Jim Peterson, President of ConcreteNetwork.com writes for the twice-yearly client newsletter and for a regular email newsletter from ConcreteNetwork.com. His opinions offer guidance that we wanted to be sure our readers had an opportunity to apply. We appreciate Jim’s dedication to concrete and decorative concrete vision.
Where Are We Now? What’s Ahead?
by Jim Peterson, President of ConcreteNetwork.com
A favorite quote of mine is, “In hindsight, I guess I should have done a better job of looking forward.” To me, this highlights the need to spend time periodically looking out to the future. Here are some things I’m thinking about and making contingency plans for:
#1 – It might be a long time before new home construction ramps up to any significant level. Whereas in 2007 many (including me) were predicting a 2-3 year slowdown for new-build, it turns out that four years later, in 2011, new-build just hit a 48-year low. Worse, with the backlog of troubled loans and empty houses, it might be several more years before the new-build market really starts to move up substantially. And don’t even think about it returning to 2004-2005 levels, since that boom was built on a foundation of easy-lending sand. So, this all means that there will be a lot less new pool decks, patios, driveways, etc., to build
#2 – If we agree new-build is down for a while, that means we must figure out how to get our share of the refurbish, rebuild market. Fortunately, the remodeling market is growing. A report by the Joint Center for Housing Studies at Harvard University has predicted remodeling will rebound strongly this year after a three-year downturn, estimating an uptick of 9.1% for the first quarter and 12.1% for the second quarter. Part of this trend is homeowners, who put off maintenance and improvement projects, beginning to spend more freely again. Polished floors, overlays, replacement counter tops, stained floors, refurbishing pool decks, patios or improving a driveway all fit into this remodel category nicely.
#3 – Find a way to service remodeling customers who are on a budget. In my opinion, we can’t offer the prospect only the higher cost options. Offer two or three options (good, better, best?). I know everyone wants the bigger sale — but give people options so you don’t leave without the sale.
#4 When you find the customer with money, have the skill set to be able to satisfy all of their decorative concrete needs. There has been much talk about diversification over the years, whether it is good or bad to do more types of work. Right now it is a good thing. There is a debate about income bifurcation in the country, with the rich enjoying most of the income gains. I think it is true — so, when you run into rich people, don’t make them go anywhere else.
When I asked an adviser to look over the above four points, she was good at distilling my thoughts down to one sentence. “So what you are saying, Jim, is — there are not going to be many new homes for awhile, but there is remodeling going on where a contractor can get some work from the middle class people doing upgrades and bigger jobs from wealthy people doing what they do best, spending lots of money.”
I had to agree that about sums it up.