After a record year for Renewal Construction in 2008, CEO Peter Michelson saw 2009 revenue drop to 2007 levels. The Decatur, Ga., company had a good number of leads, but it needed six to eight raw leads to win one construction agreement. Also, jobs were smaller. “Last year, $75,000 was the new $300,000,” he says.
Near the end of 2008, Peter and his partner, brother David, asked employees to take a 10% pay cut to help survive the recession without layoffs. Even so, the company operated at a 2% loss for 2009. Despite the tough times, the company doubled its marketing budget.
These two changes paid off. At the end of 2009 and coming into 2010, the company’s average job size increased to $90,000, and it has four construction agreements in the $150,000 to $300,000 range. “It’s from pent-up demand,” Peter says. “We have the biggest book of work going into a new year.”
With a total of $2.1 million in work coming in to 2010, Peter thinks the company is on track for its $4.4 million revenue goal and is glad he kept his staff and can handle the work. He recently hired a new designer and is contemplating hiring a salesperson.
—Nina Patel, senior editor, REMODELING.