Qualified Remodeler Magazine

AUG 2018

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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better track with the equivalent ratio to what we're billing out. Otherwise we're kind of crushing the company." Pick knew personnel stability would drive efficiency and set a goal to cut employee turnover in half shortly after joining the company. "We actually had charts. Every single month when we met as a management team, we would go over what's the turnover for the month, how many people did we lose, how's this trending and what are we going to hit for the year. And we cut it 50 percent." e expense of living in Santa Barbara prohibits most Allen field crews from residing in the area where they typ- ically work, Pick notes. Many of the laborers live between 30 minutes and an hour away, which can strain logistics and lead to disconnection. e organization often hosts parties in its parking lot to build stronger camaraderie and champions a monthly staff-produced newsletter. "You've got to work hard to make sure that connection is there," Pick explains. "I want the team to be living in Santa Barbara, but very few people can. If our concrete crew [lives] an hour to the south [for example], and then we have a job that we need to do concrete on that is 40 minutes to the north [of Santa Barbara], now all the sudden you've got yourself a huge commute problem." Natural disasters in California this past year prevented a number of employees from traveling to the office for up to a month, he adds. e community lost more than 1,000 homes as a result of wildfires and mudslides, so the company rounded up as many workers as possible to clear mud for homeowners. Allen Vice President Ian Cronshaw even rode a bicycle to work because the freeway was closed. "is guy rode his bike into work with a wetsuit on and a dress shirt over the top. at sense of purpose is what we're about," Pick says. "We're talking 100 dump-truck loads of dirt coming out of these houses. ere was a massive sense of responsibility to rebuild our community. We actually contracted with subs to do just mud cleanup; we took their entire crew." e organization employs more than 100 full-time per- sonnel, and 20 of them have been with the company for at least a decade, he adds. Allen won Western States ESOP Company of the Year in 2017, and Pick plans to institute a profit-sharing plan in the near future. Eventually he would like the business to earn a B Corp certification by meeting rigorous social and environmental standards. After growing into two new locations and a commer- cial division, the company knew 2018 could be a tough year, Pick explains. Once the natural disasters rendered extensive damage, Allen concentrated on getting back to basics and improving its margins. Many homeowners in Santa Barbara will want to rebuild in the next year, but their insurance settlements have not been processed yet. "We have two people who almost work solely on help- ing clients with insurance. A lot of that is [considerable] work upfront in order to get to the build side," Pick says. "We had [nearly] our entire sales team out helping build just to get through jobs [in 2017]; it really dried up our pipeline for 2018. [Now it] is probably triple what we were looking at the same time a year ago." Allen takes on some design work for smaller kitchen and bathroom remodels; for major projects, though, the company regularly partners with architects and designers, he adds. e business also established a "care and repair" division to tackle minor change orders and fixes for previ- ous customers. Pick intends to advertise that proficiency for accomplishing small jobs heavily over the next year. "ere's a huge market for that in a place like Santa Barbara, where you have so many people moving in from out of town," he continues. "ey want to do smaller remodels, they want some exterior work done, they might need something done on their deck—they might need a pergola or whatever. ere are so many little things. ey lead into much bigger jobs, they have great margins, and they have happy clients. "I don't want to lose that ever as a company," Pick adds. "It's a big part of the work we do, and it's what keeps us connected to the community, [as well as] a major player in what we're doing. Otherwise you can get lost in doing a couple really big jobs, and I think you can disconnect from what's going on around you." | FULL-SERVICE BY THE NUMBERS An overview of the 238 full-service firms on the 2018 QR Top 500 TOTAL REMODELING REVENUE: $1,895,848,251 TOTAL JOBS: 84,601 2018 REVENUE FORECAST: $2,183,851,063 WHOLE-HOUSE JOBS: 20.8% KITCHEN JOBS: 16.8% BATH JOBS: 13.6% ADDITIONS: 8.9% AVG. SPEND ON MARKETING: 4.32% of revenue TOP LEAD SOURCE: Repeat business 25.9%, Referrals 24.5% EMPLOYEES: 9,988 TOP CLIENT TYPE: Couple with children TYPICAL CLIENT INCOME RANGE: $150,000 - $200,000 QualifiedRemodeler.com QR August 2018 31

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