Victoria: Hi I’m Victoria Downing and welcome to PowerTips Unscripted where we talk about tips, tactics and techniques to help you build a strong, profitable remodeling company. And today I’m not here with my co-host. He couldn’t be here today, so I’m going solo with our guest, Robert Gurinowitsch, which Robert is a regional program manager for Best Bath. This is an awesome company that was also a sponsor at the most recent Remodelers Advantage Summit that was held in San Diego this past September.

Victoria: So welcome aboard. Robert.

Robert: Yeah, thank you for having me. I’m excited. Yeah.

Victoria: You know, this is a really cool opportunity. Like Mark has said, this is a multimillion dollar industry that people just haven’t even put on their radars. But you’re seeing a huge opportunity here. Why? Why do you say that?

Robert: Well, it’s a it’s more of a multibillion dollar opportunity. So when you look at the demographics of the you know, people call it aging in place or the silver tsunami, there’s all kinds of terms. And I’m definitely not one to argue terms. That’s for the politicians. But but the opportunity in this multibillion dollar, arena is huge. And there’s just a lot of people that aren’t aware of what they can do to be able to help.

Robert: Still in like new construction, less than 0.5% of any of the homes are adapted for an individual for aging in place or, or having a disability, child or an adult with them. The homes are not set up for that. So that’s why all these remodeling companies are able to come in and it’s called home modifications. To be able to come in and be able to change in individual’s homes, to be able to help with either the cognitive or the physical disabilities the individuals living with.

Victoria: Okay. You know, you’d think that home builders would start to at least build in the infrastructure here to be able to add things easily because you think would be adding sales value to the home. You know, they could sell for more money, but okay, I guess they’re not there yet.

Robert: No they are they are not there yet. There’s been a lot of people in this industry that have been jumping up and down on architects and builders saying, hey, look, we need this, we need this. And it’s just not happening. So like one of the greatest arguments that has been one is realtors are like, well, once the homes modified, we can’t sell it.

Robert: Well, that has totally flipped. And those homes sell first at a premium because people are looking for something that’s already been modified or adapted. You know, simple things. How about a concrete ramp up into the front door, right? Instead of, you know, 5 or 6 steps and railings, you know, where there’s like a step down inside, you know, one of the sunken living rooms, you know, just simple little things because, well, it’s all prevention is huge.

Robert: And salts right now probably equate to about 62% of all air visits.

Victoria: Oh, really.

Robert: Is some type of assault.

Victoria: Yes. Well, you know, and also, as one gets older, as I’m getting older and as my my mother just made it almost to 100 for she passed away recently. But people are getting older. And what happens to a lot of it is they have a saw. And that’s the beginning of the end.

Robert: It could be, it could be, and there’s ways of preventing it. So I’ve been in this industry for 30 years. My own mom fell and had my siblings promise not to tell me because she didn’t want to grab bars. She didn’t want a handrail, she didn’t want of the day. I did all those things for her when she was at the hospital, and she just loves it now.

Robert: I mean, she’s just and it doesn’t have to look like a hospital, so that’s what everybody in their head thinks. It’s like this has to look, you know, sterile and whatever. Now, I mean, engineering and technology now has changed so much. You can walk into a house and you would not know somebody had a either a disability or a challenge or just aging in place.

Robert: Yep. Because, you know, things look so beautiful now.

Victoria: Right? And one of the things with aging in place, modifications or remodeling is to do things like have different colors all around the floor. So you can see when you’re close to the cabinets or when you’re, you know, getting help. You see those differentiating factors on in the kitchen lighting.

Robert: Lighting is huge. You know, being able to increase those lumens so that an individual doesn’t have a challenge, even individuals that don’t have a disability as they get older, you know, their eyesight, you know, lessens a little bit. And people trip over shadows. I think there’s something there. And it’s not.

Victoria: Yeah. So now you also know a lot about programs that are out there to help these business owners get into this type of work that will help pay for some of the services. Tell me about tell me a little bit about that.

Robert: So every state has what’s called an MCO, a managed care organization. And they work through waiver programs that are called home and community based services. Okay. So our contractors need to apply and there’s a process and I can help them work through it. But there’s a process to be able to get into there, to be able to become a provider.

Robert: And then once you become a provider, then this work gets issued out to these contractors that are qualified to do it. And every state will tell you the same thing. They don’t have enough providers to be able to service it, and not any one contractor typically can handle the majority of the work because timing is off. So one of the challenges in our industry is it’s very reactionary.

Robert: Still. It’s like I just fall in the hospitals kicking me out in three days. I need help at the house. Right. And not everybody can mobilize within three days to be able to, you know, be able to help that individual. And typically it’s like a ramp or a door widening just to get them into the house to figure out what else is going on.

Victoria: Right.

Robert: But these programs, in each state, has between 3 to 5 of these style programs that are run by different agencies. And again, it’s it’s a it’s an untapped market in the remodeling industry. And they are begging and claiming that they just do not have enough providers across the country. And partially they don’t. And part of it is the same thing that you guys have been dealing with for years.

Robert: And you speak at your conference, you know, our labor force is weak and I’m what’s the average age of our contractors? 65 plus 62 plus.

Victoria: Now and older by the day? Yeah.

Robert: And there’s not a lot of young guys coming in. So this is a great opportunity for remodeling companies that are looking for another division or, you know, to increase their revenue by 15 to 20% in a different market. And it’s wide open right now.

Victoria: Wow. So okay, so you mentioned the managed care organization. What is it? Hcbs.

Robert: Those are your home and community based services.

Victoria: Oh, okay. Home and community based services.

Robert: Which is also called, you know, a state waiver program. I mean, there’s different names according to the states, but those three pretty much encompass what is being paid for for these individuals. And most of these individuals are in Medicaid. You know, they’re recipients of that. There are, bank trusts that pay for this. And then also the worker’s comp market is also a huge market for paying for a lot of these, you know, issues.

Victoria: Now, you know, when I hear you talk about that and I hear talking about, okay, people are on Medicaid, government agencies are paying for it. It makes me think that I’m not going to be able to earn the GP that I want to on the projects that I do as a business owner. True.

Robert: So you can so this is where it’s different. So like as a remodeling contractor, you’re used to going in and from a to Z. You’re going to do this. So let’s use a bathroom. You’re going to go in tear up the floor. New toilet fix the walls new wet space grab bars whatever. Well these programs only pay for pieces.

Robert: So you’re going to go in and just do. Let’s use best baths since I represent them a wet space. You go in, pull out the old tub and shower, we put in a barrier free shower. And these programs pay anywhere between 8 and 11,000. Your hard cost lifts the shower unit, and labor is less than five.

Victoria: Okay.

Robert: So those are very, very fair numbers to, you know, or when, you know, for, you know, getting in and out of the house or inside the garage to get in. Yep. There’s 50 to 60% margins. No problem.

Victoria: Wow. Okay. Well, so it’s sounding better.

Robert: Because you’re doing pieces, parts, you know, where people are like, man, I can’t remodel your entire house for $20,000. Well, no, they’re only asking you to do a piece. Right? And then the balance of it either takes gets taken care of the next year out of that waiver program or another funding source comes in. So essentially, you might do work in the same house over a period of five years doing different pieces.

Victoria: Right? Okay. I gotcha. So okay, so you’ve talked a little bit about some of the kinds of work that the Remodelers would be doing in the homes. What do you think? So on average, you know, like one of the things we look at is average job size. And there are different markups and margin goals. Excuse me for the different sizes of jobs.

Victoria: I’m imagining that this is going to be a pretty small average ticket. Each time you go in, like get maybe 15 or less or.

Robert: Yeah. So the average will be between 12 and 15,000.

Victoria: Okay.

Robert: And it’s really down to like a few segment items. So you have ramping up, you have the wet space, you have stair lifts. So be able to get them from one level to the second level. Yeah. Door widening is okay. And then grab bars and railings. Those are your main turning burners and where this is nice for a lot of remodeling companies when they’re at different stages where they have 2 or 3 guys, they’re trying to figure out what to have them do.

Robert: These little 1 to 2 day projects are great little fillers with a decent profit margin.

Victoria: Right? Right. Okay. That makes a lot of sense. Okay. So when you get involved, what are these organizations I’m assuming, like how what do you have to do? You have to get an application. You have to prove your license or whatever requirements are in that state. What else do you have to do to get set up with these organizers?

Robert: They asked for FBI background checks for anyone that will be on you know, on site. So, I mean, if you have guys that may have a little bit of a past and again, we’re in the construction industry, I understand. It’s only for the ones that will be on the job sites that you have to prove, you know, that they can pass an FBI background check.

Robert: The biggest thing that they look for is, you know, anything with abuse.

Victoria: Oh, yeah. Okay. You know.

Robert: Because again, we’re going in to homes where people are a challenge, but one way or another, they’re very, very, you know, critical of, you know, it’s like, hey, yeah. Or, you know, we got to make sure that, you know, we’re not creating an additional problem for these individuals. The only other thing that they have to apply for, which is just a simple process, it’s called an NPI number, and that’s called a national providers index.

Robert: So all Medicare style programs, we require for you to be registered through that. It’s not a hard process, but it is a little bit of a lengthy process. And one of the tricks to the program is, is you don’t fill out a lot of these applications online. You go to the actual agency and do it. You can do it online.

Robert: But when you go to the agency and do it well, one is the case manager gets to learn. You two, you’re creating a relationship. They get to see your mannerisms, whatever. And three the paperwork sometimes was confusing. Let them explain how to fill it out. So yeah, then you know, you do a little lunch and learn. You take them some food while you’re doing this.

Robert: And you I’ve done this probably in 18 states. Now it works every time.

Victoria: It’s great. Okay. So you get approved, you’re on the list. Do you do you have to do any marketing around this?

Robert: The only marketing is doing lunch and learns with the case managers. Because obviously.

Victoria: We talk about in those. Robert.

Robert: Things that you can do to, to help these individuals, you know, it’s like, hey, this is what our company can do. These are the things that we’re familiar with. So obviously they’re going to have to educate themselves a little bit about things that are necessary and universal design and or helping with the aging in place. But it’s just getting them to know you.

Robert: Yeah. And they get it. They get it like a 20, 25 minute break. So feed them while you’re giving them a little pitch. There’s not a there’s not a huge cost in marketing in this segment. It’s more of a relationship built, and a lot of companies that are doing somewhere, say, between 3 and $5 million a year.

Robert: They have a liaison that goes to these different community events. And, you know, they’re the ones that are constantly the face. And these jobs typically are not, sold, if that makes sense. So what you do is you get a request for information and it’s like this customer needs a stairlift. This customer needs a ramp. You got to do the evaluation.

Robert: You submit the bid. Technically they say they require three bids, but the problem is they don’t have three companies that are qualified to do it, nor do they have the time to wait. So you have the time factor as well as the bidding factor. And typically most of the dealers that I have, there are one and done bid because they’ve been doing it, they’ve gotten into it.

Robert: And the case manager knows that they’re not going to have a problem with it. So very low acquisition to get into this. But there is a lot of, time far as from the time of learning what the process is, the paperwork, learning the case manager. But then once you’re into the system, then it’s just like clockwork.

Victoria: So, you know, when I’m thinking about diversification, a new division. So there’s a lot of what you’re saying makes a lot of sense. But I think of okay, so let’s say somebody starts a handyman division. They drive their future, right? They drive their destiny. So if they want to do a lot of handyman work and they hired three people for that division, there’s market like crazy.

Victoria: And they get in the work in this. What if they have they build up to have capacity to do this. But there’s no real way to judge the pipeline or the flow of work, is there?

Robert: Yeah there is. So so we only talking about the, you know, the TPA side, third party administration, that’s what’s funding all this. Okay, the flip side of this, which I was going to get to is the retail side. So there’s a lot of individuals. Again, they fall. They have a medium income of $200,000 a year. The insurance is like we’re not covering this.

Robert: You need to figure this out. Well who do they call.

Victoria: Yeah okay.

Robert: So the retail side has really grown. So we’re we we used to see at 80, 2,080% through third party administrators 20% retail. Now we’re starting to see it kind of almost at the 5050 mark where the retail is getting just as heavy as the, you know, the third party administrators. So guys that have showrooms, like we have one in canton, the guy opened up his showroom.

Robert: He used to be 80% funded, 20% retail. Now he’s actually opposite now he’s 80% retail, 20% funded. Because the showroom has been able to drive so much more business because people can see and touch and understand. And again, we’re not even talking disabilities, just aging in place. What can I do, you know, different style cabinets or I know because I have a degenerative disease in ten years I’m going to have a problem.

Victoria: Yeah. Right.

Robert: This way they can make different changes in their home that are beautiful. They can see it. And that because they actually set up a showroom where it’s an actual inside of a home, everything’s designed as the house is. So you’re not walking into this big like a La-Z-Boy showroom looking at 100 different chairs. You’re walking into something that’s built as a mock house so you can actually represent what you’re looking for in your own home.

Victoria: Is there anything in your mind that is particularly difficult to learn about the installation of, or the management of a lot of these mass occasions? I mean, the door, the door widening is not a big deal, but what about the stair lifts and things like that? Some of it tricky, some of it hard to learn.

Robert: So, stair lifts and elevators across the country, there’s different rules in every state. So they also have what’s called a VPL vertical platform lift, which is a mini elevator. So an elevator has all the bells and whistles, the nice doors, vertical platform lift is literally that. It’s just this little platform that has walls on it that lifts you between stories.

Robert: So hence the price of an elevator. Some states allow you to install that with just, you know, going to get a permit. Other states, you have to have a, you know, a license for it. Stair lifts are kind of in a gray area. Some, some states require you to have an elevator license. Other states. No, some states don’t even require you to ask for a permit, which is strange.

Robert: But the cool thing is, the manufacturers all will spend a lot of time with educating these guys, training them on how to do the installations, and do this. We have I have one company out of Philadelphia. He has 1500 stair lifts, and he just started a couple of years ago on rent. It’s an entire rental business. So there’s different touch points.

Robert: To which I mean, we probably don’t have time to get into all that, but the logistics of this side of the business is a little bit different because again, as I mentioned, it’s a lot of it’s reactionary. And on my mom’s coming home, I need a ramp right away. So can you get a ramp over to them. Do you sell it.

Robert: Do you rent it. Stair lifts. Normally you have a little bit more time because you have to order the product. You gotta make sure that it fits the stairs. So not as cumbersome. But the wet space is a huge thing. And let’s really need is, like, the one day bath style, which is what best best promotes.

Robert: You can literally be in and out of just the wet space spot in a day. To be able to help that individual, to be able to be bathed. And typically it may be by a caregiver, because if I fallen, you know, I broke my hip, broke my leg, but I need a little bit of additional assistance so that I can get cleaned.

Victoria: Yes. Yeah, that sounds like an awesome opportunity. And you told me a little bit before about some of the other organizations which are diving into this segment, and it sounds like it’s starting to catch on among all types of companies.

Robert: It is. It is the. Yeah. So like, lease was one that we mentioned, you know, the lease gutter guard, you know, and then they started lease home improvement. Best Buy tried a sample of trying to sell a stairlift. So, I mean, you have these larger organizations to go, and I see a market, I see something that needs taps.

Robert: But the challenge is, is the intimacy part. So, like, Home Depot didn’t do very well. Lowe’s is still struggling. And it’s because they have a high turnover, the people that are working in these departments. So if we have these professional remodelers that have their own staff that can be trained on the intimacy side of this thing because it’s all about relationships, somebody, you know, getting into the right to make these changes and, yeah, there’s just a huge opportunity for it.

Victoria: Now, here’s one of the other things I think about when you’re talking about this program, and that is how do the contractors get paid? And do they have to wait for a long time? Is it something that they have to fund themselves and get reimbursed?

Robert: So any of the programs that are funding, you know, the project under 15,000, they pay in 30 days? Okay. That’s it for most companies. It’s not a problem.

Victoria: Yeah.

Robert: Excuse me. The VA, that’s a little bit of a different thing. But, you know, the VA business alone is $280 million. Just on the West Coast. And I think the East Coast was almost like $680 million of work that’s untapped. But the VA’s a little bit different. It’s a little bit of higher touch points. And you has to fund the project $170,000 until it’s done.

Victoria: Okay.

Robert: Yeah. But you build that into your margins. You already know that you’re going to be financing it. So you build that into there. But again, very, very good work. You know, the cash side, obviously, you know, either financing or, you know, just hard cash. It pays for it. Workers comp. If you get into the worker’s comp side, typically they’ll give you somewhere, between two draws or 50% down.

Robert: And then the balance when you finish it. Okay. And the majority of all the organization will pay under 60 days, most or 30. There are some of the some of the, you know, smaller, you know, agencies they’re a little bit more strapped and it takes a little bit longer. But it is it’s guaranteed money.

Victoria: That’s really interesting. Thank you for sharing all that. I am sure that a lot of folks were unaware and now might be looking at, whole new business, the whole new revenue stream.

Robert: That’s awesome. It’s a nice add on for companies that have, you know, 3 to 5 guys are in our growing. And it’s a segment that’s not going away.

Victoria: Right? Yeah. With the way that everybody’s getting older now. There is that Grace number you were talking about. So that business is going to climb and climb and climb in the foreseeable future. Right.

Robert: Like, have you heard about granny pods?

Victoria: Yes.

Robert: You know.

Victoria: They eat, adu type.

Robert: The juice. Yep. You know, and that’s growing, you know, it came out 20 years ago, but it just wasn’t as popular now. But the education is getting stronger now. That’s why more people are getting involved in this. Because you have the education. You have the understanding. So the opportunity for our guys to be able to do this is it’s it’s a greater, greater opportunity.

Victoria: Well, Robert, you know, what’s a really good add on to PowerTips on scripted podcasts is, the lightning round. Are you ready for the lightning round or.

Robert: Shoot.

Victoria: All right. You ready to shoot? 60s. Let’s put that on the clock. What is your favorite business book and why?

Robert: Blue Waters by Rick Walters. Because it talks about that. There’s opportunities out there greater than what we can see.

Victoria: Okay, great. And how well does that fit into this conversation. Right. Yes. You know, if you weren’t a regional program manager for best bass, what do you think you’d be doing?

Robert: I would still be in the home modifications industry one way or another. Yeah. I have my own consulting business for the last 30 years that, I’m very specific in this industry, so I would still be here.

Victoria: All right. Very interesting. What are you not very good at?

Robert: You know what? I don’t, but I’ve been in the trades my entire life. I cannot lay a brick to be level to save my life, and that bothers the crap out of me. I think I do tiled. Yeah, I can do tile and do crown molding, but I cannot lay brick to save my life.

Victoria: Okay, good to know. Your room, your desk or your car? Which do you clean first?

Robert: My desk.

Victoria: Okay, great. Me too. Now, what do you think is the greatest invention ever?

Robert: Whiskey makes everything better.

Victoria: Very true, very true. What? Do you play games on your phone?

Robert: No, I do not know.

Victoria: Okay, great. How many pancakes do you eat in a year?

Robert: Not very many. Maybe five. And that’s when I’m playing with my grandkids.

Victoria: All right. Great cats or dogs?

Robert: Both. I have, two cats. One’s 21 pounds. 117 pounds. And I have a little red pity that enjoys them. So I gotta. I got a little zoo over here with all the grand babies.

Victoria: That’s great. Awesome. Thank you very much. I was really good. Now, a couple of things before I let you go. If people want to learn more about home modifications or these programs, how to how to tap into them, or they want to learn more about best fast, how do they reach out to you? How do they contact you?

Robert: Two ways. One, I mean, my email is very simple. It’s Robert, the letter G at best bath.com. So real simple Robert G at best bath.com. And I give everybody my cell number (330) 620-6610. Again (330) 620-6610.

Victoria: All right. Great. Now last thing before I let you go is I’d like you to share your five words of wisdom with our listening audience and tell us why they resonate with you.

Robert: So been in the business development world for a long time. One of the things that I learned that a lot of companies have a challenge with, with trying to grow, is trying to keep pride out and higher up. So those are my five words that I use. Keep pride out and higher up. You know, don’t worry about someone’s going to be smarter than you.

Robert: You want them to be smarter than you. And the reason we’re hiring up is we’re trying to build a business. I know I’m not good at everything. Like with my construction business I used to have. I hired a mason because I could not lay brick to save my life, you know? So I’m hiring. I’m hiring somebody that’s good at what they do.

Robert: And sometimes people think that they has to be the end all for everybody. And we’re not. Our jobs as business owners are more orchestra players than anything. You know, we’re the leader. We’re saying, okay, you do this, you do this because you’re good at what you do, and I’m glad you’re better than me. Yeah. And that’s where my five words come from.

Victoria: All right. Well, that was perfect. Well, this is very interesting. Thank you so much for sharing. And, you know, spending your time with us today. It was fantastic. And I look forward to seeing you at next year’s summit just outside of Denver. Right.

Robert: Sounds great. Sounds great. Thank you Victoria appreciate.

Victoria: Thank you.