Message from Doug--An Upward Trend and Giving Thanks

We have seen more activity in the single-family market over the past year than the previous two years. You may ask, “Is this a trend?” or “Is this a sign that we have seen the bottom and are on our way out of the great recession?”

Frankly, I have no earthly idea. My confidence in my ability to judge the market has been drastically eroded over the last five years. I am simply appreciating it as it comes.

This year has certainly been better for us than 2009 or 2010. It isn’t saying much, though, to have a better year than 2009. Our revenue in 2009 was just slightly higher than our highest sales month in 2004!

With the increased housing activity builders are finally getting jobs to bid. However, they are finding that many of their Trades are no longer around. Or, their usual Trade is in shambles and cannot get the work done correctly or quickly. Builders are nervous about using or relying on them.

I am very thankful that our company is still here. Still able to handle a blitz of jobs - and then the inevitable slow periods that follow. We are continually picking up new clients that are building homes in this economy. And, we have established relationships with builders that are eager to tap into our expertise…as soon as they get a house to build.

I cannot overemphasize the impact that referrals from our clients have had on our business. We have a rabid client fan base that understands how we help them be better building companies. They go out of their way to recommend us to others.

We have a rabid client fan base that understands how we help them be better building companies. They go out of their way to recommend us to others.

Sometimes companies that provide exceptional products or services run the risk of becoming their customers’ “Best Kept Secret Weapon.” I am grateful that our clients have not taken this stance with our company – they spread the word. For that, we are extremely thankful.

We are also very thankful for all of our clients throughout 2011. Thank you. You’ve provided the turkey on our table and we appreciate your business tremendously.

One of those clients that have been a bright spot throughout the last five years is Cobalt Contracting – the subject of our Feature Interview on the next page. They are part of our core group of clients that have remained active by being nimble and flexible while sticking to their core building beliefs. I think you’ll enjoy reading about them.

So here we are, with Thanksgiving upon us. In spite of the uncertainty and turmoil of the last five years, we have so much to be thankful for. There are always bright spots in our lives – if we look for them. What are you thankful for?

Happy Thanksgiving,

 

P.S. Would your spouse thank You if you won a FREE Turkey? Then look on page 3 for your chance to bring home a free turkey to feast on this Thanksgiving.

Feature Interview: Cobalt Contracting

 

Company: Cobalt Contracting Co-Owners: Kevin Nelson and Jeff O’Connell New home price range: $550s - $800s Primary building locations:  Brookhaven, Decatur, anywhere inside the Perimeter Website: www.CobaltContracting.com

Cobalt Contracting, co-owned by Kevin Nelson and Jeff O’Connell, is a home building company located in the Brookhaven area. They build custom and spec. homes and have a busy remodeling business as well. Friends since high school, Kevin and Jeff started their own company in 2004 after quitting corporate jobs.

“We took on a lot of odd jobs, additions, and remodel work to get hands-on experience before quitting our day jobs,” said Jeff. “After we went out on our own, we built three spec. houses in the Walden Park master planned community located in South Fulton.”

That was the beginning of the company’s success that includes building many new homes and additions, and most importantly, having happy clients. Their business continues to grow despite the economy. “This will be our best, or second best, year in business,” said Kevin.

Stress-Free Pricing Structure

A big part of their success can be attributed to their pricing structure. They give their clients a price for a project, and stick to that price. No hidden fees or nickel and dime charges surface during the building process.

If hand-dug concrete piers are needed in the footing due to poor soil, their clients will not be asked to pay for that extra, unforeseen work.

When asked about this, Kevin explained, “If we were to go back to our client with extra charges of $200, $500, or $1200, then tension would develop. They would become uneasy with the building process. Because we stick to a set price, we remove that obstacle and let them relax and focus on the excitement of getting a new house.”

Jeff added, “Our job is to internally manage a building budget based on the price we gave them. Sometimes our client will ask about the budget, and we always respond by telling them that we are building their home for the price we quoted, so that they never have to worry about changes to a budget.”

“Since using Herbert Construction, we’ve reduced the amount of time spent on foundations. They’ve eliminated the headaches and problems that are common with that stage of home building. We recommend them to everyone.” — Jeff O’Connell, Cobalt Contracting

The entire process is designed to give the client a stress-free building experience. The payoff is in the referrals from these happy clients. “All of our work comes from word-of-mouth referrals,” said Kevin. “Our past clients are our best sales tool.”

Cobalt is known for going back and doing minor repair work, or resolving issues on homes they completed years ago. Jeff explained, “We don’t have a ‘one-year warranty’. We guarantee our work. We will come back and fix things long after many other warranties have expired.”

Kevin and Jeff are also active locally. “Most of our clients live where we live,” said Jeff, “they’ve become friends that we see throughout the year. We’re all part of the same community.”

A Passion for Home Building

When asked if the dramatic decline in new home construction has made them question their decision to become entrepreneurs, they quickly dismiss the idea. “We just really enjoy this and want to build houses,” said Kevin. “We both have other skills and could go get a  corporate job. This is where we both choose to be.

Jeff added, “We actually look forward to coming to work every day.”

This passion is evident in how they deal with their Trades and clients. What you see is what you get. They are honest, relaxed, and friendly.

The Cabinet Business

Kevin and Jeff had a hard time finding high-quality cabinets that didn’t cost their clients an arm and a leg. They realized that there was a need for this - even in the depressed housing market. After checking into it, they decided to start their own cabinet company, Cobalt Cabinet Co.

This decision proved to be beneficial to their own home building business. And, that new business has grown as they’ve begun manufacturing cabinets for other builders as well.

Good Trades Are Crucial

One of the biggest lessons Kevin and Jeff have learned throughout their building career is the importance of having the right Trades. “They are the ones actually doing the work,” said Kevin. “You have to have a good group of subcontractors that you work with.”

“Herbert Construction is our best subcontractor,” stated Jeff. “They are a top notch company. We know their foundations will be trouble-free and last a lifetime.”

Kevin added, “They are a ‘real’ company, not some guy with a set of forms that’s only been around for a couple of years. They are super professional, extremely organized, communicate with us constantly. They always show up on time, and they do what they say they’ll do.”

When asked about the Turn-key process, Kevin said “We’ve used labor-only concrete guys in the past. Once we started using Herbert Construction’s Turn-key service, we have saved ourselves a lot of time and headaches. We make one call and it’s all done for us. Bottom line, they save us money.”

Jeff added, “We know we can’t buy concrete as cheaply as Herbert Construction Company can, so why bother? It’s cheaper for us to have them take care of everything.”

David Summey, General Superintendant at Herbert Construction Company, manages Cobalt’s business. “David is great to work with. He responds quickly and we can always count on him. He is really good at establishing wall heights. I have 100% confidence in his abilities – which frees me up to do other things.” said Kevin.

Free Time

When asked what they like to do when they are not working, both replied that they like to spend time with their family. “And watch college football,” added Kevin with a grin.

Halloween Fun

Every Halloween I dress up in a Gorilla suit for the trick-or-treaters in our neighborhood.

I built a gorilla cage out of rebar and put it in our front yard. Once the kids grab their candy, I break out of the cage and chase them down the hill. I then get back in the cage and wait for the next group of kids. It’s a huge hit for the kids and parents in our neighborhood.

Doug warming up to frighten the kids.

The caged gorilla before a scream-inducing break-out.

L to R: My daughter Ella, me, Amelia (daughter of my sister Amanda, our V.P. of Operations, and her husband Josh, our Senior CAD Operator), and my son Hage.

Message from Doug--3 Men Short, 2 Flat Tires, and 1 Wall Poured

The other day we had a typical day scheduled.  We had a basement wall that had to be set up (formed) and poured.  It was very important to our client that it was done that day to maintain a very tight building schedule. 

Under normal circumstances, it would be easy to make that happen for them.  However, our “typical” day quickly turned challenging.

“Our client never knew about the delays and setbacks – or what we had to do to overcome them.  And, that’s the way it should be.  We made it happen…”

Three men from our usual seven man wall crew didn’t show up in the morning for various reasons.  We were now working with almost half the crew we typically have to set up and pour a wall. 

One of the four men that were present was a new guy, so he wasn’t as helpful as one of our regular men.  We were at a big disadvantage before we even left the shop that morning.

On the way to the jobsite, we had not one but two flat tires on the crew truck.  There was apparently debris in the road and it got the best of two of our tires.

In order to get the men to the jobsite as quickly as possible – and still make the wall pour that day – our man at our shop drove another crew truck to meet the truck with the flat tires. 

The men transferred all of the materials and equipment onto that new truck.  They were then able to drive the replacement truck to the jobsite and get started.  Our shop man stayed with the truck, replaced the flat tires, and drove it back to the shop.

In spite of the severely reduced crew and the two hour truck delay, we still were able to pour the wall that day.  Our client never knew about the delays and setbacks – or what we had to do to overcome them.  And, that’s the way it should be.  We made it happen and our client was able to maintain their tight building schedule.

What started out to be a “typical” day turned out to be a challenging day, but we still got the wall poured – and kept a client happy.

On a different subject, it’s the Halloween season.  While the average person may be spooked by ghosts and goblins, we in the construction industry have seen many more frightening things over the past five years.

This Great Recession has sucked our cash reserves dry, made us talk with spooky bankers, put the ax to valuable employees, and at times had us walking in a confused, angry daze like Frankenstein’s monster.

However, we’re still here.  Still fighting.  Each of us still looking for opportunities in the new economy.  Because that’s what entrepreneurs do.  Even if we do find ourselves sometimes saying: Enough already of the “Tricks.”  Where are the “Treats”?

Happy Halloween,

Recent Referrals

Referrals of our company are like blood to a vampire…we couldn’t survive without them. The following exceptional people are all repeat referrers of our company. Without ya’ll, this year would have been very spooky! Thank you!

Charlie Borg, Traton Homes — Homebuilder www.TratonHomes.com

Dale Peek, Peek Design Group — Architect www.PeekDesign.com

Pierre Coiron, P.E., Stability Engineering, Inc. — Engineer www.StabilityEngineering.com

Jonathan Bunn, Traton Homes — Homebuilder www.TratonHomes.com

Make This Machine Work!

A young executive was leaving the office late one evening when he found the CEO standing in front of a shredder with a piece of paper in his hand.

“Listen,” said the CEO, “this is a very sensitive and important document here, and my secretary has gone for the night. Can you make this thing work?”

“Certainly,” said the young executive.  He turned the machine on, inserted the paper, and pressed the start button.

“Excellent, excellent!” said the CEO as his paper disappeared inside the machine.  “I just need one copy.”

Concrete Foundations Association Annual Convention

At the end of the Summer we attended the 2011 Concrete Foundations Association of North America (CFA) Summer Convention in the heart of the Blue Ridge Mountains in Virginia.

Project of the Year
While there our company accepted the Project of the Year Award for the best Above-grade Concrete Home.  This is a 12,000 sq. ft. Italian influenced above-grade concrete house that we constructed near New Orleans, LA.

Stucco will be applied to our exterior concrete walls.

It is a two story home with a Terrace Level (walkout basement).  It has two 2-car garages, with one of the 2-car garages on a structural concrete slab to allow more space in the Terrace Level.  The rear porch is an elevated structural concrete slab.

The exterior walls utilized the Thermomass® insulated concrete sandwich wall product.  The wall makeup was 4” concrete on the exterior/2” rigid insulation/4” concrete on the interior.  Stucco will be applied to the exterior wall surface while plaster will be applied to the interior.

Barry Herbert (left) and Mike Hancock of Basement Contractors, Inc. (right) accept the Project of the Year Award from Ed Sauter of the CFA.

Our project was selected among outstanding entries from across North America.  The entries were reviewed and voted on by industry experts as well as many of the 50,000 attendees at the World of Concrete show/convention in Las Vegas. 

The award is given each year by the Concrete Foundations Association  of North America for the best above-grade concrete home.

This project was a joint venture between Herbert Construction Co. and Basement  Contractors, Inc., our good friends in Edmund, Oklahoma.  Among other things, they performed the excavation and placed the flatwork.

Robert D. Sawyer Award

Barry Herbert (left) and Scott Smith of MPW Construction Services (right) present the Robert D. Sawyer Distinguished Service Award to Terry Lavy of Piqua, Ohio.

Also at the Convention, Barry Herbert, CEO of Herbert Construction Company was a co-presenter of the Robert D. Sawyer Distinguished Service Award to Terry Lavy of Piqua, Ohio. 

The award is presented to a contractor member whose contributions to the industry merit special recognition.  Barry is a past recipient of the award.

 

 

 

 

Marketing Presentation

Doug sharing marketing methods during his presentation at the convention

During the educational seminars at the Convention, Doug Herbert gave a marketing presentation to the attendees titled, "How To Reduce Your Advertising Costs And Increase Your Sales With Effective Marketing."  It included a special segment that explained how contractors can easily and cheaply outsource tasks without hiring another employee. 

If you’d like a copy of that PowerPoint presentation, including a funny audio of “Arnold Schwarzenegger” addressing the crowd, send a quick email to Chris at our office, ChristineB@HerbertConstruction.com.