Assessing the Remodeling Industry – Podcast Episode 13

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Last updated on December 10, 2022

On our latest podcast episode, Doug Howard of Remodelers Advantage joins us to discuss the remodeling industry. He is an experienced leader, entrepreneur, and business consultant with over 25 years of success in leading organizations, starting new companies, and assisting client businesses as they start-up, grow, or transition. Doug joined Remodelers Advantage as Director of Consulting Services in 2017. He now specializes in helping remodeling company owners develop strategic plans, streamline processes, improve profitability, and navigate growth.

What is Remodeler’s Advantage and what do you do?

It’s a great question. Remodeler’s Advantage has been around for about 25 plus years. And the main thing the company does is it create peer groups of remodeling companies. They meet in groups of 10, they’re all from different parts of the country, within a group. So, they don’t compete with each other.

They share financials, they share organizational charts. Talk about. Things going on in the industry. And they really kind of worked as each other’s board of directors to set commitments twice a year and see how they can grow and improve their operations. I joined the company in 2017. My background had been accounting and consulting had my own company for about 17 years.

And then Remodeler’s Advantage, my role in the company is to really do and develop the department that does one-on-one consulting while coaching with clients. On any given day, I probably talked to five or six remodeling companies that we do over zoom calls or phone calls, and then to do some onsite work.

So, we do like onsite strategic planning and process improvement, you know, usually like a two-day visit. Then I do get to do some facilitation of the round tables groups as well, which is really great because I think a lot of times in consulting, you have a certain body of knowledge. And then you do more teaching than learning, but with round tables, we are continually getting updated on everything that’s, you know, like with COVID we just, it would have been hard to be the conversance on that based on prior history, it was what was going on in the here and now, you know, that was really a very helpful piece to being able to help folks navigate it.

How many remodeling companies do Remodeler’s Advantage work with across the US?

We have about 250 that are in our peer groups. You know, hovers between two 50 and 300. We have about another couple of hundred that are on our university. And then probably 50 or so at any given time that I work with that are under the umbrella of RA, but they’re not necessarily around tables members are or may or may not be in the university.

So yeah. So probably like five, 600 companies at any given time.

Going right into remodeling landscape, can you go over what it looks like in 2021?

You know, I think it’s funny. I tell people all the time if I had predicted in the spring of 2020, what, 2021 looked like, I probably would have been run out of town on a rail as being just stupid. We went from no one’s ever going to let us in their house again, we’re all going to be building decks and doing siding.

Cause we’re going to be outside right. To the most phenomenal rise in business activity demand for services. You know, I think some of it was economics. I think some of it was people spending a lot of time at home realizing that, any house, I think at some point during COVID seemed too small or poorly laid out, or, you know, I had one gentleman call me one time and said, you know, I loved my open concept until I had a work from home.

Is there anything that you guys have seen trend-wise in remodeling?

I think some of the things that we’ve seen with, with some of our clients is there’s a lot more attention to the sort of marrying up indoor and outdoor space. It’s just the nature of how things are being built now, people have, I think a bigger interest in what’s going on, not just in the house, but in and around the house.

I think a certain amount of flexibility people are looking for in terms of “I’m not sure what the next iteration of craziness looks like but we’d like to be able to have the house adjust when it does.” And so, I think there’s, there’s some of that.

Technology’s a big piece. I think one of the things we often laugh about is how we struggle to do some things remotely with some of the members on zoom up until COVID we had a one between our spring and fall meetings, we try to have a gathering. And I remember trying to stay on zoom for an hour and we couldn’t get people on and we couldn’t hear what they were doing.

And now things like unmute yourself as part of the, the common English language, right. Because of that, I do think people have embraced some technologies that are helping the industry. For instance, the way some people were doing measures. So, I’m wondering sometimes the initial consultation that was a 25-minute drive across town and back can now be accomplished, not everything should be done on two-dimensional zoom. But I do think there is some chance.

I also think there’s a benefit in that. I think people really saw that their processes and the way they did things were very important. They kind of spent some time looking at that. And I think that bodes very well for the homeowner, people looking at remodeling projects.

I think one of the most important things is what is it that the company that you’re talking about is really good at what do they spend a lot of their time doing? You know, do they have a well-developed process? Because I always tell people like remodeling projects can do it really, really easily, but a lot of times there are challenges, right?

It’s a challenging thing. And most folks don’t do a lot of remodeling projects in their lifetime. Right. They made you one or two big remodels in your whole lifetime. So, it’s not something that from a customer standpoint, that’s an easy purchase to make. Right. So, you try to figure out who’s good.

And, and you hear the horror stories. But I always tell people if I was going to climb Mount Everest, and if you knew me, you would know that that’s not a possibility, but if I was, I would want to go with someone that has already climbed Mount Everest that has done it successfully and then knows what some of the possibilities could be.

So, when the storms hit, we have the right stuff with us, and that type of thing to me, that is the most critical part of. So how remodeling companies can distinguish themselves and what the consumer really can be looking for. It’s like, think about where you’re headed with this project. Have they been there before?

Are they telling you, are they preparing you the right way? To me, that’s a, a really big deal. And I think that got better during this period of time

With the impact of what you all just discussed, is now a good time to remodel?

It’s so hard to predict certain things, right? I mean, certainly, some costs have gone up, you know, and, and I think there was a spike in some areas and some of that came back in most markets in line. But, you know, I think choosing the right remodeling company is very, very important.

I also think moving the project forward, determining if that’s something you want to do between product delays and the surge of business activity. It’s great when remodeling companies can do a great job setting customer expectations.

I always like to talk about the characteristics of a good project, right? If we’re talking about that with the customer upfront. It’s going to depend on how clear we are and you know, what, what you’re trying to accomplish, how quickly and not to be rushed, but that you can, you know, make selections and things that are going to really make a difference.

You talked about the process and why that’s important, but what should homeowners be looking for when they go to find that remodeler? 

It can, so it’s like anything else, right? I always like it when people reach out to people, they know. We see a lot of really good conversations coming out of some of the most social media neighborhood groups and things like that because of people. Tend to tell good stories. You know, I think places like some of the online searches Google reviews and things like that, or a good place to get a sense of what’s going on with somebody you know, the website tells a piece of the story.

I think it’s got to be a good relationship. So, I think the sooner you look at that company and say, well, what are their values? And, and not just the eight or 10 things that get listed on the website, but things that you can tell just by looking at what they’re doing, what their involvement is in the community, how long they’ve been around, they have a physical location, all those things lend themselves to a company that’s stable. That’s done this before for certain types of projects. I think it’s really helpful. If you can see those kinds of projects having been done, you know you don’t want to be anybody’s experimental

How about red flags? Any big red flags consumers should look for?

One is if they don’t really have that clearly defined process because again, some of it is the benefit of clearly defined processes. We know when we’re getting off track, right. If we know how long things are supposed to take or what the right sequence is, that’s super important.

When you ask for references or you look at reviews and they’re very obscure as to who the reference is, or, we’ve got two names and, one of those, the same last name as the owner.

I think a good remodeling company not only tells you what they’re going to do but starts to demonstrate it from the very first meeting. Meaning companies that come in and ask questions. They take notes while you’re answering those questions and then refer back to why you’re doing the project in their proposal.

To me, those are all things that say you didn’t just tell me you’re going to listen and communicate well, you’ve already shown me. You’re going to listen and communicate well. So, I think really in that first meeting or two, there’s a lot of little clues as to whether or not this person is telling you what the experience is likely to be or show.

When you get a sense of, I hear what you’re saying, but you’ve asked me that question three times, or no, no, no, we’re doing this because the kids are moving out, not moving in, or the grandkids are moving in. And those to me are like, if

Where do you think the industry is headed?

I think really 2022 and 2023, we’re going to see strong demand. Product availability is going to start to slowly improve. I think the byproducts in process improvements will kick in and I’m really hopeful we’re going to see more of the job market get back to work. In 2022 and 2023 people need to be really focused on strengthening companies, getting that structure that they know they’re going to need training and development, getting the right people in place.

I think once we get out to 2024, we’re probably going to see, and again, it could be a little bit later, maybe see things level off a little bit. You know, we may see some consolidation in the industry. But I don’t foresee it being like we’re going to fall off a cliff. I think it’s going to be just more maybe the surge becomes a little bit more level.

I also think we’re going to see more companies doing more specialized work. It’s very hard with a flow of work and the capacity of work for, for some companies, not all companies, but to do as many different things. And I think we may see that there are going to be some folks out there that are going to really find their niche, which for the right consumer could be really, really helpful.

The biggest thing is I think companies just need to be clear on what it is they want to be because that’s the hardest thing for the consumer. If the business owner can’t tell me who they are, it’s really hard for me to distinguish myself why you’re different. Why should we be working with you and who you are?

And so, the clearer you get on that message, whether it’s a broad range of things, a specialization, certain way of doing things, the clearer that is that the customer, the more likely the right consumer finds the right remodel.

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