President, Normandy Remodeling
Hinsdale, Ill.
Growth
We’re projecting about the same sales volume as 2022, so flat. We’re also predicting continued supply chain issues and inflation. We’ve struggled with our gross profit and I think that’s still going to be difficult.
Sales
We have a big backlog, so we’ll be busy in production, but I think it will still be difficult because of the supply chain. From a profit standpoint, it’ll be stressed because of inflation.
Interest rates are going to put people on edge, but I don’t see a crash in leads, like in 2008. People are taking more time to decide, and maybe putting it off to see what happens.
Marketing
We stalled our marketing efforts in 2021 and 2022 because we had so many appointments. So we’ve started marketing again and doing workshops, which we haven’t done in almost two years.
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Projects
Job size will probably go down. We get a lot of large additions and clients will take out construction loans and combine them with a new mortgage. With today’s rates, I don’t see people doing that.
But it also might have the effect of a more interior remodeling where people say, “Okay, I’ve got this low interest rate locked in, I’m not going to move, so we’ll just stay here and spend money on the house.” I’m thinking our mix will become a little more geared to interior remodeling and a little smaller. So instead of doing the whole first floor, they might just do the kitchen.
Always stay leveraged ahead of your customers. Don’t stretch yourself out too far waiting on product and not having enough money from the client.
Advice
Cash is king. Be vigilant with your projects to make sure you don’t lose money to interest rates or inflation. Always stay leveraged ahead of your customers. Don’t stretch yourself out too far waiting on product and not having enough money from the client.
We’re watching the dollars really closely right now because you don’t know what’s coming around the corner. I think marketing and selling are going go back to “normal” whereas for the last couple of years it was a seller’s market and people were clamoring to buy. Now we have to retrain ourselves back to how it was pre-pandemic, where you have to go through more of the sales process that maybe we bypassed in the last couple of years.
Read all 2023 Thought Leader predictions and game plans here
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