Need verses Want Remodeling
When the great recession hit in 2007 -08, RIGGS Company & Design was rolling along with a nice annual revenue which represented about 50 jobs each year. Maybe 30 of them were small jobs for past clients and friends of the company, and the rest were within a range of $50,000 to $400,000 each. Just about every year, just two jobs would generate at least $1,000,000 in revenue.
Today, times have changed. While I didn’t haul out the books to get exact numbers, 2009 brought a much larger number of jobs completed, but each with a smaller price tag. Overall, we did about 80 jobs and it took our 6 largest jobs to reach the one million dollars mark. We knew this last year was going to be down in volume and we expect next year to be as well so we were prepared for it and are doing quite well, thank you. But it speaks volumes about what the remodeling indsutry is dealing with – and that is a need verses want mentality in the market place.
Three years ago people wanted a new kitchen blending into a family room addition with a master suite above. Today, they need upgrades and repairs done. It could be based on the need for new windows and more insulation to keep their utility bills down as opposed to wanting the latest and greatest style. Whole house remodeling and additions were popular before the crash because people could stay in the neighborhood and still get what they wanted. Now they are settling for scaled back projects like a new kitchen and a face lift in the powder room. Many of our projects are repairing damage that is worse than it would have been if caught early. But people are even deferring some projects like caulking, painting and weatherproofing until the damage becomes so obvious that something has to be done.
Some clients did choose to do large remodeling projects last year but as the numbers above suggest, they are fewer in number than I’ve seen in forty years. I’ve seen some “slow” times before but never for this extended period of time and very few economic prognosticators are calling for this economic situation to end any time soon.
Moving towards a smaller scale, need-based project type calls for a different system of production for remodeling projects – and at RIGGS we’ve responded to that shift well. Our average sized job used to take a crew of three carpenters a month to get under roof. Then, while the mechanical trades, drywall work, hardwood flooring and painters were getting it ready for our trim carpenters; our framing crew would be working outside on siding, exterior trim and a deck or other such structures. Although our Mission Statement and dedication to our clients hasn’t changed, we’ve learned to become much leaner and efficient on smaller projects. Now, many of our projects take one or two men a week to demo and make ready for the other trades and they are moving those trades in and out at a much faster rate. A schedule for projects such as kitchens or bathrooms is much faster paced, but the same trades are needed as would be for a huge addition.
We have the same project managers and crew as we’ve always had and they have adjusted to this new type of work very well. I think they all long for the bigger projects where they get the opportunity to form lasting relationships with our clients and all the trades aren’t piling on top of one another; but they know that need verses want remodeling is the driving force in the market and will be for some time to come.
