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Building a nest egg Featured

6:08am EDT November 23, 2005
Companies often have to adapt to survive, and Dave Fox, the founding father, chairman and recently retired CEO of Columbus-based Dave Fox Remodeling, did a 180 with his company 20 years ago that turned out to be a wise decision.

Fox founded his new-home building company in 1968 but by the mid-’80s, customers were demanding design-build remodeling.

“When (customers) have time off, they don’t want to be doing their own remodeling. They want to hire a professional who’ll do the work for them,” he says.

Dave Fox Remodeling took shape in 1985 and has since grown to 47 employees with between $6 million and $7 million in revenue.

Smart Business spoke with Fox about how he’s faced the challenges of growth in the remodeling industry.

Why did you change your company’s focus from building new homes to remodeling?
Back during the Carter years, most of the builders were getting killed when interest rates went to 21 percent. I diversified, started doing remodeling and commercial work and backed off of new house construction because nothing was selling.

I never really meant to quit building new houses, I just got so busy with remodeling that it just faded out of the picture, and eventually, I phased it out.

There was a need back then for design-build remodelers. The remodeling industry historically has been pretty fragmented. The average remodeler only does about $500,000 a year in business, and it’s usually a one-man band, somebody who is a good carpenter and decides to go into business for himself.

So the natural thing was to go into remodeling. There are quite a few guys doing design-build remodeling now but back when I started, there weren’t very many.

How has winning several contractor and business leadership awards helped fuel your company’s growth?
I’m not sure which came first, the chicken or the egg. We got the Integrity Award from the Better Business Bureau a few years ago, and that was the one that I’m probably the most proud of.

People want to deal with reputable people. They want to deal with people who have credentials. They want to be assured when they hire somebody to do a project that it’s going to get done right and according to their expectations. When you hire somebody who has a reputation for quality work, you’re a lot more confident that you’re going to get what you paid for.

We’re controlled a great deal by the people who work for us. You’ve got to have good people if you’re going to consistently turn out good work. If one of the guys messes up, guess who gets the phone call? I have to stand behind every person who works for me.

How does that affect your hiring practices?
You have to be very careful about who you hire, make sure you’re getting quality people. Generally we don’t have much turnover.

When we hire somebody, they’re happy to work for us, but it took years to build up the reputation where people could call us with confidence.

What has been your biggest growth challenge?
Cost-overruns are always a problem in remodeling. No matter how perceptive you are in analyzing a project, there’s always something that you run into because every remodeling project is different.

In our business, cost analysis is what separates the men from the boys. Ninety-three percent of the remodelers who go into the business, they’re back out again within three years on the average because they do not know how to make a profit.

They may be good carpenters, they may be good people, but you can’t stay in business if you aren’t making money, and that’s the challenge — to keep it profitable and still provide the service and quality they want.

How do you manage that?
You have to be careful about how you use your material and you can cut down on waste — not just waste materials but wasted time. You want people who work efficiently and get the job done in a timely fashion.

You have to have a sense of urgency about getting things done, and on the other hand, you don’t want to have rework. You have to do it not just efficiently and quickly but you have to do it well.

It’s a lot less expensive, even if it takes you a little bit longer.

HOW TO REACH: Dave Fox Remodeling, (614) 459-7211 or www.davefox.com