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Today we bring you the one sector of the construction industry that is actually experiencing growth despite the economic turmoil. Listen in to find out more.
- NARI: National Association of the Remodeling Industry
- Morrison Remodeling
- Gary Morrison’s Blog
- Lead paint law resources (US)
Interview with Gary Morrison (Transcription)
Cesar: Hello, Garry. How are you?
Gary: Fine, Cesar. How are you?
Cesar: Good, good, good. How is the weather there in the East Coast?
Gary: It has been very good. The last few days have been beautiful.
Cesar: Are you anywhere near to where the hurricanes have stricken?
Cesar: Oh, OK.
Gary: Yes, it came right near us. I had some damage from it. As a matter of fact, one of the few around that had damage but I did have some.
Cesar: Everybody OK?
Gary: Everyone is fine. Yes, damaged but we’ll live.
Cesar: We had a tornado touchdown here and we’re nowhere near the East Coast and this never happens here. Just a couple of weeks ago in a town here called Goderich and just destroyed the place.
Cesar: It’s crazy, yes. We never have that here.
Gary: I’ll take a hurricane any day.
Gary: Yes, yes.
Cesar: Yes. It’s just a bad storm. A tornado is a different story.
Gary: Oh, I know. Yes.
Cesar: OK. So how about we talk about the remodeling industry?
Cesar: OK. So what kind of trends are you seeing in it? I decided to do this interview because it seems like the remodeling industry is one of the few sectors within the construction industry at large that is actually seeing some growth despite the economy. So what kind of trends do you see?
Gary: Well, I mean if I go back three, four years, we had pretty steady backlog of about three months worth of work. It was pretty consistent. I don’t do huge jobs but a good job for me is if I get a whole house remodeled, that’s wonderful but quite typically, it’s like a kitchen is a good job for me. I do lots of bathrooms and I found that when we were going through that economic downturn there over the last couple of years, there actually was one full year where I did not do a complete gut kitchen.
We kind of changed our approach to things and offering people kind of minor kitchen remodels, facelifts where we went and painted the cabinets, changed the countertops, new floor, do a tile backsplash, that sort of thing and it kind of really freshens the kitchen up. So we were doing a lot of those and in general, the jobs that we were getting in were smaller. We do smaller jobs anyhow so we’re kind of geared for that so it didn’t like horribly impact us. I would say at one point during that economic downturn, I might have gotten to a month and a half’s backlog and that was the worst. I’ll tell you, about a year ago, all of a sudden it just really picked up on me and I’ll tell you I had four and five months backlog.
Gary: Which is better than I had even before the downturn and it has been going that way all year for me until about three weeks ago or four weeks ago on that federal bond rating that downgraded from a triple A to a double A plus.
Cesar: Oh, yes.
Gary: All of a sudden I lost two jobs which might not sound like much but those two jobs were three months worth of work. The reason I lost them is one of them, the gentleman was going for a loan at the bank and everything was fine. We agreed on price, the contract. He had seen it. It was fine. He was on board, ready to go. He had a verbal from the bank that he was going to get a certain amount of money. They said they saw no problem with it and then that downgrade happened.
In about four, five days later, he went in and they told him that they were nervous about the economic future and they valued his house lower and he didn’t get the loan he wanted. Of course that all trickled down to me so I didn’t get the job. He has still got to do some work but instead of a $125,000 job, it’s now going to be maybe a $10,000 job. I had another job with a customer who just felt nervous about the stock market and the economy. They said they still wanted me to do the work but they wanted to wait a little bit.
So in the course of about two days, I lost about three months worth of work. I still had more backlog but I wasn’t planning on doing it right away so I was kind of scrambling trying to get that work with permitting and Historic Commission approvals and things like that. The last few weeks have been tough for me and I think I’m over the worst of it now. I’m probably back to two months backlog but it has just been a scramble getting there.
Cesar: Do you think this is across the industry?
Gary: I think it’s kind of spotty because I talked to a lot of other contractors and some of them even over the past year have been very busy and others not so busy. I count myself one of the lucky ones because we’ve been so busy but I know there are some that aren’t. It’s kind of spotty and I can’t always describe why. I mean some of the people that tell me they aren’t busy, I’ve seen their work and I think they’re good contractors so I don’t know. Maybe it’s a marketing thing. I don’t really know but to me, it has definitely come back from where it was although I think we have a little hiccup right now; but again, I’ve got a pretty good backlog going again. It’s similar for other contractors as well that I’ve talked to.
Cesar: OK. So maybe this downgrade from the triple A is – we’re still to see what the final impact is going to be overall. It’s pretty recent. It could be something temporary. It could be more long-lasting, I guess.
Gary: Right. I’ll tell you, I’m getting plenty of calls, doing plenty of estimates which were typical for this time of the year for me.
Gary: Now spring and fall are pretty busy.
Cesar: I see.
Cesar: OK. Now, you’re also involved with NARI.
Gary: Yes, I am.
Cesar: Which stands for?
Gary: National Association of the Remodeling Industry.
Cesar: OK. Can you tell us a little bit about NARI and about your involvement with it? What is the benefit you see to your own business?
Gary: OK. You will probably have to tell me to stop because I feel very strongly about NARI.
Cesar: No, that’s exactly why I wanted to talk to you.
Cesar: So just tell us all about it.
Gary: Yes. National Association of the Remodeling Industry, there are chapters all over the country. I’m sorry, I don’t know if there’s any in Canada or any equivalents but in the United States, they have them all over the country. Not every state has them.
My involvement in it started about – I’m going to take a guess. Maybe about six years ago or seven years ago. I went there. My purpose for going was I heard that they gave certifications. So someone could go in there and join NARI and go to the certification classes and become a certified remodeler designation or designation of certified kitchen and bath remodeler. They have several and that was the reason I went. So I walked in, didn’t know anybody and just kind of started talking to people about it and I joined. They have monthly meetings that consist of a sit-down dinner and the speaker and some networking and that sort of thing.
So I’ve been going at this for six or seven years. I volunteered to join the committee and they put me on the membership committee. From there, somebody asked me if I would like to be a vice president. So I ended up moving into that position and it’s kind of a five-year commitment because you start out as the third vice president, the next year second vice president, then vice president, then president then chairman of the board.
I am currently the President of the Eastern Massachusetts Chapter of NARI. Other reasons people go there are for networking. I’ll tell you, I met a number of people that have helped my business tremendously.
Cesar: That’s good.
Gary: I met my business coach there. I still have a business coach. I met him there and he has dramatically improved my business. I have a degree in management and a strong financial background as well as construction background. I knew a lot of the things I should be doing but I wasn’t necessarily doing them and with a coach, it just kind of forces the issue. It holds me accountable. I met my lawyer there and I met many contractors and we share stories and help each other. It has been very beneficial to my business.
Gary: Other people joined because they want education and there’s plenty of education to go around then. We have speakers every month. We have classes you can go to. I went and became a certified remodeler. There are other certification classes I could go to. Most of my employees are certified leap carpenters because I sent them to that program. I have one more to go. I’ll probably do him next year and which helps me from a marketing perspective. It shows that we’re a professional organization. My people are certified. I’m certified. We all got certifications for lead paint. Now we’re certified lead paint remodelers so we can work at homes that were built prior to 1978.
Cesar: I see. How does the certification process work? Do you take classes and then write an exam or do you need to prove experience, your experience records? How does that work?
Gary: Yes. You have to have a certain amount of experience. I don’t recall what that is now and then there are classes you go to and it’s part-time. If I recall correctly, it was about nine weeks. You would meet with your study group for a couple of hours each week. Mine was like every Tuesday morning from 7:00 to 9:00 AM and we would meet as a study group and go over certain material. We would have homework assignments. We would work on those in preparation for the following week and ultimately in preparation for the exam. At the end of nine weeks, you sit for an exam and it’s not an easy exam. I mean not everybody passes and in order to keep my certified remodeler designation, I have to do continuing Ed. unit classes every year.
Cesar: I see.
Gary: So do my certified lead carpenters, which is good because it keeps us all educated.
Cesar: OK. Sounds like a great opportunity to network and to learn about the latest technology even in the remodeling industry and help each other out.
Gary: Oh, it is great.
Gary: We kind of strive for professionalism and ethics.
Cesar: Perfect. Now, do you see a demand for NARI-recognized professionals when bidding for work or at least a growing trend?
Gary: Well, nobody ever comes to me and says, “Are any of your people certified?” I find that not enough homeowners know enough about NARI to do that.
Cesar: I see.
Gary: But I kind of turn that around because when I go in, on my business card, it says “certified remodeler” and I try to mention to everyone I go to do an estimate that I’m a certified remodeler. My guys are certified lead carpenters and with this and with that and with the other thing. I try to stress that to differentiate our company from others.
Cesar: I see.
Gary: So we’re just not a few guys with pick-up trucks and tools.
Cesar: Very good. Now, that’s a good segue to talk about your business in particular which is Morrison Remodeling and Repairs. When did you start it?
Gary: Ten years ago in kind of a strange way. I am 61 years old and I worked for a company for 30 years and retired before I started this business and it was in an unrelated industry. I had a strong carpentry background. Anyhow, I worked as a carpenter when I went to college, remodeled several of my own homes and kind of grew up going to woodworking classes and that sort of thing. So I had a substantial construction background. I started it 10 years ago alone. I was the only one so I did all the office work, all the sales, all the marketing, all the carpentry, all the ordering, estimating. I did everything and it has of course evolved over the years. It will be 10 years old in October.
Gary: Another couple of weeks and it will be birthday time. I now have three fulltime carpenters in the field and my wife is an interior designer. She does the design work for the company.
Cesar: That’s perfect.
Gary: She also handles a lot of the office work. That by the way is a second career for her as well.
Gary: She retired after, I think, 26 years, went back and got a second bachelor’s degree; this one in interior design.
Cesar: OK. Interesting. So you both left unrelated fields to start the new company.
Gary: That’s right.
Cesar: You started right away remodeling, right?
Cesar: Now, what do you think are the main differences and challenges between remodeling and new builds?
Gary: That’s an interesting question. I’ll tell you, one of the struggles I have had is that on occasion when I go to do hiring – I actually had an occasion one time where I hired somebody that was a new home builder and he came to work for me as a remodeler. I’ll say he struggled. He and I both struggled. I mean not personally but I mean just he was accustomed to going in and just working. I think the biggest difference is one of cleanliness within the house. In other words, if I was going to go work on a house that nobody lived in, I wouldn’t be worried about sawdust on the floor.
Gary: With remodeling, everything is different in that I have to be careful of dust, sawdust, dirt and debris of any sort because 99 percent of the time when I’m working on a home, it’s a home that someone is living in. Yes, there are times when I can close off a kitchen and we can kind of treat that as a bit of a work area but it’s still within the home and we have to be careful especially now with the whole lead paint issue. That gentleman that worked for me struggled and ended up leaving and it was by mutual agreement. He was just struggling very much with the whole keeping everything clean all the time.
Gary: Housekeeping, yes.
Cesar: Literally in this case.
Gary: I’m kind of the stickler part because I’ll walk in when the guys are working. I don’t do it on purpose. It’s just the way it is. I walk in and I say, “Hey, that door isn’t zipped shut. There’s a gap over there. Watch that. Don’t be standing there. You got to stand on something.” I’m really on them all the time because you can’t be standing on a finished floor and grinding plaster dust and do it with your boots.
Gary: He has got to have protection down. Everything is about protection and it’s almost a fulltime job.
Cesar: OK. Would you agree that maybe the number of unknowns you encountered in the renovation project is larger than a new build? You never know what’s behind that wall.
Gary: You never know what’s behind the wall. Nothing is ever square. Nothing is ever plumb. Nothing is ever level.
Gary: It’s always compromise to get that happy medium and make sure everything is level and plumb and square. When you’re building a new house, you start out level, plumb, square and you just keep everything level, plumb and square and it’s easier. It gets infinitely more complicated in a remodel.
Cesar: Yes, that’s true.
Gary: I’ll tell you, I started out remodeling and I do it within the footprint. I started out that way. Although now, I will do additions or dormers but it’s just the way the company has evolved. I don’t do many of them. I advertise that I’ll do additions and dormers but I really don’t get a lot of them. Almost everything we do is within the footprint.
Cesar: OK. What’s the advantage of that in your opinion?
Gary: There really isn’t one. It’s just the way my company has evolved. In fact, it would be a benefit if we did more additions, right? It would be more work.
Cesar: Now, in our company here, we deal mostly with commercial and industrial sites; but even the companies that we’ve dealt with in the residential side of the business, companies that do new builds, they usually don’t want to touch the renovation projects. Why do you think that is and what are some of the common pitfalls associated with entering the remodeling industry when you start from a new build perspective?
Gary: You mean if you’re starting a new remodeling company?
Cesar: Yes, and you’re just used to new builds. I guess it goes back to the other question that I asked.
Gary: It does. To me, it’s a whole different mindset. When I was in college and even for a while there, I worked for a carpenter and we were doing new construction and again, I really didn’t – sawhorses in the living room and nobody was around. So yes, it does kind of get back to that whole mindset of cleanliness. I’ll tell you that the new lead paint laws lend themselves very well to it.
A lot of people are struggling with the new lead paint laws and trying to conform to it. I’ll tell you, we were not doing it exactly the way they require it to be done now but we were darn close. I didn’t like the idea of dust going into the rest of the house so we always seal things off. So it isn’t a huge departure from what we used to do. I think we’re somewhat benefited by the way we used to do it and with this new Lead Paint Law.
Gary: New construction doesn’t have to deal with that.
Cesar: Right. That’s true. The Lead Paint Law, is this a state law or is this something federal?
Gary: It’s a federal law that went into effect April 22nd of 2010.
Gary: The EPA, Environmental Protection Agency, is the one that is enforcing it in most states. It just so happens that I live in Massachusetts. The state of Massachusetts, the Massachusetts Department of Occupational Safety took it over. So the EPA really doesn’t enforce it in this state. It’s a state agency.
Gary: Because I’m in NARI, I know a lot of those folks and have been working with them to help them improve the law and they have been wonderful.
Cesar: So what I’ll do then after we’re done here, I’m going to add to the show notes a link to more information on the Lead Paint Law. For the listeners, you can go to ConstructionIndustryPodcast.com, episode 005 and you will find the link there. I can talk to you about that later. You can point me in the right direction.
Cesar: OK. All right. Looking back now, 10 years that you’ve been with your own business, what do you know now that you wish you knew then? I put you on the spot here.
Gary: Well, I would learn things all the time. I don’t know. It’s funny. When I started out, I went to the Small Business Administration. They gave me a free copy of QuickBooks accounting software. So I started learning that and doing that. So I made some bad mistakes from an accounting perspective and I’m a guy that had a good strong financial background and I just wasn’t familiar enough with the terminology within QuickBooks and I made a couple of mistakes bookkeeping-wise. I straightened them out. I think maybe if I had to do it over again, yes maybe I would get QuickBooks but I think I would go and visit a bookkeeper or a QuickBooks specialist. I probably should have let them do it right from the beginning and I should have focused more on the other parts of my business but it is what it is. I did what I did. When I started getting employees, I did my own payroll and I did my own taxes. It was not easy learning how to do that and I made occasional mistakes and I get charged accordingly of course.
Gary: So that’s another thing. I probably would have been better off just going to a payroll company and letting them do it.
Cesar: I see.
Gary: There are a few things that I would have done those things differently. The good part about what I did is that I know it inside out, inside and out. I know QuickBooks very well. I know the payroll and that end of it very well. Now my wife knows it much better because she took it over from me but I think it would have saved a lot of anguish all around if I had sought professionals to do some of the things that I did myself.
Cesar: Yes. One thing that I believe in is that I think we should always learn how to do it by trying it ourselves and then as soon as we kind of know what it is that we’re outsourcing, then we try to outsource this. So we can focus on, in your case, remodeling, right?
Gary: Right, right.
Cesar: We use QuickBooks here too and it was a learning curve as well.
Cesar: Now, if you could give some advice to people looking to enter the remodeling industry, what would you say?
Gary: Make sure you enjoy it because you’re going to spend a lot of hours at it and I’ll tell you, when I first started the business, it was easily 80, 90 hours a week. Of course a lot of it was probably spent on QuickBooks and other things that I didn’t need to do; but seriously, it takes a lot of time and you really need to be committed to it.
I still put in a lot of hours. My wife and I probably put in 60 or 70 hours a week. It’s like constant and you have to enjoy it. I do. I enjoy it very much. I’ve had better-paying jobs but I really enjoy the work. So, you really need to be committed to it. You need to like it. You need to love it and not be afraid to put the time into it because it does take a lot of time. I would love nothing better at 61 to start working 20 or 30 hours a week but I can’t do it. I can’t.
Cesar: But it’s work you enjoy doing.
Gary: Oh, it is. It is.
Cesar: That makes all the difference. I agree. It’s my philosophy too is to find something you wouldn’t mind doing for free and then do that really well.
Cesar: Eventually, people will recognize that. Naturally you’re going to be really good at it because you enjoy it so much.
Gary: The other thing that I would say is, for a short period right after I retired, I went to work for a carpenter. He didn’t have a license but he would go out and do these jobs and I was working for him. I was working out back at the house one day and he came running around all upset and I said, “What’s the matter?” He said, “The building inspector just went by.” I said, “Oh, is that a problem?” He said, “Yes, I don’t have a permit.” I thought to myself I don’t ever want to do that.
So my advice to somebody going into the remodeling industry would be to do it right. If you’re going to do it, do it right, do it legally. I did right from the beginning. I get the licenses I needed to get and I pull permits where I need to pull them. I don’t do jobs on the side. I don’t do jobs for cash. I don’t pay employees under the table. I do everything legally and I do it right.
I just think it’s so much better that way. If I get a callback on a job for something that was a deficiency, I fix it. It costs me money, yes. Does it cost me time? Yes. But your reputation is very important. We have a very good reputation and there’s a reason for that and that’s because we weren’t looking to take shortcuts and the first job I go to was a callback. I’m like right on it.
Gary: If I get a callback, I’m back there if I can and it’s just important to be honest. There’s a lot of dishonesty in the industry supposedly and I think it’s refreshing to have somebody that’s honest, works hard at it and does all the right things.
Cesar: That’s right. I couldn’t agree more.
Cesar: Now if the listeners want to learn more about Morrison Remodeling and NARI, where should they go?
Gary: OK. Couple of websites. The NARI website, I’m not going to point you to the Eastern Mass. website. I’m going to point you to the national one. From there, you can get to the Eastern Mass. or the Wyoming one or wherever you want to go. It’s www.NARI.org.
Gary: From there, you can get anywhere.
Cesar: OK. The link to your company?
Gary: Yes. It’s www.MorrisonRemodeling.com.
Cesar: Easy enough.
Gary: By the way, out there, I do have a blog and one of the entries in the blog is how to hire a contractor. So if there are any homeowners listening, go there and read how to hire a contractor. There’s a lot of good information there.
Cesar: Perfect. I’ll make sure I’ll add that to the show notes as well so people reading the show notes can click there and read your blog. OK. Well, Gary, thank you so much for your time.
Gary: You are welcome.
Cesar: It was great talking to you and learning about your company and your history. Maybe we can collaborate again in the future.
Gary: Great. Thank you. I appreciate the opportunity. Thank you, Cesar.
Cesar: All right. Bye-bye.
Gary: Bye. [/spoiler]