On the job: welcome to installed sales. You're a builder now, and reaching profitability means executing project and jobsite management like a seasoned contractor

Prosales, August, 2003 by Chris Wood

So you've pulled the trigger, or have been pushed off the cliff, or actually have found a new business opportunity in installed sales. You've got the latest software, you've got teams of subs lined up, and you've got production builders yearning for framing and custom guys calling in for high-dollar installed millwork. What's next?

You've heard and read everywhere that the No. 1 thing you need to do is pick up the best installed sales manager you can find, fight? You better believe it, and here's why: Management of your projects--from back-end efficiencies to jobsite logistics to cross-trade communication--must be executed to near perfection if you're going to have a shot at profitability in the installed game. Residential construction is busier than ever, but in the quest for faster cycle times, builders don't want a rush job, and they don't want to do it themselves.

"That's the whole idea behind installed sales," says Dennis DeYoung, president of Arlington-Blaine Lumber, a division of Columbus, Ohio-based Khempco Building Supply. "Pro dealers have always positioned themselves to solve the builder's problem," says DeYoung, who founded Khempco's Installed Sales Services (K.I.S.S., not coincidentally) division 10 years ago. "And jobsite management for builders is a problem ranging anywhere from an annoyance to a disaster."

Leland Condon, who worked as a general contractor (GC) for two decades before recently joining Curwensville, Pa.-based Lezzer Lumber as an installed sales manager, agrees that project organization is the raison d'etre behind installed sales. "The builder wants to get rid of the headaches. If he's doing more than a couple of houses a year, there's no way he can manage it all himself," Condon says. "In that sense, we're trying to assist in bringing the jobsite and the project to a higher level of organization than it ever has been."

The Back End

So the question naturally follows: How does the installing pro dealer avoid the same annoyances and potential disasters looming over the builder? Companies with successful business models in this arena say that the best insurance is to get your internal installed sales systems in place before you even hit the jobsite. "We went out and started installing without back-end project management systems and just developed them as we went," says DeYoung. "We made a lot of mistakes and corrected them one at a time before we finally got a good method of controlling it. Today's dealer would be much better off getting those systems in place first thing."

Depending on your level of installed activity, those systems may include invoicing material across business divisions, setting up payment schedules for subcontractors, providing required safety or installation training, and setting up internal communication between sales, labor, and delivery. With installed sales, you are essentially becoming a customer to yourself, and you need to work at that business relationship as much as you would with any other important client.

Like many pro dealers who are seeing success on the install side, The Building Center (TBC), based in Pineville, N.C., set up its installed program as a completely separate business unit. By not combining expense and revenue streams with TBC's distribution yards, the company prevents asset drain and gets a crystal-clear gauge on profitability. "If you co-mingle those business units, you will never be able to strain out whether you are in a viable business with installed sales," says company president Skip Norris. "There was a lot of outlying time and effort in getting our project management systems in place, but you need to prepare behind the scenes before the material lilts the job. Then the complete business can function and serve its customers."

The Front End

Eventually, of course, you've got to get on the job and fulfill the installed component part of the picture. And while basic jobsite management may not be technically difficult, it does require consistent execution and constant communication for any measure of success.

"Our managers and supervisors don't have a checklist per se for each jobsite," says Norris. "On every job, they are making sure that the product is going in properly, that the jobsite is clean, and that we are conducting ourselves in a professional manner." Other jobsite dos mentioned by pro dealers include conducting weekly or daily safety awareness meetings, ensuring product is installed to manufacturer specifications, and reporting any kind of delay or scheduling change to both the builder or GC and the other trades working the job.

Even at the most professionally run jobsite, trades overlap and weather, blueprint changes, and a host of other unknowns can drastically impact construction scheduling. Any #itch immediately puts communications protocols into full play, another reason why many pro dealers turn to former builders and GCs during the hunt for installed sales managers. "People who have come from the builder and contractor side really know how to speak the language to the subs," says Bryan Moehring, Khempco's installed sales manager. "They often have a better understanding of how the jobsite evolves on a daily basis and can communicate changes more effectively."