There has been talk lately, on this magazine’s blogs and elsewhere, that “the remodeling industry as we know it is dead.” I don’t disagree with the symptoms used to back up these claims, but I do disagree with the diagnosis. Something must be alive and real before it can die. I think the remodeling industry has actually been in a prolonged dream state.

In their dreams, remodelers, manufacturers, distributors, and other industry stakeholders assumed that the money would keep flowing, project sizes would keep growing, and homeowners would keep demanding the latest and greatest products. Housing values would keep inflating and remodeling projects would sell themselves.

Well, dreams always end. Remodelers and their kin have abruptly woken up to business that must be earned. Not only has the fake money (home equity) stopped flowing, but it has vanished. Now there are more contractors than available work, and that reality is not likely to change anytime soon.

In the meantime, I have witnessed first-hand that legal contractors are running out of tolerance for competitors who operate beneath the law in order to induce homeowners with much lower prices.

Light Sleepers

To be fair, I recognize that not all remodeling businesses have been asleep. Those that have been in the industry for more than 15 years entered the latest recession with the hindsight of having already experienced at least one boom-and-bust cycle. Many were cognizant that the last boom was temporary, and the wisest among them built sustainable models and created recognized brands. They adopted sales systems that not only sold jobs but that also helped them qualify and choose customers who could become long-term clients.

By strategically investing profits back into their businesses, these remodelers built and faithfully maintained their infrastructure on a continual basis. They adopted technologies that made them more efficient and not dependent on (or held hostage to) a large and/or overpaid staff. They preserved cash and created rainy-day reserves.

In essence, they knew it was a dream. They enjoyed it but knew the alarm would soon sound. These are the businesses that are weathering the downturn and will be well poised when things improve.

Stay Awake

Once you wake up, move forward. Don’t try to go back to sleep. You won’t pick up where the dream left off. Accept the new realities and find ways to embrace them.

During the next two years or so, remodelers who are alert to their surroundings can find new ways to evolve their businesses and employees. Some will jump out front and lead the pack with new services, clients, and approaches. Watch what they are doing, figure out why it’s working for them, and decide if it could work for you, too.

Before you jump, however, be sure that you are willing to invest sufficient time and money to make it happen.

Sustainable success requires strategic thinking, hard work, and education. There is no magic bullet and no quick-and-easy solution. Be aware that tools don’t do the work; they only help you work more efficiently — assuming you are working correctly to begin with. Adapt your business to proven best practices and models, not the other way around. Adopt technology to support solutions, not as the solution. Rebuild your business so it’s ready for the next recession.

In the meantime, evaluate where you are in your dream state. If you feel that you’ve entered a nightmare, I suggest that you are still asleep. Because if you think the current marketplace is a nightmare that will end when you wake up, then you really might wake up dead.

Next time business seems too good to be true, pinch yourself to check whether you’re dreaming.

—Shawn McCadden founded, operated, and sold a successful design/build company. A co-founder of the Residential Design/Build Institute and former director of education for a national K&B remodeling franchise, he speaks at industry events and consults with remodeling companies. Contact him at; or