There are several well-known national retailers in remodeling (e.g. The Home Depot) however there isn’t a single, dominant national remodeler.
What are the main reasons that no remodeler has been able to achieve national recognition?
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I believe that the cost for a company to go national is too expensive for a small company without some type of investor. As with any other type of business you have to be registered in all states that you want to do business in, with this the cost of the initial investment has to be able to be recouped by the amount of business that a company stands to obtain by making this type of move. With this I believe that the cost a lot of times out weights the possible return on investment. I also believe that if a company can gain a relationship with a national company that does enough remodeling of their stores, it would make it worth it to obtain all licenses required to be able to do business in these states. The company would have to weigh out the risk and reward of this type of venture.
The skilled craftsperson is an independant breed. They are doing what they are doing because they love their work, want to feed their families and really don’t want to work for others. To reduce the professionallism of what a contractor does to a Box Store mentality…this will fit…and by the way, that’s all we offer, frankly, is offensive to real life situations. Sure, there are businesses which do that all the time…but to have a lasting relationship with clients, eat dinner with them, know the name of their kids and pets, is what will make them remember you, along with the expert restorations? Who wants to detatch from this experience called life and fit it and ship it? Of course, eventually, someone will find a way to further disolve relationships with clients and become like the biggie corporates…but I wouldn’t want that. Biggie corporates won’t be flexible for the elderly, single moms or handicapped…they want the money…if it was money I was after, I wouldn’t be doing what I love, with my own schedule, flexible rates and fine chaftpersonship…money isn’t everything…relationships are. I know of local handiman business’ which charge $80 an hour, pay $10 to an immigrant (no offence) or someone with no skills and frankly rip the unsuspecting homeowner off…then I have to come in and deal with the mess someone else created by remodelling and wasting precious assets, because they could get away with it…we all get what we deserve in the end…Five years down the road, will that client still be happy with the work I did for them before? Will they remember my honesty? They will, and they will hire me again and again…William Hamilton, Owner/Operator of Changes, Refinishing and Restoration… New Cumberland Pa 717 480 1923
In this day and age of anyone who owns a hammer thinks that they are a contractor/remodeler, it is very hard to get and keep your good business reputation. To go larger or even national, you would have to make sure that you have hired the most skilled workers that are able to do more than one phase or portion of the remodel work. It would be very difficult to do this. I know how hard it is to find good, reliable, skilled workers at my local level. How would a business be able to do that on a national scale without truely becoming one of the “McHome Remodeler” box chains? Your company would have to make sure that each location had and maintained the same level of work and reputation that your own local company started with. As far as I am concerned, that would take all of my time - or else I would be hiring how many other people to handle that for me. I do not feel that the quality of work and workers would carry over to being national. How many times have you heard complaints about subcontractors being used by a “good” remodeler and the work from the subs is sub par? How would it then be my company - just gone national? I would rather keep the quality of workmanship at the local level high and reputable than risk watering it down and leaving too many things in the hands of others since I can’t be everywhere at once.
General remodeling projects don’t include significant opportunities for economies of scale. That is, a larger company doesn’t enjoy an economic advantage sufficient to take on the risk of managing and warrantying remodeling projects.
A national remodeling chain might try to save some money on materials, but the building materials business is already very cost-competitive. Also, remodeling customers don’t just want the stock finishes from a limited list of manufacturers.
What about labor costs? New-home builders can manage labor costs by training and managing armies of workers to do repetitive tasks in tract housing, but remodelers need to commit a crew or at least a supervisor to the same site for the duration of the project, performing work unique to that project. A national remodeling company, operating legally, would also have difficulty matching the labor costs of many local remodelers, who operate under the table.
Finally, the liability and warranty problem would be difficult for a national remodeling company. A tract home builder can manage liability through training, quality control, and a repetitive process. And the ultimate liability insurance for most small remodeling businesses is bankruptcy, in which owners who suffer losses are not fully compensated for their losses. A large company couldn’t skirt this issue in similar fashion.
Of course the large home improvement retailers have become remodelers to the extent that these restrictions allow. Home Depot and Lowes install flooring, for example. They install only store-brand flooring, so the material selection issue isn’t a problem. The work is repetitive and the companies offer limited options, so that crews can be found and trained. And they shed much of their liability and warranty problem by sub-contracting the work to local contractors; if something goes wrong, the local contractor’s insurance and bond are the first line of defense for the big company.
Of course big companies still do enjoy some economies of scale. For example, a national company can advertise far more effectively and inexpensively, per prospective customer, than a local contractor can. But these advantages have so far not been sufficient to help a large company become dominant in the remodeling business.
The closests thing to a national builder or a remodeler is home advisory and they dont build they refer contractors. The reason for this in my opinion is costs and trust among home owners. Consider yourself as a homeowner, how willing would you be for a company based out in florida to come to your house in california and give you a free estimate. Most homeowners are getting smarter and smarter and have developed a sense of pricing and what the market goes for. Handyman also threaten contractors ability to charge full price for the work they do.
In the end, local contractors have the better option of pricing there jobs at a rate that make sense for the customer. The price and service should be the same. If you have to factor in warehouse delievery and gas for crew to get to, then prices change fast.
http://www.socalpb.com has the potential to be an all out california remodeling company!
Home remodeling is a passionate, specific business that requires a hands-on approach and personal daily interaction. Formulating a business model that can be nationalized will not work succesfully because the business is so dependent on personal interaction, personal relationships, and trust. It also takes years to develop a skilled pool of subcontractors and craftsman that can provide the service required on a day-in day-out basis, and this also, cannot be easily recreated.
I interact with my clients on a daily basis - if that get lost or watered down, then I don’t have a business anymore.
The architect gets the credit for the building that has been built. General contractors are like the secret service they do all the hardest part of the project, deal with all the stress and responsibility, but at the end the credit goes to someone else. We do have references and word of mouth in the area we work around. It will be very hard for us to be recognized nationally, because most of us work locally.
Their are national remodelers such as you mentioned, Home Depot. Dominant being the key word. Lowes, 84 Lumber, Home Depot and etc… could without a doubt in my mind take a national status in one move. Instead of paying a sub contractor peanuts which they all do based on personal experience. You pay a contractor 90% of installation cost at state averages, corporate keeps the 10% finders fee and also contractor pricing profit as normal from in store purchases from let’s say the pro desk or contractor pricing. Something is better than nothing which is what they have now. You still keep materials going out from 18-24%GP. That way a normal $7500.00 contracted remodel job isn’t over sold because of overhead and turned into a $10,000.00 job. This in turn, loss of a contract and given to the lowest bidder. Lowest bidder never being corporate. Potential Multi Billion dollar industry. Everyones getting rich, not just the guy I would like to drag up on a roof and bust his nuts for one day. Yes, you know who i’m talking about. It’s not like an adwords campaign and simple economics by loading your limits up which in turn makes you pay less than the bidder below you. I could go on and on but who wants to spell it out for them. They will never get it because investors want the most now. You knowthey could learn something from a guy I sub contract to once in a while. “Don’t get rich overnight, get rich over time!” If anyones reading this has financial backers and wants to go national, “DON"T GET RICH OVERNIGHT< GET RICH OVER TIME!” Guaranteed within 10 years you will have 5 distribution centers spread across interstate 80. Keep it honest and you wont get hit with “Corner The Market.” Good Luck and Godspeed
It has been my experience that many homeowners would much rather hire a reputable local contractor than a large national company. I believe the reason for this is in large part due to the fact that your local contractor can give more of the personal touch homeowners are looking for when it comes to remodeling thier homes. Your local contractor is also more likely to spend the time nessessary to guide the homeowner through the remodeling process. Your local contractor may choose to hire or sub out parts of a project to one of the national chains but he or she will still be the buffer between the homeowner and the sub, therefore making an otherwise generic feeling transaction more personal.
I feel the answer in this matter has a lot to do with all of the individual states and counties. They are beginning to make it virtually impossible to get approved as an authorized licensed out of state contractor when applying for new licenses in other states which is truly unfair to us. I would be able to expand 4 states right now if they haven’t given me issues with approval process and status. I feel anymore that if you do not claim a residence or office in the state you are trying to expand to, you are being denied. The individual townships as well are making it harder for out of area contractors to pull permits, seemingly to make it easier for the local contractors to get the work instead, not saying that’s the reasoning for sure, but that’s my belief. There should be no reason why we shouldn’t be able to expand, but if we are not a large corporation holding shares or offering shares, we can count our looses anymore. It was not like this 5-10 years ago. It has really gotten out of hand and this is my reason that I believe there are no more nationally renowned contractors with a good reputation. I would love to do nothing more then to really expand out there,but have been denied or held up in a lot of their processing as they call it.
I would say your best bet is dealing with sears, or home depot. They do background checks on there sub contractors.
Actually there is two: internationally successful shows Holmes on Homes and This Old House. Both travel to various areas. It all starts because they love what they do, are knowledgeable, have high standards and do not take “no” for an answer. They get results. Something that is truly lacking today.
I would elaborate more but there are already other answers I would only repeat.Construction is one of the few few industries left these days that still has to operate the old-fashioned way: face-to-face and hands-on. You can’t build an addition for someone or remodel their kitchen by simply sending some emails or making a few phone calls. Each project is loaded with a whole set of it’s own specifics and variables, and requires a tremendous amount of management and supervision to insure that it’s done right and the customer gets what they want. What all this boils down to is the fact that construction projects MUST operate on a local level. Tradesmen and Project Managers need to be on a jobsite daily, so travel time is an important factor. And it would be extremely difficult to scale a remodeling business up beyond a local level because the amount of management and skilled labor required to do so would not scale down like it does in other businesses. 10 different jobs in 10 different cities would require 10 completely different crews. It would be a management nightmare, and the only way to conceiveably make it work would be to significantly increase the amount of management, which would probably make the whole thing extremely cost prohibitive.
My guess is that this isn’t the first time someone has tried to figure this problem out, and it probably won’t be the last. But there’s a reason no one has been able to figure it out yet. Sometimes we just have to accept that there are certain things that will simply never work.
There are several. Ever heard of Home Depot and Lowes? ;D That’s the scale you’d have to be to pull it off, and they just sub-contract to local contractors. Buying from them essentially means you either get poor quality or you pay a high price (or both).
Remodeling is very involved and diverse, so the contractor also needs to be. With the abundance of different scenarios, unseens, and surprises on most every job, to go too big, would sacrifice quality control, and flexibility that is necessary to be successful. Just the task of finding quality craftsmen nationally would be a serious undertaking. Basically, it would be virtually impossible to develop a large scale business model that would develop the relationships and subsequent referrals that are so critical to successfully running a Remodeling Company.
There have been several to attempt being a national branded remodeling company. They include “Sears, Home Depot, Lowes The Great Indoors - Owned by Sears, Expo - Owned by Home Depot.”
I feel the main reasons the fail is due to size of organization, lack of responsability, and procedure more important than the client.
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The size of the organization requires multiple levels of paperwork. regulations on procedures, and overlaping departments
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My experience has been that many large companies involved have too many people with their hands in the cookie jar. Each one has specific job descriptions that over lap. One person can measure but a different person enters the data and a thrid person orders the materials for a project. Then when the project materials are incorrect, everyone involved point fingers at the other players.
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Procedures can also burden a companies ability to properly deal with the nature of a remodeling project. A smaller company can adapt as needed to provide the services required for a task. Such as working after hours or weekends. Many of the Big Box stores regulate the hours and flexability of its workers and or staff.
The value of a local business owner that specializes in a specific type of work such as kitchen and bath remodeling or Home Theaters can out manouver out perform and we can do it in a cost effective way. The large box store simply can not compete and mantain a profitable business. Sure thay can win jobs, they can upset the balance in a community when they try. But before to long they will upset their client base and their stock holders. Once that is done they will simply pack it in and close it down just like - (Sears - The Great Indoors and Home Depots - Expo)