We have increase sales every year up to and including this year.
Janeen S. Welsh, CKBR, CAPS
Welsh Construction, Inc
1. The remodeling industry has changed over the past several years, but not nearly to the extent of new construction. Because remodeling is basically a constant, in that even during tough economic times home owners feel committed to keeping up the value of what they already own, we did not have the instant shut down that new construction contractors faced. What has changed in the industry is that home owners are being more cautious about what they spend on a home which they do not intend to keep for the long haul. What has not changed is that, when remodeling, a buyer still wants a contractor who offers value and owners are making their decision to buy based on a total package and not just price. We have not lowered our prices once, ever, and we have been in business since 1993. Although our projects have decreased in size, our closure ratio has not changed. We’re spending more on marketing to create more volume and that solution seems to be working well for the most part. I do think that this is a cyclical adjustment, albeit a more serious one, because the industry could of course not sustain the high at which it had peaked. Regarding the future, I think there is going to be a substantial boost in business when the economy settles down a bit due to pent up demand. Those who have been sitting tight over the last five to eight years will be seeking out the services of those contractors that have been able to withstand the economic drought. I think the future is bright and those long neglected projects will soon be receiving our tender care.
2. I think the remodelers who have thrived have been the ones who responded early to the market change and have made adjustments accordingly. We took the advice from trade journals and beefed up our marketing even though it was daunting to spend the cash. Although we made some changes to tighten overhead, we really didn’t make substantial changes to our budget. We kept in close contact with our past clients and that proved to be very profitable. They already understood the value of our services and were staples in our financial diet. As soon as we realized that the larger size projects; additions, whole house remodels, high end kitchens, etc. were not moving forward to contract, we switched our marketing focus to kitchen and bath upgrades, handyman services and even a long term home maintenance plan we developed for attending to items in the home which needed annual inspection and servicing. Our clients really responded well to this focus on helping them maintain and protect the integrity of their home without having to commit to a large investment at this time. We know that when they feel more confident about spending money, they will remember the small services we provided and will call on our company.
3. I think the most significant change in the market is that home owners are leery of over investing in their homes. If they are planning to remodel for their own desires and are planning to remain in their homes they are more likely to sign on the dotted line. If however, they have to keep resale in mind they are gun shy. Market value declines have really taken their toll on available equity for remodeling and on what one can invest in a home at this time. Customers are being very cautious about adding construction costs to their mortgage in fear of taking a hit.
4. One might expect to hear that we cut prices or laid off personnel, but in fact we were able to turn this new climate into an opportunity to expend our energies into fine tuning our operational systems.
5. We’ve been updating our estimating data base, re-writing procedures manuals, evaluating job descriptions. Soon we plan to have a meeting with our key employees to share and discuss DISC test results that they will each be taking within the next month. Our clients have had the benefit of the extra attention and one on one time that we can spend with them as we attend to their home maintenance needs and have really expressed gratitude that we were willing to handle the little things with which they needed help.