Gary Howe, a custom builder and high-end remodeler in Gig Harbor, Wash., became a businessowner the way perhaps most custom builders do, with a smile on his face and one eye firmly shut. At the age of 24, a skilled carpenter without a shred of business experience or formal business training, he decided he could run his own company. “I didn't know any better,” he says nearly 20 years later. “I just knew how to build things.” Like most builders who innocently step off that cliff, he quickly learned that running a business is a challenge equal to that of any building project. And like every builder who survives the plunge, he had to gather the necessary business skills and resources in mid-flight and without a net. “I remember the moment it really dawned on me that I could make some strides toward getting myself together as a businessman,” he says. It was at an industry trade show. Six years later, Howe quotes verbatim from the seminar on cost-plus contracting he credits with showing him how to charge fairly for his work. Until then, he admits, “I was making money, but not near what I should be. And I was in business 13 years prior to that.”
For Howe, as for many of his peers, becoming a businessman was a consequence of pursuing his goals, rather than a goal in itself. “You're forced to be a businessman,” he says, “because of your strength, your independence,” the character traits that drive certain craftspeople to take control of their own work. Having gained a grip on his numbers, Howe says of his dual role, “I like both sides of it equally.” But his heart is still out on the jobsite, and he sells his company on his technical expertise and hands-on involvement. The business side is “fun and challenging, but I truly love the building process. I would definitely say I'm a builder who happens to be a businessman.”
The work of balancing business and technical roles will be familiar to any custom builder. Indeed, it has proved more than a match for many. But not all builders arrive with a bias toward the technical side. Ask Mitch Handman which half of the builder's split personality he favors, and he answers immediately, “It would be a businessman first, because that's my background.” Handman first walked through the door of R.C. Legnini, the Philadelphia-area custom building and remodeling company he now runs, as a business consultant with no direct construction experience. Handman designed and sold job-costing and accounting systems for builders before partnering with company founder Bob Legnini, who has since retired. That prior experience gave him at least one clear advantage over other builders in his market. “They tend to be good craftspeople,” he points out. But on schedules and budgets, “they kind of fall down on the job, and those have been our strong suits.”
But if Handman's background gave him a head start on builders who earn their business skills by the seat of their pants, he had some catching up to do in other departments. “I really had to learn the trade part of it by relying on some other folks to kind of train me,” he says. “It's probably taken me the better part of 10 years to talk intelligently about most parts of the business.” It takes a lot of humility to make a statement like that, and a lot of energy and commitment to have made good on it. But from a business perspective, Handman points out, his approach has been sound from the beginning. His grasp of the company's numbers “allows us to do more profitable work and keep our eye on the ball.” As for the technical aspects of construction, “I have folks who are in our company who have that expertise. It gives us a complete package.”
Boston-based custom builder Finley Perry started off without the benefit of an apprenticeship in the trades or a business education. A Stanford graduate in political science, he was working on the staff of Massachusetts Governor Francis Sargent in 1973. Bored with the endless meetings and craving a sense of accomplishment, he decided to jump into building, the difficulty of which he now admits he grossly underestimated. But while he claims never to have become a great carpenter—“You have to have your hand and your brain connected,” he says, “like Pedro Martinez, in a way”—he discovered a natural knack for management. Still, learning the business from the inside while running jobs in the field is somewhat akin to learning to drive by leaping onto a moving bus. And while Perry has found his natural niche—as a manager rather than a job superintendent—“It took me 15 years just to give up doing the work.”
In business now for 30 years, and with a stack of impressive projects in his portfolio, Perry credits his survival in the business to an active involvement in industry associations and a constant quest for knowledge. “[That approach] was very haphazard, but I always kept my eyes open,” says Perry, who now plays to his own strengths by running a management-only company and subcontracting all field work. While a first-rate builder must attend to craftsmanship and service “in a major way,” he says, “in order to do the right thing by my clients I have to be a businessman first.” His company has thrived, “because we're very clear about what we can do and can't do, and those are really business practices, not trade practices.” Perry recognizes and admires craftsmanship, but he knows it is no guarantee of success. “There are an awful lot of builders who've gone out of business whom people just loved.”
The craftsman-builders who prosper tend to be those who embrace the role of businessman, and that can hurt a bit at first. John Abrams leads South Mountain Co. of Martha's Vineyard, Mass., an employee-owned firm whose management structure is one of the most innovative in the industry. But he began as a back-to-the-land carpenter and was long reluctant to view himself as any kind of businessman. “It didn't fit my image of myself,” he says. “I thought of myself as a craftsman.” Since crossing that mental hurdle, however, he has brought remarkable creativity to the task of crafting a company. Among other forward-looking policies, South Mountain offers all five-year employees an ownership stake in the company, giving experienced workers an incentive to stay and build the company rather than leave and start their own.
But the success of that program has created other challenges. “We have an aging workforce,” Abrams says. “Nobody is near retirement, but they're getting too old to run around on roofs all the time. How do we evolve as a business?” And then there is “the legacy aspect,” as he puts it. “How do we succeed me? How do we work in my absence?” Asking such big questions has come to define Abrams' role as much as tending to the bottom line. “My job is definitely to run a business, but it's actually becoming more and more to be the daily design of the business.”
Abrams relishes his ever-evolving role, but he wishes there were an easier way for young builders to negotiate the passage from craftsman to businessman. “There's no warning on the pack,” he says. “When you go to the lumberyard and buy your Estwing hammer there's no warning on the label. Everybody learns this stuff in a vacuum.” In that regard, starting a business is like starting a family. Whatever passions lead you to do so, the result is a living being, which now you must nurture. You started your company because of something you wanted—independence, financial security, creative freedom—but once begun, a company is no longer solely about you. This entity, these employees, projects, and clients, are now your responsibility. Custom builders may legitimately identify themselves as builders first or businessmen first, but the wise ones recognize that without being the latter, they won't get to be the former for long.