Adapting to the New Economy

The economy has shifted. We can only guess if and when it will return to its former robust self. Most remodelers with project-driven business models are struggling because homes are not going up in value and the real-estate market is stagnant, which has made homeowners much more cautious. Simply put, they are not calling about projects they had once planned to do.

In the past four years, we have gone from a marketplace where there was more demand than supply (sales came easily) to an economy where there is more supply than demand (sales are difficult). Remodeling contractors are competing with home builders who now call themselves remodelers, along with desperate contractors willing to work for wages just to pay their bills. It’s a tough market, and complaining about it doesn’t accomplish much. What’s the answer? When there is a dramatic shift in the market like this, you must amend your business model.

Mark Richardson and the Case Institute of Remodeling have created an online program titled “Positioning for the Future.” In the nine-part video series, Richardson makes the case that you must take an offensive stance in guiding your company in these uncertain times. Here are three key points:

  • You must control your destiny and not let the environment control you.
  • You must embrace change as part of your business culture.
  • You must position your product offering(s) to meet diverse economic conditions.

We all know the construction industry has changed dramatically. Proactive remodeling contractors are responding. They are finding new ways to grow their businesses by offering services that homeowners need and want. Consider the following:

  • Homeowners still own their homes.
  • All of these homes have ongoing service and repair issues.
  • If homeowners plan to stay in their homes for the next five to 10 years, what improvements make financial sense?
  • Can you help them with that assessment?

What can you do? Adopt a proactive customer-management strategy and help them manage their largest asset. Change your business model from a project-driven model to a relationship-driven service model. Work with homeowners to jointly develop a three- to five-year plan for their homes and provide your clients with an annual home checkup. Start with a whole-house inventory, highlighting any needed service, repair or replacement items. Expand your company offerings and provide a continuum of additional home-related services. Create cooperative relationships with your trade contractors and build your network to assist homeowners with finding the professional help they need for every home-related concern. By initiating calls with past customers, you move clients from a reactive business relationship (they call, we come) into a proactive plan (we call, we come) that identifies work as far out as five years. This business model creates an ongoing, collaborative dialogue with your clients.

‘Just Come Do It’ Clients

You may have several past clients now who call you for any home-related concern they have. This relationship is so strong that “just come do it” clients don’t worry about pricing. Build a stable of “just come do it” clients and permeate that mentality into a much larger portion of your client base. This is the business model for the new economy. Stop looking for your next project. Proactively manage your client relationships, and the business will follow.

There are many tools available to assist you with this shift. To view “Positioning for the Future,” visit CaseInstituteofRemodeling.com. If you would like to receive a sample home-inventory form and understand more about the annual home checkup, contact me, and I will send the sample home inventory to you at no cost. To better assist you with estimating a wider variety of projects, consider a professional estimating program database containing more than 15,000 items. Hometech Publishing will give Qualified Remodeler readers a 14-day free trial of its HomeTech Advantage Estimating Software. To find out more, go to HometechPublishing.com/QR.

It’s a tough market, but there is opportunity. Respond to the challenge. Adapt to this new economy. The customers are waiting.

Loading