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We chat with William E. Carter, president of the National Association of the Remodeling Industry, about the business of contracting, working during an economic slump and what remodeling clients can be optimistic about.
You list an impressive number of contractor’s licenses on your website. Which was first? My general building license.
Q. Did you go to school for that? No. I was in college doing an organizational communication major and a minor in Latin at Sac State, and I was thinking about law school. I had even taken the LSAT. One summer, when I was looking for work and painting houses, a real estate agent I knew told me I should get a contractor’s license, and so I went and took the test and for 35 years I’ve never looked back.
Q. But you got the degree, too. Yes. I actually stopped going to school about 10 units short of my master’s degree.
Q. And then went to work as a contractor? Well, I was about 20 and getting married, and . . . the money wasn’t bad.
Q. Getting started is a little harder now, right? If you don’t have business savvy today, you can get eaten alive, real fast. You’ve got to have capital to start up, insurance, you’ve got to know the lien laws. I could fill hours telling you all you need to know now. . . . But, no, you don’t find too many guys jumping in at 20 or 21.
Q. So what kinds of people do well? That’s so tough to answer. In my 35 years, I’ve spun off a number of contractors locally. . . . They have what it takes to talk to people, to sell, to perform, to track. It takes a lot of talent, a lot of energy. Guys see remodelers making money—they think, “I’m going to do that myself,” and then they start swimming with the sharks and get beat up, and a few make it, but a lot go by the wayside because it’s tough.
Q. You’ve been elected to leadership roles at NARI’s local, regional and national levels. Why do you think members want to follow your lead? I don’t think it’s that they want to follow me so much, but they see what the organization is offering as far as networking and education and especially certification. And now we’re going for national accreditation of our certifications.
Q. What are those? We have certified remodeler, certified kitchen and bath remodeler, certified LEED carpenter, certified green professional and, coming up, we have certified universal designer and certified master project manager.
Q. So is that why I should consider hiring a NARI contractor? Because of the national certification standard? My first thought is you’re hiring someone who’s committed to their business and their employees and the professional caliber of the industry.
Q. How do you think the current economic slump compares with downturns you’ve weathered in the past? Business, like everybody tells me, sucks. The last downturns—’70s, ’80s, ’90s—didn’t register a blip on my radar, but this one is on everybody’s radar.
Q. Because of the credit problems? A lot has to do with credit. HELOCs (home equity line of credit) are gone, home values have dropped 50 percent or more, in some cases. There’s just not a lot of money around now.
Q. Does that mean I’ll get a better deal if I remodel now? I read an article recently in one of the neighborhood rags where they had a local architect say because of the slowdown, guys are dropping their rates 40 percent, like, “You can do a $300,000 job for $180,000.” We can’t really figure out how someone could say something like that because I can’t name one cost for me that’s gone down, and some costs are still going up.
Q. Have you had to lay off employees? Yes.
Q. For the first time? Yes.
Q. Very painful? Yes.
Q. You said earlier that people will take more time shopping for a pair of shoes than shopping for a remodel. Why is that? I cannot figure it out. Here’s what I run into. I’ll put a complete remodel package together for people that has a number of very, very detailed documents that correlate to other documents, and people tell me: “You have the most complete, most professional package, but we’ve chosen to go with the lowest price.” It blows my mind.
Q. What do you want to accomplish in your term as NARI president? Have you heard of Blue Ocean Strategy? It’s a book by W. Chan Kim and Renée Mauborgne, and they talk about the red seas where there’s blood and sharks and everyone fighting for the same ocean share, and then there are the blue oceans, the spots between those red seas where you find your niche in the business and make competition irrelevant—think Starbucks, Southwest Airlines, Cirque du Soleil. I think we needed a triple “A” alignment in our organization to make that happen. The first “A” is awareness: We want consumers and other contractors [to be] aware of who we are. The second is advocacy. We need a grass-roots voice for the remodeling industry . . . and the third is alliances. We need to connect with larger groups. . . . Remodeling has always been a “beat-up” industry. . . . For the most part, we are self-employed, small-business people that put a lot of money into the system, and in California, we’re so overregulated it’s nuts. That’s killing us, and none of the stimulus money that’s coming is for the remodeling industry. Most of that is going for shovel-ready work. For us, it’s beating the bushes and having to fend for ourselves. Now, I’m not trying to be all doom and gloom here, but that’s the feedback I’m hearing, and that’s a reality that’s not often reported.
Q. Is there anything remodelers and clients can be optimistic about? The nice thing about doing a remodel now is . . . we started a job in Arden Park on Jan. 5, and we took it down to the foundation and went from 2,000 square feet to 3,800 square feet, and we’ll be done [in July]. That’s six months. In the past, you had problems getting materials and subcontractors because everyone was so busy and backlogged. So now, if you work with a professional, you’ll get a good, fair job, which means you’re going to get your money’s worth and your contractor will make money, and things will work out well.