The following summarizes a question and answer session with Brent Salter and the graduate students on Thursday, September 14. Compiled by Thomas Rhoden.
Q: What was the turn around time on the Lake Martin house that you saw?
A: Completed and sold, and sold again within 6 months
Q: What are your Ideas on mobilization and labor for the Lake Martin project?
A: He would rent a cabin on the lake to house the crews for as long as it took. He would still supply as much of the material as he could from his own store. He would leave it up to the labor as to how many shifts they wanted to work to achieve a 40-hour week. Also, he would establish a bonus system to help motivate the men. He would offer the superintendent up to a $10,000 bonus.
Q: What would the bonus be based on?
A: Productivity
Q: What is the name of your hardware store?
A: Ace Hardware
Q: How do you keep from spreading yourself too thin by managing two businesses at once?
A: His father oversees the store and also employs a full time manager
Q: What trends do you see in the future for the constriction market?
A: In the residential market, Salter Construction’s workload has remained the same for 13 years. Brent does not foresee that changing. In his area, there are plans for a new healthcare facility soon and that should bring a lot of new people into the area that will need a place to live, so that should add to the market soon.
Q: Do you have plans for any commercial work in the near future?
A: Not big commercial work, but he would like to do some light commercial work. Salter Construction is currently working on a pharmacy renovation and a multifunction warehouse.
Q: Have you considered expanding your residential business?
A: He would like to, if the market required it and would support it. If he did expand, he would probably have to hire a superintendent to put in charge of around three jobs at a time.
Q: Does Salter Construction have any present employs that could step into that managerial sort of role?
A: No
Q: Do you know of any people that you could hire that might be able to fill that role for you?
A: Yes, one or two.
Q: In order to grow your company, do you believe that you will have to be able to perform work in different areas?
A: Yes
Q: Would you prefer some market over another?
A: The gulf is around an hour and a half away from Evergreen.
Q: Do you have plans to market the quality of the workmanship that goes into you product?
A: We do advertising and try to display our work, but it is hard to make people understand. You are basically advertising an intangible thing that the viewers have not seen.
Q: Do you document the construction process, like some of the extra things that you do:
A: Not as much as I should.
Q: What about a historical photo album of some of your successful jobs? It seems like that could help with the customer understand the chronology of what you do. You could also use that as a sales tool to help emphasize the quality in some of the things that the customer never sees.
A: We would definitely like to get better at that.
Q: Do you have a website?
A: Yes but there are not many people in the local market that utilize the Internet.
Q: How long has your family owned the hardware store?
A: 85 years
Q: What is the population of Evergreen?
A: Around 5000 people.
Q: Do you foresee any growth in that area in the near future?
A: The city has plans to develop a new industrial park soon. The main holdup there has been getting sewer and water to the location.
Q: What is the Zip code in Evergreen?
A: 36401
Q: Do you have a contingency plan in case something happened to you? What would happen t the design part of your business?
A: There is no contingency plan; the company would probably revert back to strait construction.
Q: What is your profit margin?
A: Between 12% and 15%.
Q: What is the average sales price of one of your new houses?
A: $150,000 average for new construction. The average job, new construction and renovations, is around $75,000-$80,000.
Q: What is the time period for a new house to be constructed?
A: 5-6 months, average
Q: If you were going to expand would you hire more people?
A: Yes, he would like to hire managers and sub out any work that he could self perform. Any sub that was going to work for him would have to really have some good credentials though because he does not like to have to guarantee other peoples work. Ultimately he would rather hire good people than sub out the work.
Q: Has the hardware store been a good sales tool for you?
A: What goes into the house depends on what the customer wants. The store has a lot of samples so it is a good way to help the customer make a decision. Also, he can get just about anything that the customer would want in their house through the store. He also has plans to build a showroom with products that might interest new homebuyers.
Q: How do you sell material, like flooring, to owners?
A: They usually have an idea of what they want when they come in. He usually just helps to guide them.
Q: Have you considered marketing just your design services separate from your construction service and is there a market for just the design service in your area?
A: He does not mind doing just the design for a customer, but he could no handle any more business right now. If he was going to focus on marketing the design aspect of his business, he would have to hire another designer.
Q: Do you want to grow and why?
A: He wouldn’t mind growing as long as he can maintain his quality and profit margins.
Q: Are there any threats from outside competition in your area:
A: Mainly with shopping his bids on new construction. He is surprised at how many customers will accept a price from a contractor without getting it in writing. Many contractors will underbid him and then tack on thousands of dollars in changes by the time the project is over.
Q: Do you dress up your estimates so that they can be used as a sales tool?
A: Yes, they are very dressed up visually. They also have everything in them. The things that the customer has allowances for, the customer knows about, and the things that will not change are made clear to the customer as well.
Q: Do you think people are intimidated by your estimate?
A: I don’t know. Most of my customers have never undertaken something like this before so it is possible.
Q: Do you use NAHB resources?
A: No
We would like to thank Brent Salter for the time and effort that he has contributed to this discussion.