Amid an Eventful Year, Pros Adjust Their Planning for 2021
Pros share how experiences in 2020 have brought growth and new approaches to building a strong business
It’s hard to believe that we’re in the home stretch of 2020, an eventful, stressful and unusual year. The holidays are nearly here and before we know it we’ll be welcoming 2021. We recently spoke with remodeling and design pros to find out how they’re planning for next year now.
Reviewing Product and Material Costs and Lead Times
Another way pros are planning ahead for next year is by building in long lead times when it comes to obtaining materials. The pandemic has affected product and material availability, cost and delivery times. “For something that may have taken a month before, now you have to be ahead two or three months — like appliances,” Clark says. Wildfires in California and along the West Coast have affected companies that make products such as windows and doors, he adds. And the cost of lumber has gone up dramatically.
These factors have led Clark to thoroughly research the price of materials he uses in his projects. He’s spoken to trade partners such as plumbers and electricians and asked about costs for materials like pipe and wiring. He’s reached out to distributors as well. “We’ve literally spent days following up with our vendors and trade partners on pricing,” he says. “These are things we’ve never done before because we never had to.”
Clark has also added a clause in his estimates indicating that the quoted prices are good for only 30 days. “We put clauses in there that we’re going to have to reprice it out 30 days prior to the project starting,” he says.
Download our End of Year Checklist: Finance
Another way pros are planning ahead for next year is by building in long lead times when it comes to obtaining materials. The pandemic has affected product and material availability, cost and delivery times. “For something that may have taken a month before, now you have to be ahead two or three months — like appliances,” Clark says. Wildfires in California and along the West Coast have affected companies that make products such as windows and doors, he adds. And the cost of lumber has gone up dramatically.
These factors have led Clark to thoroughly research the price of materials he uses in his projects. He’s spoken to trade partners such as plumbers and electricians and asked about costs for materials like pipe and wiring. He’s reached out to distributors as well. “We’ve literally spent days following up with our vendors and trade partners on pricing,” he says. “These are things we’ve never done before because we never had to.”
Clark has also added a clause in his estimates indicating that the quoted prices are good for only 30 days. “We put clauses in there that we’re going to have to reprice it out 30 days prior to the project starting,” he says.
Download our End of Year Checklist: Finance
Strengthening the Brand Experience
Designer Wendy Langston of Everything Home in Carmel, Indiana, is holding a strategic planning meeting for 2021 with her eight-person staff in mid-November, around the time this story is published. A big focus will be on ensuring that clients who work with any of the five designers on her team receive a consistent experience — one that reflects the firm’s brand rather than any differences in the individual designers’ styles and approaches.
“We are high-service,” Langston says. “And yet I want [the client experience] to be more clear and more consistent so it develops more of a recognizable brand experience.” Her firm has been digging into “what are those key deliverables” that create a consistent experience that reflects the Everything Home brand. Beyond that, the planning sessions are intended to make sure the team is in agreement on how to deliver the brand experience. The goal is to reinforce the brand by using certain tools, such as company letterhead and a design quiz that helps clients define their style.
Designer Wendy Langston of Everything Home in Carmel, Indiana, is holding a strategic planning meeting for 2021 with her eight-person staff in mid-November, around the time this story is published. A big focus will be on ensuring that clients who work with any of the five designers on her team receive a consistent experience — one that reflects the firm’s brand rather than any differences in the individual designers’ styles and approaches.
“We are high-service,” Langston says. “And yet I want [the client experience] to be more clear and more consistent so it develops more of a recognizable brand experience.” Her firm has been digging into “what are those key deliverables” that create a consistent experience that reflects the Everything Home brand. Beyond that, the planning sessions are intended to make sure the team is in agreement on how to deliver the brand experience. The goal is to reinforce the brand by using certain tools, such as company letterhead and a design quiz that helps clients define their style.
Preparing for Sudden Opportunities
In Shepherd, Montana, Andrew Zimmerman of Otis Creek Construction is preparing for a potential shift in opportunities as winter arrives. Earlier this year, when the first U.S. wave of the pandemic hit, Montana had a 14-day shelter-in-place order. “Once that hit, our business exploded because everyone was at their house looking at projects they wanted to get done,” Zimmerman says. “As the pandemic has continued on, we have seen a lot of out-of-state individuals moving here. We’ve had a massive influx of people moving to Montana.”
Population growth plus recent hailstorms have amped up demand for Zimmerman’s firm, which installs high-end windows and doors and replaces siding and roofing in addition to remodeling.
Out-of-state companies have also come into the area to meet the demand. But after a record-breaking first snowfall of the season on Oct. 17 in nearby Billings, Zimmerman is anticipating a potentially harsh winter, and if that happens, he expects some of those out-of-state companies may not be able to carry on, “either because they don’t have the equipment or they aren’t used to it when it’s zero degrees and there’s snow everywhere,” he says.
“They don’t have the technical knowledge. And that’s really what we pride ourselves on: technical knowledge,” Zimmerman says. He expects that not only will some of these less technically savvy companies leave the area this winter, but also that it will be easier for his company to close the deal when pitching its expertise to potential clients.
If demand dries up over the winter because of the economy or other factors, Zimmerman is confident that his broad client base will provide projects he can fall back on. Plus, he knows he can find work in Big Sky, about three hours away. “People in Big Sky aren’t really affected as much by recession-based stuff,” he says. “If the boom ends up collapsing, Big Sky should stay strong.”
In Shepherd, Montana, Andrew Zimmerman of Otis Creek Construction is preparing for a potential shift in opportunities as winter arrives. Earlier this year, when the first U.S. wave of the pandemic hit, Montana had a 14-day shelter-in-place order. “Once that hit, our business exploded because everyone was at their house looking at projects they wanted to get done,” Zimmerman says. “As the pandemic has continued on, we have seen a lot of out-of-state individuals moving here. We’ve had a massive influx of people moving to Montana.”
Population growth plus recent hailstorms have amped up demand for Zimmerman’s firm, which installs high-end windows and doors and replaces siding and roofing in addition to remodeling.
Out-of-state companies have also come into the area to meet the demand. But after a record-breaking first snowfall of the season on Oct. 17 in nearby Billings, Zimmerman is anticipating a potentially harsh winter, and if that happens, he expects some of those out-of-state companies may not be able to carry on, “either because they don’t have the equipment or they aren’t used to it when it’s zero degrees and there’s snow everywhere,” he says.
“They don’t have the technical knowledge. And that’s really what we pride ourselves on: technical knowledge,” Zimmerman says. He expects that not only will some of these less technically savvy companies leave the area this winter, but also that it will be easier for his company to close the deal when pitching its expertise to potential clients.
If demand dries up over the winter because of the economy or other factors, Zimmerman is confident that his broad client base will provide projects he can fall back on. Plus, he knows he can find work in Big Sky, about three hours away. “People in Big Sky aren’t really affected as much by recession-based stuff,” he says. “If the boom ends up collapsing, Big Sky should stay strong.”
Your turn: How are you planning for 2021? Please share in the Comments.
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Learn about Houzz Pro software
Talk with your peers in the Pro-to-Pro discussions
Join the Houzz Trade Program
Many home design and remodeling professionals report that 2020 has turned out to be a fantastic year for business, with their firms and practices busier than ever. “Things are booming in the last five months,” says Eugene Sakai of Studio S Squared Architecture in San Jose, California, a nine-person architecture firm focused on single-family homes. As a result, Sakai is considering increasing staffing for 2021.
“We look at our backlog of work: the dollars that we have in contract versus our expenses,” he says. “That can tell us how many months of work we have. If we have too many months of work in contract, we realize we need to start hiring.”
The sweet spot for his firm is four to five months of work in contract, Sakai says, and when six or seven months are on the books, it’s time to hire — which has now happened. “We’re looking long and hard at finding good contractor relationships as opposed to full-time employees,” he says. “We want to remain flexible in staffing so we can commit more to our core group of employees in the event of an economic downturn during these still uncertain times.”
Jon Clark of Maple Avenue Construction in Tempe, Arizona, already increased his staff from two people to five this year to meet demand. He’s also carefully tracked project inquiries and leads and analyzed this data to uncover trends in the volume of projects coming in and the types of projects homeowners want to tackle. This analysis helped him determine the skill set he needs to hire for next.
“You have to be mindful in how you grow,” Clark says. “I see a lot of companies that are just grabbing bodies. They’re not skilled or talented to be doing the thing they should be doing.”
Clark prefers to be choosy. Otherwise “you’ll see a drop-off in quality and service delivery because the skill set is not there to be able to provide it in the appropriate time frame,” he says.
As you plan for next year and look to improve your systems, you might consider Houzz Pro, a business and project management software. Houzz Pro makes it easy to track and follow up with leads, so you stay on top of every potential project.