The remodeling market is still strong and all companies (even the biggest) have only a small fraction of the total remodeling market spend. While I am not an advocate of living in fear, I do believe you need to be smart if you want to remain strong and healthy in the future.
Following are seven suggestions for preparing for a softer market. See how you measure up with your preparedness.
1] Focus on the right clients for the right projects. Think of your client base and projects in the bull’s-eye of a target. What is the demographic of clients? What type of projects do you do best? What is your ideal project size? The more you can stay focused on your company’s sweet spot, the better you will fare in a softer market.
2] Increase marketing efforts. If your lead flow is softening, then you must think of marketing as a hedge or an investment, not an expense. It is important to spend not only more money on marketing, but also more of your energy and time. This could be done through client appreciation activities or community and business support.
3] Strengthen the team. In a tougher market you need a strong team with the right attitude. Training your people is an investment, not an expense. The team will be fearful if things get shaky, so devote time to assuring them of your efforts. Try to be transparent and ask for their support. This is also a time to weed out weak links and people who are distractions.
The more you can stay focused on your company’s sweet spot, the better you will fare in a softer market.
4] Diversify. If you’re too heavily focused on large projects, you might suffer more in a softer market than those with a balanced portfolio. It could be a good time to start maintenance or handyman services to serve your base and create more clients.
5] Develop a written plan with important milestones. This plan must be adopted by everyone, and should have contingencies for if the market gets tougher.
6] Communicate with confidence. Your team wants the leadership to be clear and confident on how the business will address softer conditions. Communicate often and without a lot of spin; make them believe in your confidence and conviction.
7] Watch your cash. Try to build a bigger war chest in preparation for softening. This might be more cash or a larger line of credit. The best time ask for a larger line of credit is when you don’t need it. By having more cash or access to cash, you will be able to make better business decisions.
The more closely you watch the market, and prepare your team for support during slower times, the better.
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