Sales volume for Renovations in Prescott, Ariz. has been $2.5 million to $3 million for the past few years. This year, owner Tom Reilly expects to close at $1.3 million. Though the adjustment has been hard, he still views the glass as half full. “The dark days were in January, February and March. We came out of those still standing.” From the middle of February to the end of March, he asked his staff to take one unpaid furlough day per week. “My construction manager put on his tool belt more often,” Reilly says.
Though he’s received a few more phone calls and leads in the past month, he still can’t predict how the year will end. “When I look at unemployment numbers, they are keeping people scared and keeping people home,” he says. “Any good news is being lunged on by people so once employment starts to level off or even pick up slightly, I hope to see the pent up demand in remodeling come out.”
Recession-weary homebuyers expect a bargain and Reilly is giving them one. He lowered his margins by about 3%. “Our price points are down a little as I compete with newly unemployed workers from other contracting companies.” Reilly is working hard to educate homeowners about checking if these contractors are licensed and bonded. He is establishing his reputation as an expert in a recurring guest spot on a local “Ask the Contractor” radio show. In addition, he asked his local contractor’s association to help with this education process. The association put together radio and print ads that tell consumers “Don’t go it alone,” encouraging buyers to work with reputable contractors.