Have you ever wondered how another remodeler figures his markup? What he pays his receptionist? How he fired the loudmouth do-nothing on the framing crew? Local association get-togethers are useful, but competitors won't share everything with the rest of the gang over dinner. But peer review groups can provide that intimate sharing and can produce dramatic improvements in a remodeling business.
The groups bring together similarly sized, noncompeting remodelers usually each is from a different market area for two or three meetings a year. Financial statements, marketing ideas and personnel problems are discussed in an open and analytical format. Three key groups cater to remodelers: The Remodeler 20 Clubs operated by the Remodelers Council of the National Association of Home Builders (www.nahb.org), Business Networks (www.businessnetworks.com) and Remodelers Advantage (www.remodelersadvantage.com).
"The great aspect of the program is that it groups similar companies that have a vested interest in each other's success, because the more successful you become, the more ideas and advice you bring to the table for everyone else," says Melanie Hinton, communications manager of the Remodelors Council.
Dan Bawden, president of Legal Eagles Contractors Co. in Houston and a member of a Remodeler 20 group, says, "It's the most valuable thing I do for my business. There's nothing locally where you can bare your soul, especially your financial soul."
The groups typically involve 12 to 16 companies of similar size in terms of revenues. The groups tend to be stable, usually adding one new member a year. Remodelers can join by invitation or by signing on through the operating group.
"The groups focus on best practices, where everyone can compare how they operate, and everyone else can find new ideas that already are tested," Bawden says. "No matter how good you are, you learn new things you can use."
Shawn Nelson, president of New Spaces in Burnsville, Minn., agrees. "The biggest benefit is that you create a group of peers who gain an extremely good understanding of your company and operations, so they can provide very specific insights and recommendations," he says. "They know your market and your types of projects, so they can tell you what will help you."
Some larger companies have shied away, he notes, believing they will contribute more than they'll get in return. "It's a missed opportunity for them, because there are many companies in these groups that are extremely successful. They're just polishing their methods to do a little better. Everyone can learn how to improve their companies."
While remodelers pay their own expenses for the meetings, most are quick to say the trips are a bargain in terms of what they get for their money. "It's not cheap, but it pays off," Bawden says. "I always come back with ideas that more than offset the financial burden
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