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7 Tips to Lower Remodeling Costs

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7 Tips to Lower Remodeling Costs

As material and labor prices spiral out of control, many homeowners are putting the brakes on remodeling projects. Use these guidelines to bring down costs. 

By Mark Richardson November 17, 2023
Remodeled kitchen
Not long ago, you could complete a kitchen for $100,000, but now for many remodelers, a $300,000 kitchen project has become the norm. | Photo: stock.adobe.com
This article first appeared in the November/December 2023 issue of Pro Remodeler.

It’s tough out there. On top of competing with all of the other priorities in homeowners’ lives, we’ve seen an unprecedented level of remodeling cost escalation over the last few years.

Not long ago, you could complete a kitchen or bathroom project for $100,000, then it inched up to $150,000 and now for many remodelers, a $200,000 to $300,000 kitchen project has become the norm. The rubber band has snapped for a growing number of consumers. They just cannot or will not spend that much.

Remodelers are losing projects and seeing more clients just go dark. Many of these homeowners might have multiple excuses for not proceeding, however, I would argue at least 80% of the time it is cost escalation. I think you need to say (as in the 1976 movie “Network”) “I’m mad as hell and I’m not going to take this anymore.”

You need stop being reactive and become proactive in driving down the cost of a remodeling project. You need to fight for your clients.

Below are some ideas for this process. For a deeper dive into each one, listen to my podcast, “Remodeling Mastery with Mark Richardson.”


1. Make It A Team Sport

Bring together multiple voices in your company (production, design, sales, etc.) and lay out the challenge: ”We need to get remodeling costs down!”

Begin with a goal of 10% cost reduction. You will find this not only possible but also conservative. The solutions will be easier to find using synergistic interactions.


2. Share The Vision with Trade Partners

Ask them for ways and share ideas. Make them aware of the percentage of jobs they get (from visits to contract) and compare it to your close rate. Let them know that moving forward you will bring additional subs into in their category.

I know you’re busy, but make it a policy to get two or three bids in each major category. This may ruffle a few feathers, but you will bring costs down 5% or more.


3. Production Proven

Try to specify more “production proven” products and details on your jobs. This means options familiar to your production team. There will be less mistakes and therefore less cost. This is also true for products installed by mechanical trades.

For example, if you specify a toilet that the plumber commonly installs they will be able to do it faster and should save money.


4. Improve Your Buying Power and Discounting

This can be done in many product categories, but cabinets are a popular example where discounting can be 50% greater if you change the buying relationship. Just ask. Consider joining a buying group. In the face of continuing price escalation, remodelers need to stop being reactive and become proactive in driving down project costs for homeowners.


5. Consider Outsourcing

Many top remodeling companies are reducing costs by outsourcing CAD or other services to other countries. Rather than just experimenting, ask friends in your peer groups and associations for referrals to specific relationships. Leveraging talent from South America, Asia, or Africa can save 50% or more.


6. Selling Down

Data shows post-COVID consumers really want to complete their projects and are willing to compromise on their fantasy.

Make this theme a discussion both internally and with clients. By specifying a builder grade window vs. the top brand that you automatically go to, you will save thousands of dollars that could be the difference of a prospect moving forward or not.

The key here is to be proactive early in the process as opposed to reacting when the project is over budget.


7. Training is Key

Adjust the mindset with your team. You need to communicate and give the sales and production teams the skills to think and act to move the needle on this topic. Celebrate cost reduction ideas.

This training needs to be both at a high level on “why” this is important and into the weeds on specific projects and situations. It will become contagious after a few team members begin to see the outcome of these ideas.


So, what have we accomplished?

If before this, we had a $200,000 cost and a $300,000 sales price (mark ups vary greatly) and with the above strategies, we were to get the cost down to $170,000 (15% lower) then the sale price can move to $255,000, and you can not have the client walk away.

You are maintaining or improving gross margin. If you can get just one more project out of ten, then you have increased your close rate (from 20% to 30%).

Don’t be the victim, get out there and make this happen.


written by

Mark Richardson


Mark Richardson, CR, is an author, columnist, and business growth strategist. He authored the best-selling book, How Fit Is Your Business? as well as his latest book, Fit to Grow. He can be reached at mrichardson@mgrichardson.com or 301.275.0208.

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