Stars are Aligning for Contractors; This Year Could Be the Turning Point in Your Business
The economy and the remodeling marketplace finally seem to be improving. It’s not happening as fast as we all might like, but it is slowly improving in what appears to be a sustainable way. And, as a result, consumers have been gaining the confidence to once again spend money on and invest in their homes. If the recession caused your business to downsize or slow down, now might be the time to decide whether you want to and will commit to improving and growing your business.
Indications that contractors and the supply chain are both optimistic
I am still being cautious about making such a statement about the marketplace, but a few key indicators have prompted me to do so.
First, is the number of contractors not only contacting me for help with their business systems, but actually committing to the investment required to do so. About a year ago I noticed the inquiries picked up, but after we discussed the typical costs to put business systems in place many contractors decided to hold off, citing concerns about short work backlogs and protecting their cash flow requirements. Now, with a good backlog of work under contract, both the calls and the commitments have dramatically picked up.
Second is that the supply chain is finally spending money again on marketing to and investing in their remodeling contractor customers. Although still not as busy as they used to be, trade shows this past year have grow in size again as more manufacturers and distributors are back participating at the shows. Also, since about early this past summer, the number of manufacturers, distributors, dealers and trade associations contacting me about speaking at their events has also dramatically picked up. The supply chain is once again spending money to educate their staff as well as their contractor customers, as a way to grow their businesses as well as their customers’. The Rhode Island Builders Association Boot CampsThe Rhode Island Builders Association Boot Camps I was involved with is just one example of this trend.
Don’t get left behind
If you’re a contractor thinking about the future opportunities and potential for your business now is the time to act. As I discussed in a previous blog titled “Generic Contractors Are Fading Away, Brand Names Are Shining”, those contractors who are investing in their business systems and their brand have been capturing good projects with good margins. Those who have been and continue to protect “their status quo” are going out of business or continue to struggling financially.
Here’s how I look at it.
About 75-80% of remodeling consumers buy predominately on price. Also, my experience tells me, about 75-80% of contractors are generic commodities in their market place. That means that if you want to capture business from the 20-25% of consumers who select a remodeler for reasons other than lowest price you better get going improving and differentiating your business. The idea is to build your market share, in your target market, before someone else does.
Here’s a quote by a famous baseball personality that I think sums things up
"There are three types of baseball players: those who make things happen, those who watch it happen, and those who wonder what happens."