A recovering economy is great news for the majority of Americans, though for many remodelers, it is a sign they might need to adjust the way they do business … again.
The economic downturn forced remodelers to adopt new strategies to survive in a changing market — strategies that generally led to sustained profit growth.
The newly released 2017 Remodelers’ Cost of Doing Business Study shows that the average gross profit margin for remodelers increased from 26.8% to 28.9% between 2011 and 2015. Average net profit margin increased as well, rising from 3.0% to 5.3% during that same period.
Now that spending is back up and consumers are increasingly interested in buying new (or newer) homes, remodeling expenditures are likely to grow at a more gradual pace than in recent years, according to comments made in January 2017 by National Association of Home Builders economist Paul Emrath during a press conference at the International Builders’ Show.
That means remodelers will have to identify new ways to maintain their share of the market.
“Pacific Northwest consumers are tech-savvy and community-minded,” said National Association of Home Builders Remodelers member Joseph Irons, CAPS, CGP, GMR, a remodeler from Shoreline, Wash. “We’ve reduced costs while growing our business by focusing on social media outreach and community service over traditional advertising.”
The Remodelers’ Cost of Doing Business Study assesses the growth, viability, and demographics of the remodeling industry. The 2017 study was conducted through an online survey sent out to 5,700 residential remodeling/rehabilitation firms across the country in the spring of 2016.
The full study is available for purchase at builderbooks.com. National Association of Home Builders Remodelers members are eligible for a 20% discount off the member price.
The home building industry is made up mostly of entrepreneurial, family-owned businesses. Builders need to plan for the implications of a sale or transition of their businesses to the next generation of leadership.
Succession planning allows owners to adequately leave their businesses to other family members. In the Succession Transition: How to Plan for a Successful Outcome webinar, Wednesday, Oct. 19, 2-3 p.m. ET, learn about the business, tax and personal considerations that should be weighed for a successful business transition or retirement. Discussion will also include what is needed to prepare your business for transition or sale.
NAHB members enjoy discounted registration rates.
Participants in this webinar will able to:
- Examine why and how a succession plan can help you in achieving the best economic outcome for your business.
- Identify the key factors to evaluate as you are considering exiting your business or planning for retirement.
- Explore the actions you need to take to be best prepared for your business to be transitioned or sold.
Steve Hays, Partner-In-Charge, Home Builder Services Group, Rubinbrown LLP
Mark Jansen and Chris Coleman, Partners, Construction Services Group, Rubinbrown LLP
Get an inside look at building industry employee compensation trends across the country with the newly released study conducted by the National Association of Home Builders Economics & Housing Policy Group: The 2014 Single-Family Builder Compensation Study.
Published by National Association of Home Builders BuilderBooks, the study provides compensation and benefits data for 39 common positions at single-family home building companies. The study shows average total compensation and the prevalence of benefits offered to each position by:
- geographic region
- 2014 dollar volume
- number of single-family units started in 2013
- number of employees on payroll
The study is based on data collected in July 2014 from builders across the country. It’s divided into two sections that present the survey findings from different perspectives:
Compensation and Benefits across 39 Positions—a broad view of the full-time positions at single-family building companies as well as a comparison of total compensation and benefits across positions.
- Compensation and Benefits by Position—a detailed view of each position’s average compensation and benefits.
- Results from this survey provide single-family builders with up-to-date information that can be used to benchmark their employees’ level of compensation and benefits.
The 2014 Single-Family Builder Compensation Study is available at BuilderBooks.com or by calling 800-223-2665. It costs $79.95 for National Association of Home Builders members and $149.95 retail.
The eBook format available at ebooks.builderbooks.com allows readers to view the study directly on their computer, iPad and Android. The price: $55.99 for National Association of Home Builders members, $89.99 retail.