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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his processes and methods for carrying out certain tasks. "He clearly was doing something successful. I said, 'Dad, how do you take a lead? When someone calls in, what are the things that you do to convert them into a sale?'" e characteristics that made Allyn successful became the guide for a mission statement as well as eight core val- ues for the company. Teachings include returning phone calls promptly, always being accessible and helping clients make informed decisions by educating them about cost and schedule in advance of the work, says Greg, who took over as owner and president in 2013. "Even though nothing was in writing initially, there was a process," he explains. "Early on, we just wrote down what he did, so that I could do it. ese processes we wrote down, we revisit it every couple of years—sometimes every couple of months. e only constant we've ever had in this business is change. Every year we're working on our business—how do we make it better?" Harth Builders quickly implemented a website to es- tablish an online presence and generate leads for the com- pany. Greg previously had used Excel for estimating but soon adopted ImproveBuild RBS, a business management system for remodelers that provides a combination of cloud-based and desktop solutions. Smartsheet software pushes all project schedules up to the cloud, he adds. "Our business is scalable, and we've built the business to take advantage of the market [once] it came back. And clearly the market is back right now," says Greg, who hired 12 new employees this last year. "One of the things I learned from my dad is every time we take a step forward, what's the step back that you might have to take. You don't have to do it; you just have to identify it." A late winter in Philadelphia this year delayed many jobs until the second quarter, causing every trade partner to get backed up, he explains. e most challenging aspect of being a design/build company, however, proves to be the ongoing training for field employees. Harth Builders started its own training program, Harth University, in January to educate workers, especially production. e organization utilizes Prezi presentation software to onboard new staff and engage them with its company history and culture. "It's easy for us to update it in one source, and we're updating it for everyone," Greg says. "Dad's system of walking the person down the hall and explaining the story of who Harth is doesn't happen anymore. Now that you have more employees coming on, nobody has the time to do that. But it was a really powerful thing, so we created this onboarding passport that any new employee [can use] to basically meet and greet [us all] and walk the halls." Greg often cultivates his social and professional net- works to find personnel who could be a good fit for the business. Recently he bought paint for his own house at a Sherwin-Williams store, and a painter there asked him if he needed a mason. Greg had been looking for a one- man shop to do some repointing and other remodeling projects, as opposed to the bigger, production type of jobs. "Sure enough, that's exactly what his son does," Greg adds. "We task everybody in the company with that responsibility [of identifying potential employees]. Although, ultimately, I think it falls back to my dad and I most of the time, or the sales guys as they're out and about; we're pressing the flesh and asking people. Oftentimes, I will just stop and introduce myself to a trade partner." Harth Builders billed more than $12 million in 2017, when new construction accounted for over half of its revenue, compared with about $7 million in 2016. e company has banked around $1 million in new construc- tion for 2018 but hopes to reach $3.5 million by the end of the year, Greg notes. Remodeling sales should increase from nearly $6 million in 2017 to $6.5 million this year. "e overhead structure of our company is still built around remodeling. For us, a lot of that new construc- tion just fell right to the bottom line, which was nice," he says. "[But] we find that first-floor renovations with a very small addition or some structural work are really the niche for us. ose projects that run $200,000-$300,000 on the first floor are absolutely what we're built for." | DESIGN/BUILD BY THE NUMBERS An overview of the 112 design/build firms on the 2018 QR Top 500 TOTAL REMODELING REVENUE: $699,461,677 TOTAL JOBS: 14,451 2018 REVENUE FORECAST: $809,218,231 WHOLE-HOUSE JOBS: 21.7% KITCHEN JOBS: 19.9% BATH JOBS: 14.6% ADDITIONS: 11.1% AVG. SPEND ON MARKETING: 2.99% of revenue TOP LEAD SOURCE: Repeat business 24.9%, Referrals 22.3% EMPLOYEES: 2,903 TOP CLIENT TYPE: Couple with children TYPICAL CLIENT INCOME RANGE: $150,000 - $200,000 QualifiedRemodeler.com QR August 2018 33

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