It’s no secret that many companies across every industry have been challenged by economic times over the past few years.  As you search for a company to help design and remodel  your home it’s more important than ever to have a real understanding of whom you are about to begin a relatively long relationship with.  Being conservative in your selection and not being blind to those overly aggressive companies with suspiciously low-cost estimates will get you off to a good start.  As a long-standing business owner here in Silicon Valley (since 1992) I’ve seen and been challenged by the ups and downs of the valley.  I recently spoke with a mentor of mine from the late ’80’s and he shed some light on this era and it became crystal clear to me that the instinctive steps I have taken over the past couple years has been exactly what I needed to do.  Here is what I have learned based on my experience, interactions with my customers and observations of competitors that have come and gone. Stick with companies with long track records.  Companies that have scaled their operations both up and down, survived the cyclical nature of our economy, without compromising the integrity of their service indicates a strong foundation and a safe harbor for homeowners to place their trust.  The reality is it’s easier to react to demand than to have the foresight required to maintain a sustainable company.  Strategically sizing your business in unison with the economic forces actually can uncover opportunities and new benefits resulting in a fresh new vibrant company.  Companies like ours have experienced just that, a “lean and mean” business backed with decades of experience and more than a thousand satisfied customers.  More so than ever it’s important to understand the OWNERS of the business you are about to hire and pay several thousands of dollars to.  Take ones personal experience with a grain a salt and weigh more on how long they have OWNED the business.  Ask to meet with the owner of the business and interview them for your self.  For example:  New business’s, combined with partnerships, where neither has successfully owned AND managed all aspects of a business can be risky. Especially when you are writing large checks to them.  More and more you are seeing business’s unable to meet their obligations to complete a job or worse cut corners to protect their wafer thin margins.  It goes without saying that when hiring a contractor that you should hire a licensed contractor, but don’t assume automatic credibility if the company you are hiring does have license.  Check the status of then license on-line, the higher the number the more recent the license, most often indicating a new company and newly licensed person.  Licenses starting with a 9 are typically very new.  Let them experiment on someone else and search for a firm that can prove their stamina and commitment to the business.  Be overly cautious to new companies appearing now.  Times like this can foster new opportunities for business start-ups.  Many business have scaled their operation by reducing work forces.  Due to the employment conditions this is resulting in past employees attempting to start their own business because they feel they are left with no other options.  The down side of this is that our industry is filled with many indians and a few chiefs for a good reason.  Most that aspire to be a business owner in our sector fail because they lack the knowledge and/or educational BUSINESS background to pull it off.  In any small business I have said you need to know a little about a lot beyond your core competency and posses foresight, keen instincts and common sense.  It’s amazing to me how many people DO NOT posses this.   A few compounding forces such as the current economy, financing availability and scale of small business’s are likely to increase the risk factor exponentially for a business to be around to complete your job.  Under capitalization is an understatement for business like these and in construction a small business must have a fair amount of working capital to progress through construction.  Pay special attention to the schedule of payments and lien law requirements required by the state of California before signing a contract. Visit Business Establishments before making a decision.  Now-a-days it’s critical for a homeowner to understand where the business they are considering to spend the LARGEST PURCHASE ever made is located.  Solid remodeling firms should be able to have a commercial location that represents their company and that can be visited.  If you are considering a new company or a company with no location be concerned that your risk factor has been elevated. Insurance Evidence and History is a good indicator.  As a general contractor in California we are required to carry BOTH liability and Workers Compensation Insurance.  Ask your contractor if they have employees.  If they don’t then this indicates they sub-contract ALL the work.  This leads to insurance exposure and sub-contractors are notorious for inconsistent insurance coverage.  In addition a company with no employees is a sign of weakness in their company structure leading to loss of control over their schedule.  Furthermore if a company claims they have NO employees and claim exempt on their workmens compensation certificate they are not allowed to have ANY persons work on the job unless they are LICENSED subcontractors.  TO PROTECT yourself ask for all the copies of subcontractors insurance certificates with your remodeling contractor listed as ADDITIONALLY INSURED and their license numbers.  Don’t do this and expect to assume ALL responsibility for the numerous people working on your job.  See my previous posting on insurance here http://wp.me/pdUNb-f Now’s not the time to messing with, likely, your largest and most personal investment and the last thing you want to be is a test dummy for a NEW or questionable company.
About the author

Bill Reid

Founder and Owner of Remodel West, a residential design and construction firm, originally established as Cupertino Kitchen Design in 1992. I have created a very progressive company with a high level of quality standards. Over the years, the company has built revenues to 8.5 Million and scaled operations as we rolled with the times. By re-branding the business in 2007 to Remodel West, we aimed to better align our name with the scope of work performed. I am a Certified Graduate Remodeler through NAHB and Certified Green Building Professional through Build It Green and most recently Certified Renovator through the EPA which is now a federal requirement. My primary goals are to design and build more eco-friendly projects, to do projects for those clients seeking high quality. My professional background stems from twenty-six years of hands on experience beginning in 1985 in cabinetry design and sales, and progressed to my involvement with a startup company from 1987-1991. In 1992, at age 26, I started Cupertino Kitchen Design/RemodelWest. My strengths are creating a vision for our company, planning, and empowering our employees to accomplish our goals. Sue and I have been married 26 years with three wonderful children, Jessica, Michael and Adam and of course our dog Ellbee. We live in Los Gatos and enjoy visiting our home in Lake Almanor, fishing, brewing beer, reading and relaxing.

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