How are you doing?
With warmer weather coming, a seasonal uptick in ground-up construction is always to be expected. But if you are a home remodeler, what’s going on in your world?
That’s what the National Association of the Remodeling Industry (NARI) asked more than 500 of its members. Based on responses of those surveyed (nearly 30 percent), NARI’s 4th quarter Remodeling Business Pulse points to a moderate rate of remodeling growth in the 4th quarter of 2015 and 1st quarter 2016. This represents a slight uptick with December ratings for current conditions slightly higher than those reported in September. Based on a scale of 1-9 (1 being the least positive), responses tallied 6.05 overall, which the Association notes still reflects growth (because it is above a neutral 5 point rating). Nonetheless, NARI reports the rating is still one of the lowest it has seen in the 16 waves of its study.
Modest gains demand smarter business practices
According to NARI remodelers responding, “All the sub-components of current conditions except one were down in December. None,” the survey reports, “were statistically significant, but two were almost at that level. The two changing the most were the declines in ‘Number of inquiries’ and ‘Requests for bids’.”
This is noteworthy to us as inquiries and bidding are key components of keeping one’s pipeline full. Here’s how the numbers and the change from NARI’s September 2015 study panned out:
– The Number of Inquiries tallied 5.73, down 4.8%;
– Requests for Bids came in at 5.77, down 4.6 %l
– The rate of Conversion of Bids to Jobs was 5.75, down a minute 1.0% from September 2015; but
– The Value of Jobs racked up 6.21 points — a 0.3% increase.
The “good-ish” news is that “conversion of bids to jobs” appears to have recovered from its previous rank as home remodeling’s weakest link. Looking at the current quarter, remodelers surveyed are more positive. A majority of those surveyed (58%) expect growth, compared to 14% who see some level of decline. The balance (28%) see sales remaining the same as last year. This good news is still less “good” than last year, according to NARI, when more remodelers projected better conditions through the year end.
Improved home prices and a plusher economy are expected to drive growth in 2016, as people take on a project they’d previously postponed. Overall design and core kitchen and bath remodeling are leading the charge, followed by energy savings initiatives and higher end products.
What kind of practices?
Operational efficiency is going to be key for most home remodelers this year. This means, smarter bids, tighter estimates, sharper margins, an efficiently allocated workforce, and better tracking/billing for time and materials.
For remodelers tracking this data on spreadsheets, this level of attention to detail can make the difference between a profitable year and something else. But it also means working more nights and weekends just to keep up with the paperwork. It’s an ugly reality unless one looks ahead and takes advantage of the many accounting and business management solutions currently on the market. Which makes sense…when’s the last time you pounded a nail into drywall using your shoe instead of an electric drill?
Technology (the right technology) can help contractors maximize the ROI of the inquiries received and bids produced. If knowledge is power, accessing tools to deliver real transparency into hours, job assignments, client management, and productivity to ensure projects stay on schedule and on budget can make the difference between eking out a living and making real money. And maybe cut down the back office cleanup you do nights and weekends. Win. Win. Win!
So how do you get there? Do your research. Knowify, for one, can help. We’re already helping contractors integrate their business management needs with accounting systems like QuickBooks from an easy-to-use interface accessible from any device — in the field and in the office. If you have any questions or wish to share your feedback, you can find us at email@example.com.
Knowify. Built for the real world.