The past four years have been a struggle for many remodelers. While the Washington, D.C.-based Bureau of Labor Statistics reports the national unemployment rate at 8.1 percent, the residential construction industry is probably closer to 50 percent, says Rosie Romero, a facilitator for the Washington-based Remodelers Advantage Roundtables, a peer group that provides remodeling company business owners with support in a noncompetitive environment. He and Judith Miller, another facilitator, spoke to Qualified Remodeler about what challenges remodelers still face and why having a support system, like Remodelers Advantage, is invaluable.
QR: Based on what you’re hearing at your Roundtables meetings, how’s business for remodelers these days?
Romero: My most recent meeting was about six weeks ago in Boulder [Colo.], and a contractor from Charleston [S.C.] told me he has had more leads in the first four months of this year than he had all of last year. Meanwhile, members from Toronto said business has never slowed down for them. I think business is very spotty, but there seems to be less of a dark cloud over everybody’s heads.
Miller: I recently was in Michigan at a wonderful company where the owner said something similar to your guy from Charleston: “I’ve never had more leads in the past six years than I had in the past quarter.” But he lost three jobs in the last two weeks because of a combination of occurrences that are happening to people all over the country. One person got an appraisal back, and it was $50,000 less than he anticipated; the second person was transferred for his job; and the third person got cancer. So this remodeler lost $1.2 million out of his pipeline in two weeks. I’m hearing these types of things more than I’ve heard them in the past.
QR: These are unexpected challenges. How can a peer group mentor a remodeler through situations like that?
Romero: This is when Roundtables is a great advantage; if you’re sharing this type of information, there are maybe two or three companies in the room that have experienced the same thing. They can help you get over it and get focused. This is your board of directors. If you use Roundtables appropriately, you’re not alone anymore. You don’t have to reinvent the wheel, and you can pick and choose amongst the people in the group you’d most like to emulate.
QR: What would you say are the biggest issues facing remodelers today?
Miller: The past four years, regardless of your attitude or expertise, have been a shock to the system of most remodelers I know. The remodelers who remain are still being challenged, and the more mature the company the greater the challenge. A lot of younger contractors are coming into Remodelers Advantage and they don’t have the overhead, they’re not putting their kids through college, and they don’t have the need for the salaries the more mature contractors do.
Romero: I saw the turndowns in ’78, ’83, ’89, ’96 and 2002, and what hurt about this one is there were great remodelers who really were fundamentally sound businesspeople who held on to employees whom they had so much invested in, thinking, “It can’t last much longer; I’ve spent my profit and loss statement and my liquidity.” Many of them kept going and they knew what they were doing because we had spent 15 years educating them about how to manage their finances and line up their lines of credit, which all got called on them. All the new bank regulations that dropped all of our lines of credit cut us off at the heels.
The young companies, like Judith is talking about, come in and they’re flexible. They’re hearing other people’s survival strategies, and they don’t have the 10 or 15 years of doing it the same way that they completely have to rethink to survive. That’s the value of being a Roundtables member the past three or four years: You were flooded with survival ideas, and you could pick and choose which ones you were going to use.