55 N. Avenida de la Vista Tucson, Arizona 85710 Eric Schneider spent 18 years building his remodeling business by doing exceptional work, winning awards, building a reputation and generating lots of publicity. The effort paid off as the company grew to a $2.5 million business. And then early last year, he left. Through a transitional process that required the establishment of several new systems, he turned over control of his business to his former accountant and didn’t look back. Today, he received weekly updates and salary but offers only advice on how to run the business. “I’m 52 years old, and I didn’t want to wind up being 65 and feeling that I missed an opportunity to so something else with my life,” says Schneider, the new chairman of the board of Eren Design & Construction, Inc., in Tucson, Arizona. “I wanted to do other things as well as run my business, and I found a way to stop that I could exit from it without causing it to stop running well.” The change wasn’t made overnight, and it wasn’t done without making significant alterations to the business. But achieving it wasn’t as difficult as most remodelers might think. “What we did, anybody can do,” says the new chief executive officer, Janice Donald. “When an owner’s passion is no longer expressed by running the business, it might be time to move on. For some, it would be easy to do and for others it would take more effort. But for all, it might make good business sense.” The concept first presented itself to Schneider in 1997 when he won a National Remodeling Quality Gold Award. One of the speakers at the event, Silver Award winner Bill Asdal, CGR of Asdal Builders in Chester, NJ, discussed using his business to leverage other financial and personal interests. He stressed that remodelers should know why they’re in business and what the purpose of their business is. “It was the most empowering thing I’d ever heard,” says Schneider. “I wondered if I could do that, and if I stepped away, if my business would be able to run itself. Little did U realize that I’d already inadvertently set up my business to make that possible.” The secret to exiting a company smoothly relies on several key elements, with the fundamental one being the need for a self-reliant, proactive staff. Eren had long been employee oriented, with an attractive benefits package. This included holiday, vacation and mental health leave along with other perks, such as an open-book financial approach and company-wide bonuses based on profit performance. “My position was that Eren was the best, and only the best worked for us,” and we showed that in how we treated them,” he says, “we focused on camaraderie and employee morale, to ensure we stayed on the cutting edge by allowing our employees to use all their skills.” This resulted from a two-pronged hiring process that focused both on production abilities and people skills. “We always hired people who could take the initiative, be proactive and solve problems,” he says. When he began thinking about his exit strategy, he first focused his employees on team-management concepts and letting them take charge. “I started asking them to take on more responsibilities-and I paid them for doing that.” Donald was included, even though she wasn’t an employee. She began working with Eren in 1992 as its freelance accountant, but her role quickly grew. Eren operated as a home-based business, and Schneider used Donald’s services to facilitate his expansion. She began paying bills, billing clients, and answering the company’s phone and serving as a primary office for subcontractors. The company didn’t expand into it’s own office space until 1997. After Schneider outlined his goal to Donald, they brought in a facilitator, Michael Kuropatkin, to evaluate employee’s strengths and weaknesses, develop a program to strengthen the weaknesses, define the company’s vision and mission, and craft a strategy so Schneider could systematically lessen his role in the business. Kuropatkin conducted one-on-one interviews with the staff and used standardized personality and skill-evaluating tests to define the company’s available skill set. He also worked with Schneider and Donald to create a plan that could achieve the desired transition. A key part of that program required Schneider to put down on paper all of his duties and procedures. And that was a challenge, Donald says, because “Eric was wearing about 19 hats.” This process required him to define each job clearly and systematize its function, Schneider says. “I had all the procedures I used in my head, which was all right when I was doing them all. But I had to create systems that could both be replicated by others and reviewed whenever necessary to ensure changes were evident and deliberate.” Schneider’s initial goal was to allow him to focus on the activities he wanted to do and let go of those that others could do easily. The first to go were financial activities. “My strengths are in my people skills—which translates into selling the jobs—and creatively designing,” he says. “Day-to-day number crunching was not of interest to me.” Those duties went to Donald off-site. With those strengths in mind, Eren began shifting duties internally. The first change came in having a former on-site superintendent take over estimating. Schneider and the new estimator did parallel estimates on projects, comparing their final numbers to see where they differed and why. Once he and the estimator could come within 1 to 2 percent of each other, Schneider relinquished that responsibility. “I let it go and never looked back.” Schneider then wrote down functions and duties to cover his production system. This ensured a smooth process after the contract was signed, from showing up on the hob the first day through the warranty period. “That aspect was pretty easy to shift with the people we had in place because they were geared to customer service.” He says. The next transition area was drafting, and mechanical and structural shop drawings already were being subbed out. “Our financial numbers showed we could afford to bring in someone to do all of our own drafting internally.” He says. He paid for an employee to go to school to learn CAD programming and take this function off his own plate. Sales was next. He found a strong candidate through a newspaper and turned over this function, too. “When I left sales, I knew the transition was complete,” he says. “That was the hardest part for me to give up.” That only left managing the company—and he realized he didn’t enjoy that any more than then financial side. “I have strong people skills, but they’re not geared to nurturing and managing interactions.” He says. “The care and maintaining of a staff, and the challenges of training, building morale and handling gossip are not my strong suites.” Turning over that aspect to Donald, which was done in February 2000, when she joined the company as an employee, wasn’t difficult—it was just Schneider’s last direct contact with the business. “The hardest part was giving up control of the company.” He says. “Everything had been done my way, and now things would be done differently.” Ironically, Donald hadn’t been planning to take on such a key role; she had simply been helping Schneider achieve the transition as an outside planner. “I wasn’t contemplating joining the company as an employee.” She says. But in January, Schneider was becoming antsy to move on rather than provide only the managing aspects he was unenthusiastic about. “I told him I thought I could do it if he didn’t want to.” Donald says. Schneider didn’t hesitate. “I asked her how soon she could do it.” It turned out she could take over pretty quickly. Donald sold her business in three weeks and joined the company in February as CEO. Then the final transition began, leaving employees concerned. “I tried to stress two points,” Schneider says. “First, the company was changing and the employees had to get behind that or consider of they needed to move on. Second, I had to convey that it was now Janice’s vision, I supported that, and I was not coming back.” That wasn’t as easy as it sounds, of course. “During the transition, something would need to be done, and I’d volunteer to do it.” Schneider says. “Janice would stop me and suggest someone else do it instead. People had to keep interrupting my habit of doing whatever had to be accomplished. My goal became not to get in he way.” By September, the eighth month of the process, Schneider and Donald considered the transition complete. Schneider hasn’t been into the office since March—a month in which Donald bought additional trucks and created a new magazine-advertising campaign without Schneider’s involvement. The transition has been successful, but they agree they would do it a bit differently if they had it to do over. “In hindsight, we should have taken the change more slowly to allow people to adjust,” says Donald. “The processes were there, but the employees and the customers both got more nervous than we would have liked or expected.” Schneider’s being around as the putative “boss” undermined the new approach, he adds. “Making the transition with me around left a back door open for second opinions when the staff wasn’t sure about something,” he says. “I wanted to be visible about my support and reassert that I wasn’t in charge, but it was difficult to convince everyone. Change is really hard to accomplish for people—they lock into what’s always been done and don’t want to change that approach, even if that isn’t the best way to do it any more.” The result of the transition for Schneider has been time to recharge his batteries and enjoy the fruits of the successful business he built. “I’m into a decompression period that’s allowing me to assess my goals and freedom,” he says. That translates into spending more time with his children, aged 10 and 12, and focusing on his passions of gardening and landscaping, as well as his own personal growth and health. Whether other remodeling business owners intend to relinquish complete control, simply going through the process creates a stronger business, Schneider stresses. “Developing this business model ensures the company doesn’t rely on one person who can’t be replaced,” he says. “It helps the company maximize its resources. It empowers your people to continue growing, makes them proactive, and it protects the company from ay turnover.” As companies grow, they require many more hands to run smoothly, he points out. “This approach creates a team that can pick up the ball, and it provides systems that create smooth communication.” He says. “Without these systems, the company will founder when it grows too big for one person to handle.” Whereas with the systems in place, it’s simply a matter of how far off the throttle and steering wheel the owner wants his hand to be. - By Craig A. Shutt, Senior Contributing Editor, Professional Remodeler magazine, February 2001 During an INS audit, you discover that a third pf your employees, many skilled craftsmen who have worked with you for years, are illegal aliens and must be fired. The hospital calls. A sub who quit your job has fallen down a stairwell. He claims you’re responsible for his injuries and, later, for $70,000 in medical bills. The attitude of your belligerent, short-tempered partner decimates your client A-list. Your transition to CEO is marked by a nosedive in leads. Your key man quite after 17 years. Your wife leaves you. A client refuses to make final payment. The economy sours. Suddenly your debt-to-equity ratios don’t look good to the bank. You’re forced to pony up $350,000 in personal assets to retire your debt. Each of these scenarios happened. And they can happen to you. Are you prepared? Read on for a bloodless primer on how to save yourself, your employees, and your company from ay bomb that may land on your lap. Accounting for Business You are an outsider whose job is to take the helm of an 18-year old family-run business. In a backlogged market, your leads plummet 50 percent. That’s the bomb that landed in Janice Donald’s lap after she was hired as president/CEO of Eren Design & Construction, a 15-employee, $3 million a year, remodeling and custom home building company in Tucson, Ariz., owned by Eric and Ellen Schneider. The first months were toughest for Donald, who came on board after running an accounting services firm for 30 years. Her clients included Eren. A production manager and an estimator couldn’t adjust. “They didn’t want a woman in this position,” Donald says. “They didn’t see that my vision would carry this organization forward.” The naysayers quit, and the company’s vigor returned. Donald surveyed the lead drop-off and began a direct mail campaign to targeted homeowners, architects, and engineers to feed the image that Eren is built to last and isn’t solely its owners doing. She wants to bolster the company’s 30 percent base of referral leads and counteract community reaction to perceived uncertainty. The CEO is working with a coach to develop a business plan. Ultimately, Donald thinks the best strategy to smooth the transition may be employee ownership. The move would cement Eric Schneider’s desire to have the company reward him for life while also building loyalty to Eren’s legacy. Here’s what Donald suggests for transitioning leadership.
Cat Scratch Fever Do you take your health and relationships with those close to you for granted? Gary Porter of Dayton, Ohio, knows what happens when you lose both. Soon after he founded GA Porter Construction in 1976, his wife left him. With the help of his brother, he survived that loss and continued to build his $350,000 company. Years later, he found himself gripped by pain. He learned his immune system was attacking his body’s nerve endings. “There’s a cluster in your back, and it felt like someone stuck a knife in it and was twisting it constantly,” Porter says. Porter wrestled with medications that disrupted his sleep and made him high as a kite. He recovered from his common variable immunodeficiency only to have a relapse-triggered by a cat scratch. Over two years and eight trips to the hospital, it took seven surgeries to clean out the pockets of infection. Porter’s business survived because of his veteran office manager and a carpenter on staff for 25 years. But volume plateaued and profitability vanished. Porter did what he could from his hospital bed to help cover his $1000,000 overhead and protect his 40 percent margin. Here’s what he learned.
Parting Company His clients told him they’d had it with his partner. They couldn’t get along and they refused to do business with him. Glen Borkowski, who runs the $350,000-a-year Kraftwerks Remodeling in Tinley Park, Ill., felt threatened. It was not one but four core clients who came to him. He wondered, “How much longer do I have to wait before everything erodes?” Borkowski and his partner sat down. The partner was nonchalant and suggested that one buy the other out. That’s what they did, and a mutually trusted accountant brokered the deal. In the end, Borkowski lost only one client and kept all his employees. Michael Menn of Design Construction Concepts and his partner, Andy Poticha, didn’t fare as well. The Northbrook, Ill., firm teamed with a builder to erect and sell a $775,000 spec house. They lost $250,000 when the builder forged Menn’s signature and didn’t make loan payments to the bank. It took the partners three and a half years to repay the $75,000 in embezzled monies and $175,000 in accrued penalties when the builder disappeared. Know Who You Hire If Dennis Allen’s story carries a moral, it’s that the road to the INS is paved with good intentions. Allen Associates of Santa Barbara, Calif., was helping one its talented Hispanic stone masons obtain citizenship. When the attorney’s fees bore down, the employee halted the process, didn’t tell Allen, and the U.S. Immigration and Naturalization Service stepped in. An employment audit ensued, and 25 workers, some skilled finish carpenters and masons, were found to be illegals with bogus paperwork. Allen had to terminate this third of his work force. “We had trained them through the years,” the remodeler says. “They weren’t easily replaceable. Allen estimates it cost more than $150,000 to hire new laborers and craftsmen and to deal with the INS. Fortunately, there was no fine, because the company had I-9 forms and copies of the employees’ supplemental paperwork, such as social security cards, driver’s licenses, green cards, or passports. “You’re not required to verify those papers,” Allen says. “And the INS wasn’t concerned about trying to send these guys back to Mexico or wherever. But by the end of the process, the INS guys were like friends. You could tell they felt very bad.” The workload got spread over existing staff. “It rocked us on our heels,” the remodeler says. Allen used employment services until replacements could be found. Now if Allen learns a hire is illegal, he doesn’t hesitate –he lets them go. But if he isn’t certain, and the employee shows required documents, there’s nothing more he can do. “I’ve though about talking with our congresswoman, but all I really can do is raise questions. The worst thing is you feel like you’re at a great competitive disadvantage if you get hit by this and all your competitors don’t. There’s not an element of fairness to it.” A footnote: Since the IRS raid on Allen’s firm, two other Santa Barbara-area contractors have been visited by the federal agency. Stay in tune Divorce and salary issues hit employers between the eyes-both kill production and the bottom line. One Ohio remodeler, who asked not to be named, helped three employees through divorce, one after just weeks of marriage. “He found her with another man. He asked, ‘What do I do?’ I said, ‘Dump her, right now.’ That’s the only time I’ve given advice.” Otherwise, the best tactic, he suggests, is to baby employees, gently suggest that when they’re with clients, they boost their low enthusiasm. “They lose weight, get sick, withdraw,” the Ohio remodeler says. “You can’t nag. If they’re not selling, you take in their workload.” Salary issues can be insidious. An employee “came into my office one day and said, ‘I want $30 an hour, full medical benefits, time-and-a-half, or I’m leaving,” relates a New York remodeler. “I said, ‘In the midst of a job you’re going to hit me with this?’ “I gave it to him. But then, more and more demands.” The employee called in sick. Then, to pump work out, he logged overtime, blowing the budget. “So I looked at him and said, ‘You’re not profitable to me.’” The worker finally quit. David Saunders of D.S. Saunders & Co., Kent, Ohio, learned after a veteran carpenter quit that it was because of low pay. But there’s a happy ending. He had brought in an office manager so he could join this man and another in the field. That’s when the veteran quit. Years later, the carpenter told Saunders he thought he would have been expected to carry the new overhead from the office manager and that profit would go elsewhere rather than increase his income. Although he claimed his pay was low, Saunders says that, considering benefits, it was competitive. The man started his own business, grew tired of the hassles of self-employment, and returned soon after confiding his story. His pay is the same as if he had stayed and received regular increases. Saunders says the incident has made him more communicative: “I thought I was doing a good job of that, but evidently, I wasn’t.” Get a fix on safety You can tell where Mike Holmes’ story is going as he tells it. “We try to keep the business on a family level,” says the Aurora, Ill., contractor about his company, Creative Carpentry Remodelers. “This guy wasn’t working out and we made the mistake of carrying him through the holidays.” After he rated his skills average on a company quiz, then showed attitude, Holmes took up the new guy’s challenge and put him in charge of a job. He couldn’t deliver. Then, learning he was about to be fired, he developed a back problem. Although Holmes discovered a $40,000 workers’ comp claim the employee won at another company that he hadn’t mentioned on his resume (supported by the same doctor and attorney) his insurance rep said it would be cheaper to settle the $65,000 claim that fight it. It took Holmes three years to rein in his premiums. John Marzulli of Emerald Contractors, Tarpon Springs, Fla., shares the Illinois remodeler’s pain. He and his personal liability lawyer fought a $70,000 claim for two years. It was filed by a framing sub who quit a job, returned announced, and fell through a stairwell after removing a plywood barrier. He claimed workers’ comp as an “employee.” When Marzulli refused to pay, the sub sued. Marzulli’s liability insurance kicked in. His meticulous job notes and safety program aided his lawyer, and he triumphed. “This is were the tenacity comes in, the stubbornness,” Marzulli says. “This is where I’m right and I’m going to prove it.” But tenacity isn’t enough. “I have cash reserve systems, job cost systems, marketing systems, excellent employees and subs, no debt, a great work ethic, and a great reputation for honesty, ethics, and integrity. Guess what? Even with all that, there’s no guarantee from failure.” At that point, personal resilience can be one of your most important characteristics. “I’ve watched more successful, brighter, smarter guys go out of business. Somehow, I’ve survived.” The triple threat What do remodelers fear most? That their business will be ruined by a sour job, too much growth, or economic downturn. Those who have struggled through these calamities know there’s no easy remedy, but resilience and systems go a long way. “The way to bombproof your business is to be absolutely fanatical about the umbers.” says John Marzulli of Emerald Contractors. “You have to be fanatical about overhead, what it costs to do business. If the economy turns and you can’t meet volume, can you go to less production, tear things to the bone, survive?” The contractor, in business since 1971, knows of what he speaks. He survived 1982’s recession and 21 percent interest rates by wrangling crazy deals. “I took a motor home as a down payment on a house and wholesaled it to get the cash.” he recalls. He also lost $350,000 to banks in 1989 when officials re-adjusted his ratios, leaving him holding a $350,000 in “bad” debt. “I could retire on the money I’ve lost,” Marzulli says, “I don’t say that boastfully.” The contractor now takes 10 percent of every gross margin dollar –before expenses or his salary –and puts it aside. His $80,000 in investments and liquidity could sustain his $860,000 business for 10 months without work. The economy has never been that bad, he says. Tim Modine of Associated Contractors knows that pinch of economics. “We had all our eggs in one basket,” the Auburn, Wash., remodeler says. “We had one key customer that pretty much went out of business when the stock market took a change in 1998.” About $9000,000 of Modine’s $1 million business –doing jobs such as installing windows and siding for real estate investment trusts –disappeared. That was in 1998, when investors turned to tech stocks, and REITs bottomed out. Modine disbanded almost his entire 24-employee work force. He scrambled for work. With resilience, he and his partner broke into full-service residential remodeling, and they’re back up to 10 employees. The company has diversified, now doing cabinets, slid-surface countertops, and HUD contracts. Carl Hyman of Alure Home Improvements, East Meadow, N.Y., recalls 1990’s downturn, which coincided with his ill-timed switch to kitchens and baths. “In the height of a recession, we moved to a new location, which takes your eye off the ball,” he says. “My wife ad I were working seven days a week, pretty much day and night, taking home no income. We did that for two years and had to shell out $180,000.” Only his scrupulous saving habits rescued him. Now, the debt’s gone. He reinvests half the company’s profits into the business, now a $15 million concern employing 45. Diversification has helped, as has outstanding growth, sometimes 30 percent annually. But to curb runaway growth, Hyman employs another strategy: “Raise your prices 5 percent. You wind up cutting down the work 10 percent, but plain and simple, your net profit goes up.” Because most business owners can’t administrate, sell/estimate, and produce the work alone, the function they usually jettison is administration, says Jud Motsenbocker, Jud Construction, Muncie, Ind. “The reason it’s important on a downturn to have a person in the office is so that you know monthly what your overhead is, exactly where you can squeeze, and what your markup has to be,” he says. Good cash flow and reserves carry you through difficult times, but you must replenish the business. Many of the systems needed to prepare for a downturn also protect you from manic growth or a job going bad. A New York remodeler, who asked not to be named, recalls a job last year where everything started well. The client was happy, paying on time, and then, just before the job closed, the payments slowed. Yet the project was peculiar from the start, with the job beginning at $375,000 and finishing at $850,000, and 48 change orders that stretched it from five and a half months to 13. “The customer didn’t want to hear it took an additional seven months,” the remodeler says. “According to him, had we scheduled and managed the job properly, it would have gotten done in the same timeframe.” The project turned out beautiful, but he customer is withholding $35,000. “Our fatal mistake,” says the remodeler, “was not indicating how much time that particular change order would add to the job.” Michael Strong of Brothers Strong, Houston, has sued two clients for nonpayment. “You pay an attorney four grand to collect two grand for the principle of the things,” he says. “But you sleep better knowing you’ve protected your permutation and stood up for your employees and trade contractors.” The third side of the triple threat triangle is growing too fast. “When I started my business, no one said bigger wasn’t better,” says Marty Schirber, who has owned Castle Building and Remodeling of Minneapolis for 24 years. “No one knew growth wasn’t the right direction to go.” Schirber was almost felled in his fourth year by a $260,000 job that cost $290,000 to complete. He borrowed money from his parents to dig himself out. “It wasn’t one of my shining moments,” he says. “If you have your systems set up,” says Motsenbocker, “they won’t allow you to have too much growth.” Keep a foot on the brake, Strong cautions, and repeat the mantra for the triple threat of recession, rapid growth, or a bad job: systems, systems, systems. - By Joseph F. Schuler Jr., Senior Editor, Remodeling magazine, March 2001 According to Realtor Magazine, $143 billion went into home improvement projects nationwide in 1999, much of it without hope of recouping costs if and when the home is sold. That’s because most remodeling is not about resale but about improving the owners’ lifestyle. Lifestyle improvements are often made for emotional reasons and can be shortsighted. So what projects make good sense? We asked builder/designers, real estate agents, and an appraiser-all with very different perspectives-what they thought about remodeling projects as long-term investments. “The best value added is square footage that’s air-conditioned and heated,” says Andrew Gregory of Long Realty, who sells houses across a wide price range. “Perhaps a master bedroom suite with walk-in closets and 10-foot ceilings..., if possible.” Long’s Janell Jellison, who specializes in high-end homes, would redo the kitchen and bathrooms. Greg Miedema, owner of Dakota Builders, agrees and is also enthusiastic about replacing windows. Realtor Magazine’s annual Cost vs. Value report calculates the national average of cost recovery for the 11 most popular projects the previous year. The changes recommended above are among them. Although a national average does not necessarily apply to Tucson (and we’ll get to that later), the relative return rates are instructive and in some cases surprising. For example, a minor kitchen remodel ($8,655) recouped 81% in 1999, but a major one ($31,090) only 70%. A home office ($8,356 for room conversion, cabinetry, and rewiring) returned only 50% in spite of all the attention given to telecommuting. “Have a plan and stick to it,” counsels Bayard Auchincloss, Realtor for Tucson Realty & Trust. “The most expensive words in remodeling are ‘While you’re at it…” Master suite Frequently a master suite is an add-on that includes bedroom, bath, walk-in closets , and an extra space for watching TV. (Right now bedrooms “libraries” are in.) The national average cost last year for a 24’ x 26’ carpeted bedroom with dressing room and tiled bath (whirlpool tub and separate ceramic shower) was $42,826. In “hot markets,” returns were as high as 90%. Alternatively, a master suite can be carved out of existing space, says Janice Donald of Eren Design & Construction, Inc. If the goal is simply to create privacy, quiet, and more luxury, this may be more cost-effective (No new foundation and roof or expansion of heating and cooling systems). Aesthetically, a well-done redesign of existing space can be just as appealing as a whole new wing. However, Jellison points to the frequent mistake of using an existing garage for expansion, which can seriously destroy the flow of a house plan. Better to look at adding on than to wind up with an awkward traffic pattern. If you love your location but have a small lot or want a bedroom with a view, a second-story add-on can be good (if your neighborhood’s deed restrictions allow it.) The secret to any addition is to not be able to tell where it begins. This is especially important, Jellison says, if you have a historic property. Doing it right requires research into the appropriate period design. Nationwide, an investment of $73,553 in a second-story addition (bed, bath and family room) yielded an average 72% return in 1999. Owners always should look at the situation relative to surrounding homes. Tax records for an established neighborhood usually show some extremes. If the more expensive houses are your immediate neighbors, then your expansion will seem coherent. If the houses on both sides and across the street are not improved, you probably won’t recoup as much. In some cases, a simple change is the best change –and one you might not have considered, You can replace windows with French Doors that lead to the garden for $300-$1,000. Money saved can be lavished on a private outdoor “room” with a fireplace or fountain. Our door spaces have a 50-60% return. Bathrooms & Kitchens Houses 20 years old and older probably need new kitchens and bathrooms. While these are the most expensive areas to remodel, improvements add lasting value, and you don’t have to replace everything. Sinks and tubs and even cultured marble can be recoated. Add personality by simply putting interesting drawer pulls on built-in cabinets. Timeless and classic styles work best from a resale point of view. Or take a cue from new luxury homes –remarkable for their gourmet kitchens featuring granite countertops, professional appliances, and two old-fashioned amenities –walk-in pantries and dumb waiters. Minor kitchen remodels return the most value of any project –Realtor Magazine cited 81% on an $8,655 investment. This includes cosmetic work on cabinets and upgrades on flooring, plus a new, energy-efficient oven and cooktop and mid-priced sink and faucet. The major kitchen remodel, replacing old cabinets and appliances and adding a microwave, disposal, and custom lighting, returned 70% of $31,090. A bathroom remodel averages $9,135 and recoups 71%. This means replacement of the fixtures, adding double vanities sinks, tiles on the floor and walls, and new lighting –all in a 5’ x 9’ space. This compares to a 6’ x 8’ full bathroom addition costing $13,918, which yields a tiny bit more at resale (72%). Miedema thinks remodeled kitchens and bathrooms can yield a full 100% if done by qualified professionals. What makes a guaranteed improvement, Jellison says, is tile –as long as it is neutral in color or Mexican Talavera, which is timeless in Tucson. Talavera tiles might not be as wise in Maine. Culture counts. Designers, builders, and architects can show you what’s available and what can be done with your house, but ultimately you decide what you want. Sometimes what you would enjoy most may not be practical at all. A common misstep is adding a swimming pool that is not in keeping with the neighborhood either cost-wise or aesthetically. A knowledgeable lender might even turn you down. Window replacements are tricky. Nationally, the average return for 10 new aluminum-clad windows is only 56%, higher in cold country. In Phoenix the return is 35%, in Albuquerque 75%. Miedema thinks it’s 70% in Tucson. Energy savings can make the difference if people are aware of the facts. “Wood frames have 1,000 (yes, 1,000) times the insulating quality of aluminum frames,” Miedema says. Other Considerations You can’t look at remodeling costs without looking at the emotional value. This issue surfaces, says Eric Schneider, founder of Eren Design & Construction Inc., when a newly married couple wants to renovate a house one of them has lived in for years. Sometimes it’s way out of date, but the motivation might be to rid the house of “old energy and ways of being.” They’ll do whatever it takes just to support their relationship. The Realtors all seem to agree that it’s important to keep a house up-to-date. Auchincloss called our attention to a home that sold quickly in 1997 for $305,000, then was completely redesigned. It’s now priced at $849,900. In the process it grew from 4,348 to 6,100 square feet. The original was flat-roofed Territorial style. By adding porches and enclosing a court with a pitched roof and arches, the house was given an impressive Spanish look. It gained a gourmet kitchen and lost a pool. But the telling detail is the convenient location in the desirable “old” Catalina Foothills, where there are no lots left. Appraiser Steve Cole of Southwest Appraisal Associates cautions that even if the neighborhood is prime, home values will fluctuate over time due to local issues hard to forecast, such as environmentalists’ concerns, energy costs, increased traffic, and schools’ rising or sinking reputations. – By Karen Dahood, tucsonHOME magazine, Winter/spring 2001 A state-of–the-art bedroom with three video systems, CD burner, DVD and sophisticated sound – for a young teen? A girl’s suite with 19th-century elegance; including a claw-footed bathtub? These siblings certainly are setting the pace, but they are just two amount many who are enjoying their parents’ prosperity – and their parents’ concern. Amenities for the small fry are part of the nesting instinct that is sweeping the country with the baby boomers’ reordering of priorities. For example, in Tucson, Foothills living has two sides – it is generally lush and peaceful to be in neighborhoods with large lots close to nature, but it also can be isolating, all the more so if you are a new kid on the block who doesn’t yet drive. What could make more sense than to invest in all the entertainment, recreation and convenience they can afford? Almost half of the year, private swimming pools are centers of social life for young teens. In addition to spectacular lighting, outdoor kitchens and super-slides some have decks big enough for dancing and all the wiring needed for occasional deejay appearances. There might even be a skateboarding surface, including ramps. Nearby, the ground floor theater helps the host parents relax (if they aren’t fielding calls on multiple phone lines, monitoring the music by computer, or watching arrivals and departures on cable TV). Choice country club neighborhoods manage to combine privacy for families and freedom, with homes surrounded by top-notch shared facilities, including quiet roads and grounds for walking and biking and “beauty spots” for weddings. Security systems have come a long way, and may even influence how a home is sited and landscaped. Houses hanging on mountain slopes have an advantage, as they are narrowly accessible to people on foot. Owners come and go through garages that lock behind them. In one deluxe Tucson community, a meandering stream requires visitors to cross a footbridge to reach those hosts – not exactly a moat, but certainly suggestive of an island fortress. And like centuries-old stately homes tended by the National Trust, today’s mansions might have valuable collections of art and antiques in view of cameras linked to screens watched by round-the-clock guards. In the same treasure-filled homes, there may be a “control center” where owners can adjust temperatures in different zones and open and close doors and windows. Draperies and aluminum shutters are programmed on timers to shade furnishings from damaging sunlight. New Expectations Besides “nesters,” there are “roosters.” Bayard Auchincloss, Realtor for Tucson Realty & Trust, says people with ample resources who move from markets where prices are higher have higher expectations. He knows of several “ultra luxury” homes of 6,000 to more than 10,000 square feet either under construction or on the drawing boards. These homes will be used part time, anywhere from one to nine months a year. This means locations in gated communities. Newcomers, he says, want homes with character, usually something that says “desert southwest.” Views are very important, but of equal or greater importance is the functionality, preferably designed on the “split bedroom plan” that easily accommodates guests. The attraction of this climate and outdoor lifestyle means that finished patios and garden spaces are priorities. Bedrooms have their own sitting areas, libraries and spa tubs overlooking nature. One newcomer to Tucson was so enchanted with his personal mountain slope that he had the exterior wall beside a shower removed and clear glass put in, though it cost thousands extra. Haute décor Interior designers are important aides-de-camp to people building homes. They know where to get whatever people want. Decisions are made long in advance of the ground breaking, because high-end furnishings have to be ordered. The fun often begins in the kitchen. “People want kitchens that look good although very few are true cooks,” says Janell Jellison, Long Realty. Home theaters are not as important to her clients buying homes in the $600,000 to $2 million range as are granite countertops. They want nice entertainment spaces. Betsy Brittenham, a transported New Yorker who works with many of Jellsion’s clients, says double dishwashers and lots of counter space are in demand. Kiva fireplaces, European faucets and fixtures, and special water features are popular. “These are not necessarily showy items, but things to make their lives more relaxed,” she says, adding that the friendly comforts of a resort are desired over “fussy English.” The clients she sees often are making new starts. They might have other houses and sophisticated tastes, but they want to simplify their lives. Brittenham describes “Tucson style” as one-third Taos, one-third modern, and one-third Spanish or Mexican. New arrivals may already be completely in sync with their new environment. Some will have started collections of Southwestern art years before. If not, designers will take them gallery hopping, or shepherd small groups on buying trips to such special places as Alamos, Son., a National Historic Monument and a prime source of Spanish Colonial furnishings. Grandparently people ask their designers to help them childproof their new homes with scrubbable fabrics and safety-edged cabinets, and to find tables and chairs made just for the little folks who visit. Brittenham has even selected charming containers for crayons. A Ventana couple has had rooms on the main house furnished for their young granddaughters, while a guesthouse on the back 40 was outfitted for the parents. Moving and meaning Miriam Bell, who is a Realtor at Coldwell Banker and also an art historian, explains the ultra-furnishings phenomenon as both symptom and result: People are tired of transient living. The computer has freed many workers from the physical workplace. Confident professionals no longer feel married to their employers. They are seeking a sense of domestic permanence and can afford the comforts of a really nice home. As long as these conditions prevail, there will be a market for both conveniences and luxuries. One of the new details seen more and more in hillside homes is the dumbwaiter, a 19th-century contraption. Originally, a platform between the walls delivered prepared food from the basement kitchen to the upper stories by a pulley system. The new ones lift groceries to the kitchen about from the entry-level garage. Electronics have captured the imaginations of all ages. Merely “smart” houses are quickly out of date. Today, builders are preparing ahead of time for home networks, coaxial cables and all that will come, says Janice Donald, chief executive officer of Eren Design & Construction, Inc. The company’s chairman and founder, Eric Schneider, spends a lot of time deliberately reading “outside the trade.” He sees what Nordstrom, UPS and other leading companies are up to. “We’ve got to support their personal services, like ordering over the Internet,” he says. “We will be building secure, refrigerated delivery areas.” “Oh dear, we have a problem,” says Bell with a chuckle. “How can anyone deliver to homes that are behind gates behind gates behind gates?” She had just seen Pima Canyon, where 300 homes will be built up against the mountain, some on lots that, all by themselves, cost a million dollars. Such developments are not even marketed in Tucson but to select clients in cities such as New York and Chicago. Glossy brochures are sent to exclusive lists of couples who might not yet have their Southwestern homes. Tucson is a draw, but these are people neither earning nor spending money here. This raises a question: Can we ever hope to make these incredible “escape houses” part of the larger community? Furthermore: What happens to dream houses when they do not hold any personal meaning for the heirs? It is not unusual for million-dollar properties in Tucson to languish on the market for two years, says Bell, even though they carry all the privileges of a rarefied country club atmosphere. They may be “Bargains” as national standards of affluence go – that’s why their owners can still afford to travel – but they still are unique monuments designed precisely to the tastes of their creators. - By Karen Dahood, the Tucson Citizen’s Foothills today, 2000-2001 issue After 18 years of awards and accolades, Eren Design and Construction is due for a change. This nationally recognized firm, specializing in residential remodeling and new home construction, is now under the guidance of new leadership, as Janice Donald takes over as president and CEO. Recently announcing his early retirement, Eric Schneider needed to find a successor to lead his company, which he and his wife Ellen founded in 1983. For that purpose he chose Donald, who already held plenty of experience as a business owner with her company A Tax and Accounting Solution, which she left for the position at Eren. “I had the accounting business 23 years and I have been working with Eren Design for about eight years,” explained Donald. “I have a affinity for construction, that you can actually be involved in something that transforms and lives after. You actually bring joy to people’s lives by fulfilling their dreams, and I was really attracted to being a part of that.” The move comes at the right time for Donald, who was looking for such a challenge. “I had mastered all there was for me to master in my accounting practice, and I was really ready to take myself to another level,” she said. “For about the last five years I’ve been really studying business management, different ideologies and methodologies, and I actually was able to put that in practice with Eren because Eren had a management team that I could take part of.” Now Donald takes on the role of team leader for a company, which employs 16 people and annually posts multimillion-dollar revenues. “I view it as an opportunity, because Eren has an extraordinary reputation,” said Donald. “It’s a grand opportunity for me to continue on and expand our lines of business and our share of the market… What Eren brought to the table already inherent were standards… What I bring is a business background that someone in design might not have.” The move in leadership is viewed by the company’s founder as a chance to “take it to the next level.” “The next level is for us internally,” said Eric Schneider. “For this to be a company that runs by itself, which is a goal of mine, the next level is the empowerment and development of people to run the company… so Janice and her team run Eren Design with standards that are consistent with the Eren that has been developed as a company that has won national awards, and that it’s here for 50, 60, 70 years.” “The next level for us is to have Eren be such a strong entity that its standard of service provided to clients is independent of any one person,” Schneider continued. “We’re going from a classic small business, heavily dependant on the entrepreneurialship of the principal to the company being outstanding as a group, as a team, so that whoever the next president is after Janice, they just pick up the ball and keep on going. That’s what we mean by the next level… The next level is all of the transparent, invisible, behind-the-scenes things that keep a company progressive and growing --that translate into outstanding service.” In order for Eren to reach that next level, Donald plans to increasingly empower others to make decisions. She also would like to include “plenty of system instructions, lots of documentation. We have these marvelous standards by which we build, let’s document them. There’s actually marvelous standards by which we work with people, let’s document them.” She also plans “to be personally in touch with each and every one of our clients; to have them be comfortable with the change; to give the staff a clear vision of the future; to continue to expand our capacities; and I think overall to develop trust.” Eren will also be branching out into new lines of work. “We’ve been doing home services for our clients for years, which is a relatively small task.” said Donald. “Now we’re going to let people know we’re going to do that beyond our client base. We’re actually looking into doing commercial work, too. We hadn’t done that before.” Despite all the efforts ahead for Donald, the biggest challenge will simply be filling Schneider’s shoes. “We’re certainly being classic in a number of ways, “ says Schneider. “We’re a company that has done well and grown from certain strengths; a great deal of that is what I personally brought to the table.” “The way Eren Design has operated, it’s been a lot about Eric Schneider,” said Donald. “He was thought of by most as synonymous with Eren Design.” “I’ve graduated to chairman of the board,” said Schneider. “We’ve expanded our board so that it has more depth and substance and resources available to Janice as president of the company and available to Eren for guidance and networking.” “I have access to him 24/7,” said Donald. “At the same time, he practices no interference… However, people should know that all he put in remains. All of the goodness he put in, all of the standards that he kept remain.” - by Kyle Schliesman, Inside Tucson Business, October 30, 2000, Volume 10 No. 31 Janice Donald has been named president and CEO of Eren Design & Construction. Donald previously owned the accounting firm, A Tax and Accounting Solution, and served as Eren’s accountant and payroll provider for five years. Eric Schneider, co-founder of Eren, is taking an early retirement and will continue with the company as chairman of the board. - Inside Tucson Business, CLASSIFIEDS, October 16, 2000 Janice Donald has been named president and CEO of Eren Design and Construction, Inc. Donald is the former owner of A Tax and Accounting Solution. Eren Design, a building and remodeling firm, was founded in 1983 by Ellen and Eric Schneider and now has 16 employees. Eric Schneider remains as chairman of the board. - Moving Up The changing face of Tucson business, Arizona Daily Star, November 2000 At Eren Design and Construction in Tucson, Arizona, president Eric Schneider doesn’t tell his employees how to do their jobs. He provides guidelines and then lets each employee do his or her job the best way possible. “They can expand the scope of work they’re willing to do,” he says. “They have a project manager to help with an area they’re weak in.” The end result is that customer satisfaction is never compromised, always exceeded. Schneider’s employee performance system is recognized by the NAHB Research Center as a quality benchmark and contributed to the company’s winning a National Remodeling Quality Award. Selective hiring. Schneider advertises in a local newspaper and collects resumes, juts like everyone else does, for new employees. But before any prospect meets with him, he must first interview with an outside consultant Schneider retains part time and then with the production manager. “out of 20 resumes, we may take only one candidate.” he says. Experienced employees. The average age of Schneider’s employees is between 40 and 50, and they stay with the company for an average of five years. “I have a very experienced caliber of employee,” he says. “In both skills and management, they can do everything. I build on strengths. They can all run their own projects, from billing and collecting fees to issuing change orders. There are general guidelines to follow, but they run jobs as if it were their own projects.” He adds that half his employees have owned their own companies and “all are capable of running their own companies.” Review and reward. Staff production and management meetings are a regular occurrence. Employees receive feedback, corrections and evaluations. He tracks profitability, length of time on a project and callbacks. Employees work one-on-one with the outside consultant to learn how to better work with clients and improve listening skills. For all their hard work, he says, they are rewarded. “It sounds like I ask a lot of them, but I give them a lot: a pension fund; trucks; uniforms; two weeks paid vacation; paid holidays; paid days off from Christmas to New Year; one paid, mental health day off a month; 100 percent insurance paid. We give them benefits so they want to stay with us. Remodeling therapy. Schneider’s consultant holds a Ph.D. in conflict resolution and is available for the clients, in addition to being available to employees. “If the client can’t talk to the project manager or the site manager very easily, the client can go to the consultant,” he says. ‘Remodeling therapy’ has turned out to be a great project saver for Schneider. Schneider has good reasons to invest a great deal of time and effort in personnel development. “It’s driven by the fact that I want a company that can run itself,” he says. And the clients benefit too. “They get a superb job. They get a remodeling experience that’s the opposite of horror stories. We get glowing recommendations. We’re the best at what we do,” Schneider says. “You have to be the best to work for us. There’s a lot of pride in working for a company like us.” – Great Practices, Professional Remodeler magazine, July/August 1998 The remodeling industry boasts a lot of great companies, firms whose management practices would earn respect in any industry. But what does it take to break out of the pack and climb to the very top their of the industry? Each year, the National Remodeling Quality Award seeks to answer that question. Sponsored by the National Association of Home Builders’ Research Center and REMODELING magazine, the Quality Award program takes a hard look at some of the best-run remodeling companies in the country and spotlights those whose practices stand as models for the industry. This year’s winners are Eren Design & Construction, Tucson, AZ and Coventry Construction, Slingerlands, NY. Three other companies earned “Commitment to Quality” honorable mentions: Mitchell Best & Goldsborough, Inc., Rockville, MD; William Asdal & Company Builders, Chester, NJ; and Fairway Construction, Southfield, MI. The Quality Award program is based on the Commerce Department’s Malcolm Baldrige Quality Award, presented annually to the nation’s best-run companies. Each entrant submitted an exhaustive written application to a panel of industry quality experts, which judged the companies’ management practices. Finalists were then subjected to a daylong site visit to confirm the judges’ findings. The 1997 Quality Award judges were Tom Irmiter, Irmiter Construction, St. Paul, MN; REMODELING columnist Walt Stoeppelwerth, HomeTech Information Systems, Bethesda, MD; John Norville, a retired quality management expert from Millersville, MD; and the 1996 Quality Award winner Robert Criner, Criner Construction Co., Yorktown, VA. And what do Quality Award judges look for? Well, tight miter joints don’t hurt, but a first-rate product is only part of what this award is about. “This is not a beauty contest by any means.” says Irmiter. “We want to see the beauty of the process.” For the winners, that process begins with a work force energized by a common vision and a company culture whose focus is locked into customer satisfaction. Through consistent measurement of company performance and planning for improvement, both companies raise the quality standard higher each year. Coventry Construction and Eren Design & Construction are relatively modest in size, but, as their profiles on the following pages show, their practices can benefit companies of any scale. More striking, these two companies employ quality management principles in the pursuit of very different aims, demonstrating that no matter what your goal in business, quality management-using information to improve performance-is the most direct path to get there. Eric Schneider wants his company to run without him. It’s not that he doesn’t enjoy the “client dance” as he calls it. He loves it. And it’s not that he doesn’t do it well. Customers, employees and subs all agree that Schneider rarely misses a step. It’s just that the 49-year-old contractor takes the long view. Schneider knows he’ll want out one day. And to do that, he’ll have to do more than make Eren Design & Construction the best remodeling company in Tucson. He’ll have to create a salable commodity-a company that can stand on its own. “I can’t be the only pivot point,” Schneider says. “The company has to be able to operate without me.” Along the way, Eric Schneider has managed to build a fast-growing design-build firm worthy of a 1997 National Remodeling Quality Award. The company’s 1996 sales volume hovered close to the million-dollar mark, placing Schneider at the top end of the contest’s small-volume-remodeler category. But he’s determined to grow—and grow smart. Eren Design finished out its 1997 fiscal year in June with $1.7 million in total revenues. This year’s judges unanimously agreed that Schneider’s customer centered management style –not to mention his careful approach to growth and his forward-looking plan for the future –earn Eren Design & Construction a coveted spot in the prestigious Quality Award program. PROCESS TIME For the past three years, Schneider has turned his attention to what consultants call “process design.” Jargon aside, the ultimate goal could not be more straightforward: to empower each ember of his six-person team to handle the day-to-day decisions that come up on the job. A detailed policy manual now spells out everything from lunch breaks to lock boxes. Job descriptions clearly define employee roles and management expectations. Posted job-site rules leave little room for interruption (hospital booties are required during the finish stage.) A four-step interview process screens job applicants for technical as well as people skills. Homeowner conversations are documented. Existing conditions are noted-and approved with the client’s signature-before the start of every job. Detailed specification sheets list all products down to the model number and finish. On-site supervisors keep daily logs of their progress. Project checklists track every job from he pre-construction conference to the canal itemized cost report. “We write everything down.” Schneider says. And he’s not exaggerating. Naysayers might wonder whether all these processes amount to anything more than administrative smoke and mirrors. But Schneider would argue that the careful documentation goes far beyond paperwork. “Customer satisfaction has got to drive the process,” Schneider says. “All these forms and procedures are simply designed to eliminate surprises and reduce the chances of an unhappy customer.” HOME ADVANTAGE Schneider’s management philosophy comes down to personal style as much as good business sense. He set out to create a system that would allow him to do what he does best –sales and design. What’s more, he needed a plan that would enable him to cater to clients without sacrificing time with his family. “I wouldn’t know how to do it any other way,” he says. “It’s a quality-of-life issue.” A big part of that plan involves working from home, where he’s able to get an early start on his day but still be around for breakfast when his wife and two children wake up. He operates out of a small yet fully equipped office off the family room. But for a good part of the day, he’s on the move in his Chrysler Sebring convertible –juggling his two-way radio, cell phone and pager- as he makes his way from one appointment to another. Ever since he and his wife, Ellen, started the company 12 years ago, they’ve made a concerted effort to maintain a home base. Though he acknowledges it might be necessary one day, Schneider seems uncomfortable with the notion of setting up shop in the traditional sense. Instead, he has looked outside for help in managing the company’s growth. In 1994, about the time Ellen stepped back to start her own consulting company, Schneider decided to turn the business up a notch. He wanted Eren Design to take on more and bigger jobs. To handle the added volume, Schneider decided to outsource all accounting and administrative functions. He also enlisted a marketing strategist to come up with a testimonial advertising campaign. And he turned to Diane Katz, a consultant with a Ph.D. in conflict resolution, to scrutinize employee and customer communications. STAFF APPRECIATION When she puts on her human resources hat, Katz serves as staff coach. (Not that the Eren team is green; the average age on staff is about 40.) She meets with the operations manager weekly to discuss such issues as efficiency, supervision style, and effective communication. She checks in with other employees and subs at the job site every other week. She even shadows Schneider. But her focus is always the same: teamwork. That collaborative message comes through load and clear in Eren Design’s “covenants.” The list of 20 value statements, which Katz helped Schneider develop, goes a long way toward creating the company culture. Employees are encouraged, for example, to “ask questions instead of blaming”, “appreciate individual differences” and “check for understanding” in their day-to-day work. And it’s not just lip service. The covenants –listed prominently in the policy manual-are referred to frequently at staff meetings. They’re practiced at site inspections and explained during interviews with prospective employees. Performance evaluations also measure how well team members demonstrate these values in their work with each other, with subcontractors and suppliers, and especially with clients. “I realized the need to address the soft side of personnel but was too busy to give it the attention it needed,” Schneider says. “Diane is much better in that role, and she frees me up to make better use of my time.” Katz’s guidance has helped Eren Design build a cohesive, self-motivated team. Regular staff meetings now provide ample time for problem solving. Employees have a better understanding of their individual and team responsibilities. Communication with subcontractors has improved. Supplies are ordered more efficiently. Costs due to errors are down. And morale is up. Teamwork pays off for Schneider’s employees in another way –literally. A year and a half ago, the company started handing out quarterly bonuses. The staff reward system –which is based on profitability-makes clear the direct and individual impact each team member can have on the company’s bottom line. The team mentality even factors into the salary scale at Eren Design. Schneider admits that he doesn’t pay as much as some of his competitors. But he hopes holding salaries in the mid-range will encourage his employees to focus on team performance and company profitability. Besides, he says, the company more than makes up for any salary disparity with its benefits package. Schneider just introduced an employee pension plan this year. Full-time staff members get a one-week or two-week paid vacation –depending on their years with the company –in addition to seven paid holidays. Eren Design picks up half the premium tab for health insurance. And everyone gets one mental health day every month –no questions asked –to avoid burnout. THERAPY SESSION Eren Design has always given top priority to customer service. Indeed, Schneider’s clients –most of whom are affluent homeowners with exacting standards –wouldn’t have it any other way. But when one customer saved up a long list of gripes until the end of a project, Schneider worried that the existing communication system had failed him. Despite daily progress reports, written change orders, and countless invitations to voice concerns, the customer had smiled and remained silent. To avoid such communication breakdowns, Schneider tapped Katz (who works on retainer about five hours a week) to fine-tune the customer-feedback loop. One client has since dubbed her creative solution “remodeling therapy.” Three times during the course of the project –at the beginning, middle and end –Katz sits down with customers to size up their expectations. She asks everything from “How did you hear about Eren?” and “What made you nuts when people worked in your home in the past?” to “How did the project cost measure up to your expectations” and “Would you do it again?” Though not every customer takes advantage of the interview sessions, having the option lets clients know the kind of care and feeling they can expect from Eren Design. And those who do take Katz up on the offer, Schneider says, are more likely to discuss their fears and frustrations with an objective outsider than with him. Katz forwards time-sensitive client concerns to the appropriate team member for immediate attention. Other customer feedback –both good and bad –gets put on paper for the entire Eren Design team to review at the next staff meeting. Any negative comments become grist for continued improvements to the company’s operational procedures. And positive reviews provide plenty of opportunity to recognize exemplary performance. Having fine-tuned communications both inside and outside Eren Design, Schneider is well on his way to building a company that can run without him. But he knows there’s one essential step left –finding someone who can take the lead in the client dance. For now, though, Eric Schneider isn’t quite ready to let someone cut in. – by Wendy Ann Larson, REMODELING Magazine, October 1997 Tucson-based Eren Design & Construction is one of the best remodeling companies in the country – and it has an award to prove it. The mom-and-pop business this month won a National Remodeling Quality Award, patterned after the Malcolm Baldrige National Quality Award. For owner Eric Schneider, the award is a validation of the practices he’s put into place over the years. “To get to this point took a long time.” said Schneider, who started the business 15 years ago with his wife, Ellen. Schneider – who caters to high-end customers who mat have two or three residences – said he thought he was running his business well but had nothing with which to compare. “It’s nice to be gauged against standards.” he said. This year was the first the company applied for the award, which is sponsored by Remodeling magazine and the National Association of Home Builders’ Research Center. The only other winner of a Remodeling Quality Award this year was Coventry Construction, a one-man operation in Slingerlands, NY. The awards were presented during the 1997 Remodelers’ Show in Kansas City, MO earlier this month. “The process is not for the faint-hearted.” Schneider said. It took about 60 hours to complete the application, which included 100 pages of supporting information. Once Eren made the cut as a finalist, the award sponsors sent two people to Tucson to talk to employees, subcontractors, suppliers and clients to “make sure what you said you do is what you do.” “On one level, we don’t do anything different from any other good remodeling company,” Schneider said. But the degree to which Eren Design pays attention to details “adds up exponentially.” Schneider said. “We make quality a business advantage tool.” For the most part, clients aren’t living in heir homes when Eren is completing a project. Still, Eren’s crew cleans up the premises every day, and workers don’t smoke on the job, don’t put their food in the family’s refrigerator, don’t use a homeowner’s phone and don’t have radios blaring on the site. Schneider said his goal is for the company to eventually run itself, with “work generated, designed, estimated and produced without me” but something he’s proud to have bear his name. Eren Design is nearly there, he said. Eric and Ellen Schneider did everything themselves when starting out. Now, Eric concentrates on project design and selling, and leaves the demolition and reconstruction to a crew he carefully selects. Schneider said his dream job would be one where an owner says, “We’ve seen what you can do. This is what I want. Call us when you’re finished.” – by Sara Hammond, The Arizona Daily Star, October 1997 Ten years ago, with “joyful anticipation,” Ellen and Eric Schneider took $50 and opened their own business – Eren Design and Construction – a home remodeling firm. Having relocated from California where both had acquired over 10 years experience in early childhood education, they were “still hippies at heart,” according to Ellen, president of the small bit prosperous company. “We cut our hair, took off our paisleys, opened a business account and went out into the world.” That world of design was a new experience for her but was not unfamiliar to husband Eric, vice president of Eren Design and Construction. He had designed and built several playgrounds in Los Angeles after his 10 years of teaching pre-school. In fact, it was on one of the playgrounds he built that he and Ellen met and fell in love. Both teachers eventually “burned out” on their educational careers and decided it was time to make a change. In 1983, Ellen visited a friend in Tucson. “It was 105 degrees in the shade and I loved it. So we both quite our jobs and moved out here.” She says. The couple has been working out of their eastside home ever since. “We actually spent the first six months fixing other contractor’s mistakes.” Eric remembers. In addition, the team spent much of their energy marketing themselves and their fledgling company. Their efforts paid off and the bulk if their clients continue to come from word-of-mouth referrals. Ellen spends the majority of her time spreading the word about Eren Design and considers herself the social presence, the one who does all the networking. Eric considers himself the nuts and bolts person. He recalls how he started in the business. “I just stumbled into it. I learned on the spot in California and realized, ‘Hey, I’m good at this.’” He recognizes his powers of visualization and his ability to walk into a room, see “space” and remodel the room or house in his mind’s eye. While Ellen acknowledges that her husband possesses the technical design and construction acumen, she never denies the equally important position of a woman in this very male-dominated field. “My presence is good for the women of the house. We always meet with our clients as a couple and that is comforting for many women.” Ellen makes a point to spend time with her female clients during all meetings while very frequently Eric and the male clients wander off to discuss the technical elements of the remodel project. “I ask them things like, ‘Are you comfortable with this?’ ‘How do you feel about that?’ ‘Will this work well with your family?’ It’s really important to know that they are at ease and happy with the project at all stages.” The male/female partnership of Eren Design and Construction is not all that makes it unique. Much pride is invested in their philosophy that their firm will run an entire project from concept to finished product with a maximum of efficiency and comfort and a minimum of inconvenience. The Schneiders go to great lengths to keep their clients families comfortable. Remodeling projects are often dreaded simply because of the mess that is made and the inconveniences that can be created by contractors who don’t finish their jobs on schedule. Eren Design employees (of which there are eight) are also committed to a hassle-free, professional environment. They are not permitted to smoke on the job or listen to radios. They wear uniforms and clean up the construction area at the close of every workday. In addition, employees are sent to workshops and continuing education seminars to ensure their up-to-date knowledge. Eric believes that their top-notch staff is an undeniable part of their success and that it is easier to attract skilled craftsmen to an environment that is first-rate, professional and caring. “We really focus on caring and quality,” Ellen says. “we try to do extra things like order sandwiches for a mom with no kitchen or send a couple to the movies once in a while. We want our employees to be non-intrusive, do their job and leave. And if morale gets low, we help our clients get out of the house. We really believe that companies don’t succeed; people do.” Eren Design is run so efficiently, in fact, that several clients have handed over their house keys to the Schneider’s prior to the beginning of a major project, left town for its duration and returned to a finished product. They are proud of the trust that their customers have in their business. “We’re advocates for our clients. We have to be. They pay us to handle the problems.” says Eric. Eric reports that the company has been consistently profitable, growing a minimum of 20 percent each year and that 1995 was their most successful year. “We’ve found people are willing to spend more money now on remodeling than in the past. We also have been doing more high-end projects ($150,000 and up) than low-end ones. A $20,000 job is small for us but we do lots of them.” Three major types of remodeling projects are handled by the company. There are projects that require no design input from the Schneider’s but rather just the team’s labor efforts. Technical projects are also part of the business. They include changing doors, installing new windows, etc. The third and most intensive type is the design/build project. These require a design contract. The Schneider’s then show the client examples of their ideas through drawings, products and schematics. Once the client decides on a particular design, the project is started and completed as quickly and efficiently as possible. No work is ever begun until all supplies have been received sot here is no delay waiting for orders, a situation that can be a hassle for everyone, especially the customer. “You see, in this business, we are weaving a tapestry that affects everyone,” Eric adds. “We have very high expectations of ourselves and our employees and so do our clients.” “He’s right,” says Ellen. “It’s a partnership and we keep feeding it and enriching it and we’re very lucky that we have the skills to do that.” – by Katherine Furman-Berg, Tucson Lifestyle magazine, February 1996 Times change – and so do the tastes of homeowners. This Tucson, Arizona-based home hadn’t been updated since the 1970’s. It seems many of the neighboring homes were significantly remodeled or torn down and replaced, so the homeowners decided that it was time for them to follow suit. The original home was 2, 400 square feet of dark, claustrophobic rooms, a chopped up floor plan, no views and inadequate closet and storage space. The homeowners, armed with a list of certain requirements, consulted Tucson-based Eren Design & Construction for help. Specifically, they wanted a home that: SOLUTIONS The whole-house remodel gave the home character by rounding corners and creating thickened walls with asymmetrical niches to add a rich variety of detail. A special integral color wall finish that simulates the look of old plaster, the installation of vigas (southwestern-style beams made of peeled logs) and lattias (strips of wood laid over the vigas) as well as the use of hand-carved beams and corbels helped give the home a look of days gone by. Inside, the master bedroom was enlarged and modernized. Wasted outdoor entry space was enclosed for a guest powder room and a new entry into the home. Space from the little-used guest rooms were captured to widen the narrow hallway into a 6’ wide art gallery leading from the main entry to the great room. Installation of skylights and larger windows brought in much-needed light. – Third Place, Whole House Remodel category, Qualified Remodeler magazine, October 1996 Creating space for work and entertaining was the goal of this Tucson kitchen remodel. The homeowners, who both enjoy cooking, wanted a well-lit, open workspace. A redesigned floor plan blends existing space from a den with a small addition, allowing husband-and-wife remodelers Ellen and Eric Schneider to create a little “architectural magic” by opening up the existing 8-foot ceiling, says Eric. “The owners had a shape in mind for the new kitchen,” he says. “They wanted a sense of volume and liked vaulted ceilings, but also wanted to add some interesting details.” They include triangular-shaped windows and lights strung behind a soffit in the vault. Enlarged from 135 to 350 square feet, the kitchen has room for large dinner parties and enough space for two people to work. Extra storage was created by incorporating shelves on the doors of a triangular-shaped pantry. – MERIT AWARD, Kitchens category, Remodeled Homes magazine, Spring 1994 |
|
Home |
Company Profile |
Green Remodeling |
FAQ |
Gallery |
Testimonials |
Articles |
Awards |
Map |
Contact Us |
Join Our Team
Copyright © 2008 Eren Design & Construction, Inc. All rights reserved. |