Basic remodeling projects have not changed dramatically in recent years, but consumers have changed and so has the way we remodelers think about our business. The need for better business acumen is critical, and the demands on marketing, sales, and other strategies we use to stay in business are stronger than ever. But there is another significant element that will influence not just your business but the whole remodeling industry: the government.
There’s a new sheriff in town, and for most “cowboy” remodelers, just the thought of the increased government influence in the remodeling industry causes negative feelings. Remodeling business owners are entrepreneurial types who prefer that their success or failure be dictated by their actions; they don’t like the idea of being “handcuffed” by more regulations.
Regardless of how you feel about more government involvement, it’s here to stay. But, like many things in life, it’s a double-edged sword. On the positive side, there may be opportunities for growth tied to government programs and consumer incentives. On the negative side, additional government regulation may create more stress for your business and your clients. The following are some pro and con examples that warrant your attention.
Legal Hurdles
The national Do-Not-Call Registry, established several years ago for both land lines and cell phones, made it more difficult to reach prospective customers, and the Do-Not-Mail movement could do the same for print media marketing. Similarly, some states recently made it harder to keep from treating independent contractors as employees, and the Internal Revenue Service has stepped up efforts to regulate reimbursement for mileage and other expenses. Plus, recently passed health care legislation may affect the benefit package you provide to employees.
Finally, for those who have been hearing about the lead paint issue for years, waiting to see what would be required, the law is now in place. The rules, which go into effect April 22, 2010, require your company to register to be certified by the Environmental Protection Agency if you work on homes built before 1978. You’ll also need to certify at least one employee — more likely several — through an eight-hour training class. Additionally, projects will need to be tested. Lead-safe practices are not rocket science, but they add another layer of complexity for you to contend with.
The point is that all of these developments tend to not only increase costs but make remodeling more about the business than the craft that is your passion. Some remodeling companies may surrender and close shop, but there is also the possibility of more rogue businesses attempting to fly under the radar.
Tax Incentives
On the more positive side, some government programs can spur business growth. Last year’s stimulus plan still provides incentives that may be what moves prospects out of the holding pattern and into a decision to buy. And more energy-based incentives are in the works in the jobs bill. Plus, the recently extended tax incentive for first-time home buyers will boost remodeling activity (studies show that most home remodeling dollars are spent during the first year of ownership).
Although less publicized, the government also has grants and programs for training, and investing in your team’s continuing improvement will be critical to your future success. Many of these programs vary dramatically from state to state, so spending some time researching them may be fruitful.
The remodeling industry faces many challenges. While I do not advocate increased government involvement to solve them, I do believe that the new reality involves more regulation. Some will choose to ignore this dynamic, but a better approach is to put time and energy into developing a strategy to address it. Business is becoming more complex, not less so. That’s no reason to compromise your core beliefs and values, but neither is it a reason to keep your head in the sand.
—Mark Richardson manages The Case Institute of Remodeling, which provides business educational tools and events for remodelers. [email protected]; 301.229.4600.
