The message from the CEO Summit stage was direct, and it wasn’t comfortable: if you’re a lumber and building materials dealer operating as a “box in, box out” or “lumber unit in, lumber out” supplier with no differentiated value proposition, your margins are shrinking and your options are narrowing. The good news? Two operators who have been through the fire of building installation businesses from scratch came to share exactly how they did it and what it cost them when they got it wrong.

Ben Rosen, fourth-generation president and CEO of Norfolk Companies in Boston a 93-year-old business that began as a Home Center Hardware Store and Mac Hines, former CEO and Consultant in specialty products install serving the multifamily construction; together they delivered one of the most practical and candid sessions of the Summit. Their subject: why installation is no longer a value-add but a strategic necessity, and why there is no middle ground between doing it right and not doing it at all.

The Numbers Don’t Lie

Mac Hines opened with the financials, because that’s where the conversation must start. When he arrived, the company was generating $15 million revenue, generating a 5% profit. Installation represented just 10% of their work. Within 5 year the revenue had grown to over $25 million, and profits had tripled, as cash. Installation now represents 75% of the total revenue.

We had the commitment of ownership, which was great because there were setbacks, lots of them” Hines said without hesitation. But the trajectory was undeniable, and the strategic logic behind it was sound. When you control installation, you control scheduling, quality, client relationships, and critically your own growth ceiling.

Ben Rosen’s Norfolk Companies followed a similar arc. Starting with basic apartment cabinet sets in the early 1980s, the company expanded incrementally by simply listening to customers. When clients asked if Norfolk could handle tile, plumbing, and electrical alongside cabinets, the answer eventually became yes. Today, Norfolk operates six kitchen and bath showrooms across Massachusetts and runs a full construction division with project managers, assistant project managers, and W2 installers – supported by BuilderTrend as their operational platform.

The Word “Construction” Is Not an Accident

Here is where Ben Rosen made one of the sharpest strategic distinctions of the entire presentation. Norfolk Companies doesn’t call it an “installation division.” They call it the Construction Division and the language is intentional.

“When we were just installing cabinets, we actually called it ‘hang only,'” Rosen explained. Over time, the team recognized that framing wasn’t giving the work, or the people doing it, the respect and complexity it deserved. Renaming it the Construction Division changed how the company talked about it internally, how it was marketed externally, and how customers perceived the value they were receiving. All of Norfolk’s construction staff carry their CSL licenses. They are committed, credentialed professionals, not an afterthought bolted onto a materials business.

That distinction matters more than dealers might expect. It signals to customers, to the market, and to your own team that you are a builder, not a supplier who occasionally hangs something.

Charge Enough. Or Don’t Do It.

Both presenters returned repeatedly to the same uncomfortable truth: the fastest path to losing money in installation is underpricing the work because you’re afraid to lose the bid. Norfolk’s construction division was losing money before Rosen made a decision that required real courage, raising labor margins to a 40% gross margin target, matching the 40% gross margin target on materials.

“We had two paths,” Rosen said. “Raise the prices and see if it works or find something else to do.” They raised prices. They didn’t lose customers. Their close ratios held steady, and in some cases improved, because the qualification process for leads sharpened alongside the pricing discipline. The lesson: dealers who are afraid to charge what the work actually costs aren’t protecting the business, they’re slowly destroying it.

Hines framed it bluntly: “Installations are a 40% margin business. It’s going to cost you 25 cents on the dollar to run it, and you hope to make 15. The path of zero probability is dabbling in it, making 25%, and having it cost you 30.”

Your Best Installers Won’t Be Around Forever

There was another factor driving Norfolk’s move to in-house installation that doesn’t get talked about enough in this industry and Ben Rosen was candid about it. When Norfolk analyzed their contractor base, they found a troubling pattern. Many of the independent installers they had relied on for years were aging, with no succession plan and no one coming up behind them. “They might go, they might not be here tomorrow,” Rosen said plainly.

The problem wasn’t just theoretical. Even the contractors still actively working were becoming a bottleneck, too slow, too limited in capacity to keep pace with the volume of work Norfolk needed to move. Customer schedules were slipping. Revenue was being left on the table. Norfolk’s growth was effectively being held hostage by someone else’s retirement timeline.

It’s a quiet crisis playing out across the LBM industry right now. Dealers who built their business model around a network of trusted independent installers are discovering that network is graying out with no replacement generation waiting in the wings. The dealers who recognize that vulnerability now and build their own labor infrastructure before they’re forced to, will be in a far stronger position than those who scramble when their last reliable installer hangs up his tool belt for good.

Why the Market Is Pushing This Direction

General contractors today are managing 20 trusted trade relationships, not 200. They want partners who can deliver a complete scope, design, supply, and installation under one accountable roof. Builders facing affordability pressure are pushing for supply chain efficiency and turnkey solutions. Homeowners remodeling their kitchens want a single point of contact from concept to completion.

The dealers who will thrive in a flat to declining new construction market are those who move up the value chain and own a greater share of the project. That means controlling labor. In a market where skilled job-site labor is the scarcest resource in the industry, the dealer who controls quality installation crews doesn’t just have a competitive advantage, they have dug a moat, filled it, and lit the water on fire. No price war, no national consolidator, no private equity roll up, no big box retailer can drain.

Ben Rosen and Norfolk Companies didn’t dabble their way to 93 years of success. They listened to their customers, built the infrastructure to deliver, priced the work correctly, and committed both feet. For LBM dealers watching their box-out margins compress, the message from the CEO Summit stage was clear: the construction business is calling. The only question is whether you answer it with conviction or not at all.

Ben Rosen and Matt Hines didn’t build successful construction divisions by accident. They built them with the right people, operators who understood risk mitigation, project management, WIP accounting, and how to price labor for real margin. Those leaders exist in this industry. Misura Group knows who they are.

If your next competitive move is installation, your next call should be to the Misura Group Team.

Hire Smarter™

Tony Misura

If you’re ready to elevate your hiring strategy, let’s have a conversation.

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At Misura Group, we help lumber and building materials companies identify, assess, and secure proven leaders who drive measurable growth. We evaluate the whole person – track record, adaptability, leadership capability, and performance under pressure – not just a behavioral profile.