From the beginning to the end of any remodel, variables abound and chance may play a part beyond anyone's expectations. When a company succeeds, it does so, in a sense, by reducing that variability, by exerting as much control as possible over the job's every detail.
In the office, where handpicked staff work under direct supervision, a business owner has only himself to blame when things go wrong. But on the jobsite, things are different. Few remodelers staff the tradesmen whose specialty skills and equipment they need on most every project. That means entrusting those jobs to someone else's employees.
But for many, the traditional contractor-subcontractor relationship just doesn't deliver. Especially in the high-end market, where customers and projects are most demanding, it can be difficult to find tradesmen who perform to the remodeler's own standards. Bringing trades in-house is a tempting alternative, but in the end, some companies find they're just exchanging one headache for another.
ALL IN THE FAMILY There has been a lot of talk in recent years about the value of improving remodeler-trade contractor relationships. But establishing sound relationships takes time, and that's after you find a trade contractor who meets your performance standards. Just getting trades to show up can be a challenge for some contractors. Then there are issues of quality, customer service, and scheduling flexibility.
At Design Builders & Remodeling, in Sandy Hook, Conn., owner David Adams says he grew weary of what he calls “the prima donna mentality” of trade contractors. Adams recites a litany of familiar complaints: “Holding us up; not doing things with quality in mind; rushing to get in and out because they get paid by the job, not by the hour.”
In response, Adams established seven in-house trade divisions. Now, under one roof, he has excavation, plumbing, drywall, masonry, concrete, roofing, and landscaping crews, plus a kitchen showroom and a full complement of carpenters. Each “division” is really just a small or one-man crew.
Adams provides logistical support for his tradesmen and feeds them work. But he expects a certain level of ambition, too. Adams' tradesmen work for other contractors as well as for Design Builders & Remodeling, and he offers profit-sharing incentives and encourages them to bring in their own jobs.
Finding the right people, Adams says, hasn't been easy. The businesses are just barely profitable, but even at break-even, they're paying for themselves, which is all Adams really wants.
“In the end, I have the convenience of having these guys when I need them, and the clients are thrilled,” Adams says. “I'm able to get more work because my clients are happy and my stress level has gone down tremendously.”
Better control over scheduling isn't the only benefit. Adams' larger staff, now totaling 25 office and field, has helped reduce his insurance premiums. And, he recently learned, his insurance carrier will still let him carry all of his employees on one policy even if he establishes each trade as a separate LLC.
Adams' “maximalist” approach is atypical, but a number of other contractors have successfully added small or one-man crews to work a single trade. Seattle's Prestige Custom Builders has carried a small paint crew since 1999. The crew is a subdivision of the Prestige home services wing, which handles smaller jobs to keep the $6 million company visible in the community and in front of past clients. Prestige still subs paintwork on larger projects, but uses the paint crew whenever possible.
“Our self-performed labor is the most profitable segment of our business,” owner Jeff Santerre says. “We're in a time-and-material world here, so if we have a given contracting fee and we sub it out, we make the contracting fee; if we perform it in-house, we make the contracting fee, plus whatever we're making on the labor.”
The paint team gives Prestige Custom Builders the flexibility to keep more projects in-house. Santerre will send the team (all bachelors, he notes) on two- or three-week “field trips” to paint clients' second homes in the San Juan Islands. The islands, near Seattle, are thin on good painters, so Santerre loves that he can get his own crew on those jobs.
He also puts his painters to work pre-finishing exterior structures and wood siding, which improves the quality of the work — a huge benefit in Seattle's wet climate. “It's a lot better finish than you get if you send it to one of the siding pre-finishing companies,” Santerre says. “They kind of blow a little skinny coat on it as it goes by on the belt and that's it, whereas we can oil prime it, and paint it, and double coat it if we want to.”