Concerns
I have three concerns for 2023.
First is that we might have a sales slowdown. We’ve been using our busy times to build our backlog as much as we can. When sales are slow, you end up trying to sell from a stance of desperation, and that makes it more difficult.
The second concern is there are going to be some local home builders jumping into our market because although growth might be slowing in remodeling, in the new home industry, it’s a real downturn. We see that every time with local home builders.
If you asked them three years ago, they’d say, “I hate remodeling, don’t want to do it.” And then next year, they’re going be remodelers. And they’ll undercut us because they don’t know what they’re doing.
The second concern is there are going to be some local home builders jumping into our market
The third concern is these supply chain “surprises.” I think there’s still going to be more of them. And it’s not the supply chain issues when we know the cabinets are going to be 15 weeks, instead of eight, and we plan on it. It’s those surprises when we’ve started the job after being told that the elevator cab is six weeks, and then, three weeks into it, we find out it’s actually six months.
RELATED: 2023 Game Plans: Larger Remodelers Benefit Most as Lead Times Shorten
Opportunities
As with the three concerns, I see three opportunities for 2023. With inflation, we can get hurt when we have long-term big contracts and prices go up. But in a slowdown, pricing goes down or stays the same. That’s an opportunity to produce a little more profitably, which is good.
Next is the subcontractor and supplier environment. When new homes are going crazy, our business is a drop in the bucket, but when new homes are in a downturn, then the suppliers and subcontractors love us again. That’s something we should take advantage of.
Third is the labor market. We’ve been looking for a director of HR for a while, and a vice president of production. We’ve had situations where good people are poached from us, and we’re continually going back to them with more and more money. It’s been an employee market for long enough now that being an employer market is a good thing.
Read all 2023 Thought Leader predictions and game plans here