There is a significant amount of pressure for new-construction builders and subs to move into the remodeling and renovation markets.

My concern is that, because of this pressure, Pacific Northwest new-construction contractors are impulsively making the switch even though the region’s market is remaining consistent. Sure, we experienced significant slowdowns; however, unlike much of the US, the outlook is promising. We may not see the overheated building we experienced over the last several years, but we will see building as well as significant population growth.

Reconsider.

With this information in hand, I encourage new-construction builders thinking about switching over to thoughtfully reconsider.

Will you have adequate referrals?

More than 75% of the business that renovation and remodeling contractors receive is through referrals. Have you built up this kind of referral base?

Do you have the resources to rapidly penetrate an established market and compete against established companies?

The remodeling market in the Seattle area has remained strong. Established companies are not experiencing the business drought that may make them susceptible to new competition.

They’re prepared. Are you?

Many local remodeling and renovation companies have been expecting the influx of new-construction contractors; they’re prepared and entrenched. In most cases, new providers actually benefit established companies as it allows them to contrast their expertise with “the new guys.”

Renew your view.

If you’re a new-construction builder, my advice is to look at the bigger picture before spending significant resources and cash on market repositioning. Business growth and stability are still a reality in the Pacific Northwest!

Tips:

Rather than switching over, establish a scaled-back building schedule and improve project management and inventory-availability timing. Also take advantage of decreased materials costs, expanded offerings, etc.

This is exactly what you need in order to not just survive in 2008, but be very successful.