by Jim Cory
Building an exterior remodeling business can be tough. Sustaining it tougher yet. Growing it hardest of all.
Take the case of roofer/remodeler JIM LYDON. A dozen years ago, the Scituate, Mass. Native did an occasional roofing job on Nantucket, the 19th-century whaling port that has become one of the poshest vacation spots on the East Coast.
One day in 1987, as Lydon was returning from one of those jobs, a general contractor tracked him to the Nantucket airport and asked if he could put the roof on the island's new high school. During that lengthy project, Lydon discovered the island was a different kind of work experience. On the mainland - Cape Cod and the towns south of Boston - competition is fierce, profit margins slender and roofing jobs neither lucrative nor abundant. Nantucket, by contrast, offered the remodeler and his crew all the well-paid work they could handle.
The problem? Trying to run a business where workers can't afford to live near their jobs. They call their constant scramble for affordable housing the "Nantucket Shuffle."
"I know how to do roofing in a place where the winters are rough," says Jim Lydon as his blue pickup bounces on the cobblestones that pass for real streets in downtown Nantucket. The truck rolls onto one of the few highways on this island, which is just 20 miles long and 5 miles wide at its widest point. A single lane of gravel and sand winds to a house on a bluff where Lydon's crew bangs away on a roof. Below, a beach with almost no one on it stretches for miles in both directions. It may be the most expensive empty beach in America.
Any morning the weather's good, a hundred or more contractors and construction workers like Lydon's board small aircraft in Hyannis for the 15-minute, $56 flight to Nantucket. Lydon's four-member crew of roofers and carpenters flies in Monday and out Friday unless he needs them on Saturday - as he often does.
Lydon's employees don't mind flying to work or staying over in rooming houses or apartments. He picks up the tab for both. And the crew's wages are excellent: $25 to $35 an hour, depending on skills, for the typical 60-hour week. "That's why the guys like being out here," Lydon says.
But he remembers times when "we'd be finishing up a job on Friday afternoon, and I wouldn't know what we were supposed to be working on Monday morning." That was life on the mainland, where Lydon did most of his work 12 years ago, with occasional jobs on Nantucket.
Today, the situation is exactly reversed. The island, 30 miles south of Cape Cod, has 50,000 summer residents and just less than 8,000 year-rounders. Thanks to the way he has adapted his business to suit this ripe but problematic market, Nantucket provides James Lydon with 90 percent of his company's jobs.
Where price is no object
Shifting his business to Nantucket took some time - and had its ups and downs: In '90 and '91, when the New England construction market collapsed, Lydon never once set foot on the island. Now that he's established, he finds Nantucket solved two of the problems he finds most irritating: competitors - most of whom can't be bothered to fly over and stay all week - and clients who haggle on the price or stiff him. Often he doesn't even meet the client.
He remembers one job for people who lived in Hong Kong. "When we got on the roof I realized we were going to have to lift the cupola off first, which you can't do with four guys. We went down the street and found three other guys on a job to help us." Lydon sent the owners a dozen Polaroids of the work and included and extra $3,200 in his invoice for taking the cupola off and putting it back on. The owners sent the check by overnight mail, no questions asked.
On another occasion, he estimated a roofing job at $50,000, asked the client for half the money up front, and told her he'd begin the work after Christmas. She sent a check for the full amount three months before a single shingle was laid.
Work on the island is "at least 50 percent, sometimes even 100 percent, more per job," Lydon says. For example, Lydon recently gave a customer two separate estimates. Re-roofing with wood shingles - which better resist Nantucket's 60 to 70 mph winter winds - would cost $34,000. Re-roofing with architectural asphalt would run about $18,000.
"What do you think?" she asked.
"Wood shingles," he replied: "If you have the money, it's worth it." The customer never hesitated.
Living vs. working on Nantucket
But don't pack your bags for Nantucket just yet. The amount of work Lydon can do is limited by the fact that his employees have to fly over. In the 10 years it has taken to sink roots here, he's found exactly one person who resided on Nantucket to work for him. His biggest problem - an ongoing one - is getting good help, "and the only way to overcome it is to pay good money."
People on the island live in a variation of the Cape Cod salt box. The houses are sided with cedar shakes and left unpainted to go their distinctive brown shading to gray. Charming, to be sure, but that charm comes with a price tag. Small homes cost between $300,000 and $400,000. Houses in the $6 million to $7 million range are not uncommon. ("See that?" Lydon says, pointing to a small outbuilding. "That's the entrance to an underground squash court.") Lydon himself is priced out of the marked he's targeted, cultivated and pretty much captured, at least for roofing work. After 10 years, he's still doing the Nantucket Shuffle from one short rental to the next. "I've been looking for a house in the $350,000 to $500,000 price range," he says. "There aren't many."
Today Lydon's business, which grossed close to $1 million last year, has three major revenue streams. He subcontracts roofing for several general contractors on the island. He does a lot of residential and occasional commercial re-roofing. And increasingly, he builds decks and additions because of the two skilled carpenters working for him.
New construction offers the steadiest and most lucrative work. But it's also the most temporary. The town of Nantucket approved 180 permits for new construction in 1998, 150 for '99, 125 for the year 2000. Every time a house is sold, 2 percent of the transaction, payable by the buyer goes to a land bank charged with purchasing Nantucket's remaining open space. Forty percent of the island is now unbuildable.
Keeping up the quality
Over the years, Lydon found new business on Nantucket by advertising and building relationships with the island's many caretakers, people whose off-season work involves maintaining vacation homes. A lot of his success in building the business has been about "just showing up on time," he says.
Now the problem is figuring out how to take advantage of the reputation he's established for himself. He's tackling that challenge in two ways. This past summer he moved his wife and daughter to Nantucket so he'll have more time to manage the business he has and then find more. He's also looking to hire another carpenter for his crew. That way he can expand the amount of non-roofing work his company does, which can potentially double his sales.
Lydon's long-range goal is to go from being essentially a roofing company to a "full-fledged general contractor." But, he says, "the toughest part is to do that and keep control over the quality of the work so you don't spend you time driving around and making less money when all's said and done."
Early last year, he launched a web site (www.jameslydon.com) that offers photos of recently completed work. He hopes it captures the attention of New Yorkers and Bostonians who summer on the island and may be looking to re-roof their million dollar homes. Add a room. Or build a guesthouse - with an underground squash court, perhaps?