Mel Rosenblatt, chairman of the board of Mid-South Building Supply, has held executive positions at home improvement manufacturing, distribution, and retail companies, and has expertise in company turnarounds.

REPLACEMENT CONTRACTOR: You've been in this industry a long time and have seen it evolve. What's different now about the customer, the companies, and the products?

Mel Rosenblatt: The customer is a lot more knowledgeable and more sophisticated. The companies last longer. And the products are substantially better.

RC: What's better about the products?

MR: Look at the replacement window. Today's replacement window will last longer than the original window in the house. It performs exceptionally well. It will make the customer's life more comfortable and more convenient. That's what we're selling.

RC: What about the people entering the industry, as business owners?

MR: Twenty or 30 years ago, they were salespeople primarily, and their methods of running the business came from that salesperson personality. Today I see a lot of highly educated people who understand commerce and what consumers need.

RC: What role will The Home Depot and Lowe's play in specialty contracting during the next five years?

MR: I think they're in it to stay. They will service a segment of the market. This market isn't served by just one group of companies. This is specialty selling, specialty replacement, and there are certain types of operations that fulfill certain types of customer needs. Right now, they're going through a learning curve.

RC: What are some things, typically, that you might expect to find wrong at a company that's not making money?

MR: The most prevalent mistakes involve companies not knowing their costs, and not knowing what gross profit and net profit they must have to operate their business. Many [of those I've been involved with] didn't understand the market they were trying to service, or tried to be too many things to too many people.

RC: What would be an example of that in the home improvement industry?

MR: It's difficult if you go in and sell 10 specialty products. It's more difficult still if you sell 10 products in four [geographical] areas. And more difficult still if you do all that and don't know your costs or gross and net profit.

RC: Many home improvement companies now offer 4 or 5 products, to cross-sell past customers and build their referral base.

MR: The companies that are set up properly, you'll find them in 3 specific products. The ones in 5, 6, or 10 products, I don't think you'll see them around after a while.