David Foster, owner of Foster Home Improvement, in Lorton, Va., says he noticed signs of recession in late 2007 when clients could not get bank funding to finance their remodeling projects, forcing them to scrap or reduce their design plans. “The market got more competitive,” he says, “and clients were slower to decide.”

Now, he points out, people are talking to five or six contractors when they used to just talk to one or two. “They’re waiting to hear back from everybody.” But despite customer reluctance, Foster’s 2009 first quarter is going well. “We’re slightly ahead of what we did last year at this time,” he says.

Though most of Foster’s jobs still focus on one room, he says that before the recession people were more inclined to also add on to other parts of the house. As a result, the company’s average job size now is $140,000, compared with $250,000 in 2006–2007.

But Foster is in a prime location for sales growth. “Being in the [Washington] D.C. and government area is good because there are a lot of new people coming in and a great number of opportunities,” he says, “We just have to convert them into sales.”