Qualified Remodeler Magazine

JAN 2019

Qualified Remodeler helps independent remodeling firms to survive, become more professional and more profitable by providing must-have business information, namely best business practices, new product information and timely design ideas.

Issue link: https://qualifiedremodeler.epubxp.com/i/1070573

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Page 8 of 66

Patrick L. O'Toole Bring Home a Good Year in 2019 NO MATTER WHERE in the U.S. you operate your business, forecasters predict demand for remodeling services will remain strong in 2019. The industry will see between 4 and 6 percent growth this year, depending on whom you ask. This is good news. That does not mean running a remodel- ing business will be easy; it never is. In fact, there are signs that imbalances are creeping into the economy. We are 10 years into a growth cy- cle, and some sectors of the economy (not residential construction) are showing signs of weakness. With each passing year, the risk of a general economic slowdown grows. Very few economists are predicting a recession in 2019. But 2020 is a different story. Many economists say the probability of seeing one 18 to 20 months from now is better than 50 percent. Here's another worrying factor. Prices for homes have risen, which is good for existing owners; but they've hit a level where home buying is unaffordable for many renters who want to own, particularly younger house- holds. This suggests home price adjustments will follow. The problem is particularly acute in high-priced coastal areas and other hot markets, mostly in the South. So the question is: How will you make the most of the opportunity that lies ahead this year? Here's why I ask. Some remod- elers and home improvement pros seem to have their blinders on. They are putting a lot of money into marketing and pay- ing ever-higher prices for qualified leads. To better understand this phenomenon, I recommend our story on page 44, "Arrest High Marketing Costs: They Are Killing Your Business." In addition, some remodelers seem to be ignoring to some degree the rising costs for labor and materials, particularly steel and lumber. Some of these costs are associated with ongoing trade disputes where the out- come is not settled. What is settled is the rising cost of finding and retaining qual- ified construction staff. Those costs will likely rise for the foreseeable future. With higher labor costs in mind Shawn McCadden, in his column this month, sug- gests a strategy of building your business around jobs that require more materi- als, which can be marked up, rather than more jobs with more workers. It's certainly an idea worth considering. Here's another ques- tion: What is your process for raising prices? And does this process need revisiting? That is why Kyle Clapham, our senior editor, set out this month to better understand how some of the most experi- enced and successful remodeling companies in the business raise prices. His special re- port, "Price Crunch," found on page 34, of- fers insights from Andy Wells of Normandy Remodeling, Todd Jackson of Jackson Design and Remodeling, Michael Anschel of Otogawa-Anschel Design+Build, and Matt Millsap of Building Company No. 7. It's cer- tainly worth a read. There are plenty of customers out there waiting for you this year. By keeping a close eye on rising costs and responding with timely adjustments, 2019 may well be your best year in business yet. KEEP AN EYE ON RISING COSTS AND MAKE TIMELY ADJUSTMENTS. 8 JANUARY 2019 QR QUALIFIEDREMODELER.COM EDITORIAL DIRECTOR'S NOTE A preferred publication of the National Association of the Remodeling Industry and the NAHB Remodelers Published by SOLA Group, Inc. 1880 Oak Ave., Suite 350 Evanston, IL 60201 847.4 40.3000 Publisher and Patrick L. O'Toole Editorial Director Patrick@SOLAbrands.com Ext. 103 Senior Editor Kyle Clapham Kyle@SOLAbrands.com Ext. 107 Managing Editor Kacey Larsen Kacey@SOLAbrands.com Ext. 105 Contributing Editor Chuck Ross Audience Development Mike Serino Mike@SOLAbrands.com Creative Director & Tracy Hegg Production Manager Tracy@SOLAbrands.com Senior Graphic Designer Erika Nygaard Erika@SOLAbrands.com Editorial Advisory Board Stephen Gidley, GMB, CAPS, CGP, CGB, CGR, CPRC, CR Jeffrey Holloway, CKD, CBD, CGR Michael Nagel, CGR, CAPS Scott R. Sevon, CGR, CAPS, GMB, CGP, GMR Donna Shirey, CGR, CAPS, CGP Kenneth P. Skowronski, CR Publisher/ Paul DeGrandis West Sales Manager Paul@SOLAbrands.com Ext. 100 East Sales Manager Dan Miklosz DanM@SOLAbrands.com Ext. 118 Midwest Sales Manager Jessica Fidrocki Jessica@SOLAbrands.com Ext. 117 Midwest Sales Manager Zach Stenberg Zach@SOLAbrands.com Ext. 115 Southeast Sales Manager Dan Agostinacchio Dan@SOLAbrands.com Ext. 101 National Automotive Tom Lutzke Sales TLutzke@ACBusinessMedia.com Product Showcase/ Mike Serino Classifieds Mike@SOLAbrands.com Ext. 102 Digital Programs Tim Steingraber Manager Tim@SOLAbrands.com Ext. 106 Projects Manager Heidi Riedl Heidi@SOLAbrands.com Ext. 111 Subscriptions QR Circulation Dept. (866) 932-5904 QualifiedRemodeler@omeda.com

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