiedRemodeler.com QR August 2015 25 THE ORIGINAL RANKING OF THE NATION'S LARGEST REMODELERS

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