Before the 2008 economic meltdown, you probably had a good relationship with your bank. If you needed it, you were easily able to get a line of credit to assist your company cash flow, likely secured with your home or some other asset that had more value and equity than your company. Homeowners were also using lines of credit through their banks to pay for dream remodeling jobs, vacations, college tuition, and to purchase second homes.
After the recession, people who lost jobs were unable to pay back loans or keep up with mortgage payments. Cash shortages forced banks to strengthen loan requirements, requiring excellent credit for any new loans for both homeowners and for small businesses like yours.
Homeowners cut back on their spending — something that they have continued to do — which affects your business to this day. People are spending money on “needs,” and holding off on “wants.” They are still not confident in the market, and they are fearful of borrowing, so they are using their savings to pay for remodeling projects. As a result, remodeling projects are getting smaller, are harder to close, and are taking longer to close.
Remodelers need to spend more time with the homeowner to develop trust. This may mean that as company owner, you are spending more time on personal appointments or on e-mail and phone correspondence with potential clients.
Improve Your Skills
To keep projects flowing to production, you need to hone your skills in this area. You may even want to consider training, to help you establish a level of trust with clients during every interaction.
Sandler sales training is one option that is suitable for the remodeling industry and has been successful for my clients. Look for training that matches your learning style as well as your schedule. Some offer Internet seminars, CDs, and audio. If you can’t handle all the leads that are coming in, consider training someone else at your company to help you or, in an extreme case, hiring a salesperson. Review your finances closely to see if you can afford to add personnel.
No matter how much your clients push for value-driven projects, you should be secure in your company’s processes and policies and not lower your price to gain an unprofitable job.
On the other hand, don’t provide a low price and push hard to upsell additional work. Concentrate on the job at hand — the additional work will come to you once you develop a trusting relationship with the client.
—Les Cunningham is president of Business Networks, a peer-review organization. firstname.lastname@example.org