Study Highlights Strengths of NARI Members
Contractor members of the National Association of the Remodeling Industry exceed industry norms, employing more people, having higher sales volumes and averaging more sales per employee than non-member contractors, according to recent research conducted by Consumer Specialists. Data is highlighted in Tables 1-3.
|Number of Employees|
"I expected that NARI members would be doing better than the industry on average," notes Fred Miller of Consumer Specialists, "but I didn't expect the extent of the difference in sales per employee."
"On a basic level, these characteristics assist in understanding the business strengths that NARI members possess," adds Dan Jaggers, chair of NARI's strategic planning and research committee. "Anecdotally, we've heard from many a member who said their business success is owed to NARI and the learning opportunities it provides."
The study compared data for "generalists" in the Home Improvement Research Institute 2011 Remodeling Professional Study with data from NARI 2011 members. Time in business was nearly identical between the groups, with the average NARI member in business 19.7 years and the average non-member in business 20.9 years, researchers note.
|No Full-Time Sales People||48%||36%|
Almost all respondents (95 percent) reported individual ownership, with 4 percent owned by holding corporations and 1 percent by ESOP. Eighty-five percent of businesses are owned by the original owner, a fact that came as a surprise to researchers. "The continuity of the businesses was greater than I expected," says Fred Miller of Consumer Specialists.
The majority (91 percent) of members have businesses structured to shield owners from liability, with S-Corps leading at 52 percent, LLCs at 24 percent and C-Corps at 15 percent.
Ninety percent of respondents reported employing fewer than 18 people, most ranging in age from 24 to 54. NARI member businesses most frequently (53 percent) offer health insurance for their employees, with 86 percent of those that offer it reporting they subsidize 40 percent or more of the cost of health insurance.
There was a broad range of methods of operation, with a high percentage of general contractors (79 percent), but 42 percent reported being the sole contractor on their projects. Ten percent reported also acting as a distributor of a national product line. Most commonly, respondents owned businesses with one location, at 92 percent. Only 7 percent reported having two business locations.
Ninety-nine percent reported doing business remodeling or repairing existing homes and 37 percent reported working on the renovation of commercial buildings. Few reported doing business in new commercial building. With regard to residential remodeling, 80 percent of respondents offer more than one type of remodeling service, but only 7 percent reported offering five or more.
|Years in Business|
|5 Years or Less||12%||14%|
|26 Years or More||32%||32%|
"Surveys like this help our leaders to proactively respond to changes in the market, and changing member needs," Jaggers states. "The data also demonstrates the strengths of NARI members to withstand challenges in the economy."
The organization intends to use the data collected to find ways to better serve members, Jaggers continues. "We have areas to explore to help NARI offer educational content that will help members be even better in business," he concludes. "This is just the tip of the iceberg."