In late January 2012, the National Association of Home Builders' Remodeling Market Index hit its highest level in five years. “It's not that remodeling is moving into boom territory,” said David Crowe, chief economist of the association, “but rather that for many consumers, fixing up their house now fits their sentiments—and their finances—far better than selling or buying.” I have found the consensus among remodelers is homeowners feel they won’t be moving anytime soon because if they do they won’t be able to sell their house for what they believe it is worth. Clients are opting instead to do something they themselves will enjoy or benefit from.
With the wealth of information available via the Internet and other sources, homeowners are much more judicious about how they spend their money; they've gotten smarter and more analytical about what they want. The evolution of the building industry has always been driven by consumer needs and demands; therefore, adaptation of services, business models and focused marketing are a necessity to maintain and grow your company.
As a whole, our culture is ever-changing. The values that inspire a lifestyle are a reflection of the times we live in. The population, environment and economy are just a few of the catalysts that impact our clients and therefore the industry services and products we offer.
For example, the NAHB Certified Aging-in-Place Specialist (CAPS) designation was developed in response to the dramatic increase in the number of consumers over the age of 50 seeking to remain in their homes and remodel rather than look for assisted living or other arrangements. In addition, with rising energy costs and the increasing number of government mandates affecting home values, more of us are obtaining the NAHB Certified Green Professional (CGP) designation to demonstrate to consumers our commitment to staying current with industry innovations.
Business Model Revisions
The essence of a business model is that it defines what customers want, how they want it and how an enterprise can organize to best meet those needs, get paid for doing so and make a profit. The building industry will always be about building, but transformations within the industry are inevitable.
At one time, it was simply about construction, and any “Chuck-in-a-truck” could do the job. Now, building has become a science, and only the most diligent businesses successfully navigate the changes. When I started my company, it was set up for custom home building; it then evolved into mostly a remodeling company because that was the consumer need. Now, as many remodelers have, I added design/build to my services because clients want the process of their project to be easier and faster—a one-stop-shop experience.
As difficult as it is sometimes, the ability to adapt to the challenges confronting the remodeling industry is an opportunity to improve and mature as a company. Your business plan is the foundation you build upon.
Marketing is the framework that gets potential clients through the door. In the past, a direct-mail piece and a Yellow Pages listing were enough to keep the phones ringing. Conversely, in today’s highly connected world, companies must have a focused marketing campaign to gain consumer interest. Until recently, marketing was an afterthought for many of us. In the present economy with fewer clients and more competition, we have to be more concentrated with our efforts to capture market share.
It is essential to outline a budget and determine your target market. Defining a target customer base and tailoring marketing efforts to reach them increases your cost efficiency. Websites, direct mail, email campaigns, videos, brochures, articles and blogs should be part of an approach to attract and capitalize on available leads. Marketing is a strategy of momentum and flow. We build marketing assets with an ongoing program, not a one-shot deal. Marketing a company is no longer an option; it has become an absolute requirement to succeed.
Remodeling is a profession and owning a business is a career; both take skill. However, owning a business requires a great deal more skill. I have learned a career is a lifetime journey of building and using your talents, knowledge and experiences in the continuous process of business development. Anticipating future changes, redefining your business plan and making a commitment to superior client services is the recipe that will one day make you a seasoned veteran in an industry that is always changing.