Home-repair network grows
By Pervaiz Shallani
College friends find a niche with referral service
For two guys from Northern Illinois University, paths that started after school with a painting business and a stint as an insurance agent have led to a small office, a bank of phones and a growing business of connecting homeowners with home-repair contractors.
One of them, Pete Thomas, had heard customers complain about dependability, reliability and availability while running a home painting franchise during college and then while working for the franchiser for three years after his graduation.
"From going out and giving estimates, it was amazing how many people felt they couldn't find someone to do this or that," said the 28-year-old Thomas.
Thomas saw a need for a referral service that would be free to homeowners and seek to calm their fears of finding a trustworthy contractor with the time to work on their homes.
"I had people tell me that, "You're the only contractor I called who came out on time and the only one that was available to work. I'm going to go with you," he said. "I saw a need for a service like this."
The Vernon Hills native started brainstorming the idea in October 1998, spending the next three months setting up a Web site and recruiting contractors in Lake County, where he launched Home Improvement Network.
By February 1999 he had 25 contractors on board, an office manager to help with day-to-day duties and a part-time staff blanketing neighborhoods with fliers. The company began fielding calls and e-mails.
"By the end of April 1999, I was pretty confident" the business was going to succeed, said Thomas. By the end of the firm's first year, watched monthly call volume double and expanded into DuPage and Cook Counties.
"The business was turning a profit, and the business was growing," he said. As it approaches its third anniversary, Home Improvement Network has outgrown its small room on the top floor of a converted house; it will be moving in the coming weeks to an office complex a few blocks away in Mundelein.
The company has expanded to nearly 120 contractors and reaches north into Wisconsin, east into Indiana, south to Joliet and west to Dekalb. "Revenues this year have exceeded the amount of revenues for the first 2 years and joined the company in September 2000.
"There is no company in Chicago that has our scope," said Boe, who has a background in dealing with homeowners and contractors as a former agent for Allstate Insurance. "There are other referral services out there that are national. They are more computer-oriented, dot-coms, if you will." Thomas, Boe and Felice Boisselier, the office manager, direct the business.
Customers call the company giving their name, address, phone number and details of their problems. They are given the name of three contractors, whom Home Improvement Network contacts for them. The contractors then call the homeowners to arrange for estimates.
Gene Luo of A-1 Quality Painting in Palatine said he has worked with the company for more than two years. From the beginning, he said, it sounded like a good deal.
Home Improvement Network is "responsible for the marketing; I'm responsible for the work," said Luo, who estimates that 20 percent of his business from the network.
Home Improvement Network is not a middleman between contractors and homeowners, taking a percentage of each job, Boe said. Instead, contractors are interviewed, screened and sign a six-month contract with the company, paying a $300 deposit and agreeing to service 10 leads a month if the company can provide them. The contractor pays for each lead: $30 for a large project, $15 for a smaller one.
"Basically, we like to establish that these are companies that didn't just throw a magnetic sign on the side of the truck and now they are contractors coming into an area," Boe said. "It's just another way for a homeowner to feel that much better about having a contractor come out."
But even with the screening process, Home Improvement Network has had its share of problems. "We have kicked some people off," Thomas acknowledged. "We consistently talk with different homeowners and talk to them about the work and service they received. I tell homeowners, "We are not perfect, but you are going to have a lot less risk."