Editorial: This downturn is different
Professional Remodeler's Editorial Director Paul Deffenbaugh reflects on why this downturn's not as bad as others
This market downturn may be the worst I’ve seen in remodeling in 30 years. I won’t say it takes the crown, though. I know remodelers from New England who saw annual revenues in the early ’90s drop from $2 million to $300,000.
Why isn’t it as bad?
- Homeowners have much more knowledge of quality remodeling service and don’t buy only on price. That’s not entirely true, but it is a heck of a lot easier to compete against fly-by-nighters now than it was then. (Just ask some of the old-timers in your market.)
- More than ever remodeling is about market share. Your market might plunge, but if you’re a larger, more diversified remodeler, you will be able to pick up the slack in other services
- There are more remodelers offering diversified services in markets than ever before.
The biggest danger in this tough economic climate is to tightly niched remodelers. If your average job size was $300,000 in 2006 and your annual revenue was $2 million, you are probably seeing some tough times. The fuel that drove that economic pie — refinancing — has dried up, and the number of prospects taking on those large jobs has dwindled to only the highest income levels.
If you’re in that position, consider this:
- Expand your definition of a qualified lead significantly. Include job size, service request and geographic location.
- Change your business today — not tomorrow. You can do this quickly by partnering with other quality remodelers who complement your service. Or, you can hire the talent to make it happen now.
This downturn is not just about survival. It’s about thriving. There will be companies that thrive. It should be yours.
Contact me at email@example.com or 630/288-8190.