2. We thought this was due to the underlying need for homes to be improved as they were reaching a critical point in their life cycle. This comes about no matter what the economy is doing. If you are a well-established company in your area then the people will come to you as they trust you have their best interests in mind. Never every stop your marketing and, if anything, kick it up a notch so you keep yourself noticed – in these down markets there are a lot more guys out there willing to work for less or work under the table and you need to place yourself in front of them.
3. The volatility of the world markets – this has a direct effect on my clients’ ability to spend. Clients are also very apprehensive about spending while there is so much uncertainty.
4. We invested in buying and renovating our own office space. Our thoughts were that we needed not only a better working environment but a good place to bring clients and show off what we can do. We wanted to place ourselves at the head of the pack in relation to our competition. The downside to this decision is that it took out cash flow from the company when the market went sideways – thus increasing our dependence on the bank.
5. The only opportunities that we have had are not related to the market at all – with the slow down we have been working on our systems and fine tuning some of the data entry and analysis. We have seen that the job sizes have shrunk considerably from our “normal” averages. This has caused us to look at the smaller jobs closer – although we have not made the plunge into that market as we believe it doesn’t suit our model. This may change, however, if the market doesn’t pick up for us sometime very soon.
6. We are a bigger more streamlined company. We are also more keenly aware of our changing clientele – they are generally a lot better educated about the process and what they want from their contractor – this puts added pressure on the team to make sure all the bases are covered at all times. Even with this heightened awareness we still have the day to day issues that arise with clients that need special attention. The more things change the more they are the same!
Vineyard Homes LLC, dba Vineyard Services
1. I believe the remodeling business has changed dramatically in the past several years. With the dramatic flow of REO Properties and Short Sales in the market, the common theme on remodel work was all about simplicity, low cost, and not over-improving. Now that homeowners can see their equity beginning to return, the scopes of the jobs have become more substantial, and traditional work is happening again. The REO remodel work related to this boom will continue for us for the next 2-3 years, but we are forecasting a disproportionately larger amount of regular remodel work for private equity firms and homeowners who are trying to improve the value of these properties.
2. The market has been difficult, but the opportunity for remodeling has never been better. These remodelers have to have the mindset to deliver recurring results at high volume no matter what circumstances they face. Having the infrastructure to manage large amounts of volume allows for efficiencies to take place, and through this scale these remodelers can set themselves apart from the traditional remodeler. This infrastructure and employee overhead requires capital reserves and the management team that is experienced in dealing with tight timelines and clients who are demanding. If the staff can adjust and manage these variables, the remodel firm can be successful.
3. The most significant change in the market is the recent surfacing of many multi-billion private equity firms who have the capital and business acumen to buy large portfolios of homes and remodel them correctly so they can be put into rental portfolios or be flipped to owner-occupants. Our business has become the leading remodeler in this space with national operations in many states because we can deliver and manage construction on hundreds or thousands of properties for these clients each month. Adjusting to the demands of institutional clients is very different than servicing an individual home owner. We still do both types of work, but have different team members managing the communication to each client type, so that the expectations of each type of client is met and so we are successful in the end results.