This piece was original published in Mid Atlantic Builder & Remodeler Magazine in May/June 2009. Click here to see it in its original format.
The Remodeling Market Index (RMI), which has been calculated and published since 2001 by the National Association of Homebuilders, is a statistic which measures remodelers’ perceptions of market demand for their work. It ranges from 0 to 100, so an RMI above 50 indicates that the majority of remodelers view market conditions as improving.
According to Remodeling Magazine, in the last three months of 2008 the RMI fell “to yet another historic low.” Infact, the actual 4th quarter 2008 RMI slumped to 27.7, down significantly from the previous low of 33.5, which had been recorded just a quarter earlier.
Worse yet, future expectations (the amount of work already scheduled for the next three months, calls for bids, backlog of remodeling jobs, appointments to present proposals, etc.) plummeted to 19.6. That means that over 80 percent of polled remodelers see future expectations as highly negative. It’s no wonder, because in some areas of the country, “many remodelers were asking if their phones were still working because they received virtually no calls for work,” according to an NAHB press release about the RMI.
In this atmosphere of negative expectations, there are many things that can be done. We should all be selling VALUE–the highest value, even on a modest project. Value never cheapens, never goes out of style and never goes away. Offer the highest value for the fairest price, but cut down the size of the job. Trying to deliver big projects for little budgets and not much profit will be a disaster! Instead, offer your customers excellent remodeling projects that don’t cost as much, using value engineering.
Being proactive and seeking out the help of a business or sales coach can also help you get through these times. If you haven’t done it already, join HBAM. HBAM offers you proven help, the advice of your peers and the support that can mean a lot these days. HBAM and the HBAM Remodelers offer you the Remodeler 20 groups, educational programs, peer group councils, the opportunity to get involved in legislative issues and they can even steer you towards valuable courses on how to improve your accounting, how to estimate better and how to get the most out of a job even in a bad economy.
Finally, staying socially connected is the best form of advertising you can do! Get linked to non-profits, boards, community groups, church groups, civic groups and venues where you see people and can communicate one-on-one. It’s not a hard-sales function, but it’s a golden opportunity to let people know what you do and how you do it. You might even join Facebook or LinkedIn — don’t laugh: more and more adults are using social networking sites to link, keep in touch, share news, etc. HBAM has a page on both Facebook and LinkedIN so take a look and join us there.
Your next good job may be only a “friend” away!
Donald F. Lynch, Jr., CGR, CAPS
HBAM Remodelers Council