My first job in trade journalism was with a magazine that served the pool industry. The owner of the publishing company, Jules Field, was in his 80s and had been in publishing since 1961.
Jules taught me a lot, but one of the things that stuck with me the most was an understanding of the boom and bust cycles that hit virtually all industries.
“You think things are going so well,” he would say in his creaky old-man voice. “But let me tell you, that will change.”
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It was the early 2000s and the country was moving into a housing boom that, just a few years later, would lead to the Great Recession. But at that moment, times were so good that pool builders were turning away business. “Uh-huh,” I said politely.
Jules continued, explaining the importance of making decisions for the conditions your business faces today as well as actively planning for the conditions you will face in the future. In his case, that meant putting aside money during good times that he would use to help cover expenses and increase his marketing budget down the road when things inevitably got tough.
I’ve been thinking of Jules lately and what he would say about this remodeling market. The huge demand for home improvement combined with labor and supply chain problems are creating unhealthy backlogs. I’ve talked with remodelers who are booked into 2024 with no end in sight.
“You think things are going so well, but let me tell you, that will change.”
Times have changed since Jules was alive, but his principle still holds true. There will be a downturn again. Will it happen in 2022? Probably not. Predictions are that the economy will remain strong and so will demand for home improvement. Yet interest rates are rising and the massive increases in consumer prices aren’t going away any time soon. I’m hearing predictions of a possible recession in 2023 or 2024.
This means that now is the time to start positioning your business. That planning may look different depending on your region, client base, and the type of projects you most often build, but it’s important to take a long, hard look at your company and probe for weaknesses.
When Covid hit in Q1 of 2020, many remodelers were caught without enough operating cash to cover their expenses when they weren’t able to work and the leads dried up overnight. If you were one of those, don’t make that mistake again. Another area to examine is marketing. It’s easy to put lead gen activities and branding on the back burner right now, but resist the temptation.
Now is the time to make sure you have the right marketing strategy to reach your chosen demographic. Also, it wouldn’t hurt to have a plan in place to expand your base if needed. Smaller projects? Basement refinishing? Whatever that looks like to you.
Other thoughts: How’s your debt? Are you keeping relationships going with past clients? Are there expenses you can reduce? Closing out 2022 from a place of strength will set you up for whatever comes down the road.