Photo Credit: Mark Robert Halper
The remodeling environment is tougher now than it has been at any time during the last 15 years. With home prices slipping, new-housing starts down, the war in Iraq, an uncertain political climate, a poor stock market, and sinking consumer confidence, your clients are comfortable in “do nothing” mode.
Many remodelers are affected the same way. Recently, I was at a remodeling association meeting and the mood was bleak. Many remodelers I spoke with told of dried-up leads, a production pipeline that has slowed to a trickle, and sinking company morale. When I asked what they were doing about all this, many stared at me like deer caught by headlights.
They seemed paralyzed and confused, content to just stand by and wait out the storm. Or else they were rolling out more 2004-style marketing — haphazardly sending direct mail pieces, showing a prized project in a local magazine, or blanketing homes with “We’re in the neighborhood” fliers — and wondering why none of it was working.
THE BIG THREE
This malaise affects established companies as well as startups. The Small Business Administration has reported that three out of five businesses go bust within five years, but a more important statistic is that nine of 10 are out of business within 10 years. A mature remodeling company today is as much at risk as a business that is relatively new. In this environment, only the fittest will survive and flourish (often becoming employers for some of those who will fail).
So what separates the “fittest” remodeling companies from all of the others? I believe it boils down to three things: a mindset; a belief that change is a constant; and a focus on the fundamentals of a fit business.
Mindset. This is a belief that your success is up to you and your actions and not just the cards that are dealt to you. The fittest business mindset looks at the glass as half full, not half empty. Businesses with the right mindset find opportunities hidden behind obstacles and learn to ask the right questions instead of becoming frustrated when the answers are not obvious. The right mindset is critical to survival in this environment.
Constant change. The fittest remodelers understand that change is inevitable. Because they expect change, they are prepared for it. This attitude is part of a company’s internal conditioning and involves an entire organization’s commitment to constant improvement. Companies that are prepared for change are not surprised by volatile market conditions and they are energized, not exhausted, when change occurs.
A “fit” business. This third characteristic begins with the process of articulating what it means to be fit. Take a serious inventory at all levels of your business, including your team, your processes, your product or service, and especially your own leadership and business proficiency. As you uncover strengths and weaknesses, you will have the beginnings of a blueprint for better business fitness. This kind of planning isn’t much different from what you do every day for your projects, but it’s a little more difficult to be objective when the subject of scrutiny is your own company. Seek out an adviser or someone to serve as a sounding board if you feel you are not fully equipped to handle the process on your own.
Work first on the fundamentals, including key metrics. In our personal lives, we wouldn’t dream of running a marathon or embarking on a 100-mile bike ride without confirming that our heart rate, blood pressure, and other vital signs are good. It’s the same with a business.
Once this foundation is laid, you will be able to focus more of your energy on changing your marketing strategies, implementing new technologies, and introducing new products and services that will help to grow your business. It won’t be easy to survive in this tough remodeling environment. The good news is that, unlike many industries, your are in control of your own destiny.
The apple picking may be tougher now than in the past, but the orchard is still strong. With the right tools and hard work, you can be successful. —Mark Richardson is president of Case Design/Remodel and author of the book “How Fit Is Your Business?” due out this fall.