James Barton Design-Build
Apple Valley, Minn.
It’s made us look at our company a lot harder. As part of that, we’ve had to take a long look at our trade partners. We’ve changed some vendors who aren’t priced competitively in this new market. We basically told them, “If we have to tighten things up, you have to, too.” Many trades have brought down their prices a bit because they just don’t have as much work.
We’ve also been helping our clients to prioritize their projects if they feel that the price tag for the full job is too high. Let’s say we’ve designed a $150,000 project for them. If they’re worried about doing a job that large, we’ll break it into two phases. We’ll do the biggest chunk now, then plan to do the remaining $40,000 when the market comes back.
We’re doing a lot more bidding this year. Our sales department is going gangbusters; it seems like two or three bids come across my desk per day. Homeowners seem hesitant to commit, however. They are initially curious about what a remodel might cost, but are slow to pull the trigger because of the economy.
That initial interest is a good thing; it indicates that there is still a market for remodeling. But because fewer homeowners than usual are actually signing contracts, it’s important that we get in front of as many of them as we can.
Historically, we’ve been almost exclusively residential remodeling. Now, we’re diversifying a little bit and adding to things we offer customers. We’ve recently started a service department aimed at retired homeowners who want or need assistance doing things like cleaning gutters. We also offer preventative maintenance to previous clients at a discounted fee.
Two things have really helped our business during these difficult times: Sharpening our processes and procedures, and strengthening our relationships and company image.
We’ve reduced our staff over the past year. We now have a dedicated group who really “gets it,” and I would not want to lose a single one of them.
We all get together monthly for a “big picture” meeting to review policies, define job descriptions, and work on the business. We’ve also taken the time to modify and tighten our estimating, sales, and job costing processes.
Showing clients and associates the value we provide for them has been crucial to our continued success. Performing quality work with a high level of customer service is a given, but it’s important to take everything up a notch. Our presentations are more professional and personal. We are staying in contact with past clients, and we’ve become more heavily involved with industry organizations and events.
Jonathan McGrath Construction
Some of our potential clients have asked if they can get a better deal given that business is slower. We explain to them that our backlog — and that of our trade partners — is much smaller, which works in their favor in that their project gets done faster.
We also tell them that in some cases we may be able to negotiate a better price during the building phase, but not while we’re in the midst of design. People love to think that they can get a deal, so this has helped get them off of the fence and into a contract.
We’ve renewed our focus on cutting down on waste, reducing mistakes, and eliminating slippage. Doing so has saved us and our clients valuable dollars, as we consistently come in under budget.
We prefer this approach to price-shopping our trade partners and other vendors. We need loyalty now more than ever, and we need to be loyal to them in return. When they submit a price, we know it’s complete, and we know the job will be done to our high expectations. If we need a trade to lower their price, they know we are asking so we can get the job and we’ll all have work. Mutual respect goes a long way.