Most remodelers are busy now. It’s likely they have been that way for some time.
With all that work getting done by your company, isn’t it time to do a big remodel on your current home, buy a different home and remodel that, or build a custom home?
After all, those profits are coming in. The housing market is hot. You have brought a lot of business to your subcontractors and vendors, so you can get some consideration from them were you to do a project for you and your family.
Be careful. Here are some reasons why.
Demands on Your Time
When the owner of a company has work done on their own house, the demands on their time are always greater than anticipated.
Think about it. Ever get frustrated with your clients and their decision-making process? (“Why can’t they make decisions?” “Why can’t they stick with them?”) When it is your own home, you find out why.
You are already busy. You are likely already somewhat stressed. Add in a big project you are going to be driving and watch out for the health of yourself and your company.
Many of you work for clients who have lots of money to spend with you. You are exposed to great finishes and fittings, most of which cost a lot.
The effect is like that of a drug. If they can have it, why can’t I?
As the design and specification process progresses, scope creep happens (as it always does with your clients). Soon you are pushing or exceeding the limits of your original budget. But you’re thinking that if you are going to do this project, it only makes sense to do it “right.” Beware the hangover that will result.
Lower Gross Profit Dollars
You go into the project saying you won’t let it distract you. In the back of your mind you know that will be impossible.
Suppose you are a salesperson for your company. Expect the pace of the sales process to slow down as you deal with issue after issue needing your attention.
As the design/sales pipeline slows down, less backlog gets built up. Eventually, gross profit dollars stop adding up so quickly.
Or consider this: You say you will only use subcontractors and not have your in-house employees work on the project. Then something goes wrong and the only way to make it right is to use one or two or more of your in-house employees. While they work on your house, they are not making any gross profit dollars for the company.
When Everything Hits the Fan
If you have been in business a while, you know that business is always going up or going down. When it is going up, everything seems possible. When it goes down, you can’t believe that it has happened again. And the impact on your company and on your own personal finances is greater than you imagined it could be.
Before the Great Recession, a remodeler I know who works for clients with ridiculous amounts of money got seduced. He did a spectacular remodel on a three-story historic building to be the family home. “Historic” means everything had to be replaced.
The project included lots of upgrades. Among them were a pool, an outdoor kitchen and beautiful landscaping.
Then the downturn happened. He lost the house and his marriage.
Everything will hit the fan at some point. It always does.
Be smart and be careful. If you are going to do work on your own home, exercise discipline and restraint. Consider master planning the project and doing phases over time, when the income is being made to fund the work.
Then when you walk around your improved home you will enjoy it instead of being worried if you will be able to keep it.