How a N.J. Remodeler Turned Market Challenges Into Business Opportunities
Demand for professional remodeling services is now higher than ever. But even in a post-pandemic market, remodelers continue to face an evolving set of challenges requiring them to adjust many aspects of how they do business.
Educating clients, drafting proposals, ordering materials, juggling (delayed) deliveries, and scheduling inspections: Just a handful of steps that have gotten increasingly complex over the past two years.
Knowing how and when to make the necessary adjustments to one's business is the tricky part. For Alan Archuleta, CAPS, CGA, CGB, CGP, CGR, GMB, president of Archuleta Builders in Morristown, N.J., having a network of experienced colleagues to lean on for guidance is just as critical for his business today as it was at the onset of the pandemic.
"I have a very small staff, so the relationships I've built with my fellow members at the [New Jersey Builders Association] and through NAHB Remodelers have been critical for my business, especially in those early months [of 2020]," Archuleta said. "We talked about everything – PPP loans, new safety policies and regulations, additional contract language, sick leave, etc. – so many things that I might have otherwise overlooked without the help of my fellow members.
"Really, the strength and networking aspect of the association not only helped my business get through it, but thrive as a result."
Today, Archuleta says there is one word that drives much of his business: transparency. Through his own experiences and with the helpful insights of some of his colleagues at NAHB Remodelers, Archuleta has learned one of the best ways to compete against climbing inflation and lingering supply-chain issues is to be as open and direct as possible with his clients.
"Every… single… thing costs more nowadays, so I know I need to be very detailed and candid in my proposals," Archuleta said. "Good clients know that I need to make enough profit to stay in business so that I can provide the highest quality of service and warranty my work. So if I'm transparent about how much things will cost and what my margins are, there are no games and it gives my clients more peace of mind."
Educating the client is something Archuleta has been doing his whole career, but with some helpful tips and strategies from his fellow members, he’s learned how to make it a more productive experience for both himself and the client. This helps set expectations early on and ensure he has their buy-in before the project begins.
Archuleta is confident that while other contractors might give estimates that are notably lower, they are almost always failing to consider a variety of new variables that will drive up costs and potentially derail a project. In those situations, he offers a word of caution:
"Anyone who hires the cheapest guy out there because their estimate was way lower than others, be careful because in this market, they will change-order you to death," Archuleta said. "The market for materials is crazy right now, so they will inevitably come back and tell you it’ll cost more money, or else it’s highly likely they won’t be able to finish what they started because they can’t survive on such small margins. Plus, they won’t be able to warranty anything."
Archuleta has learned to anticipate certain cost fluctuations based on what he hears from other NAHB Remodelers across the country, just as they benefit from the experiences he shares with them. For example, Archuleta said his plumber and electricians have raised their rates several times over the last year because of the cost of PVC and copper, high demand and limited availability of many other products.
The value of membership was not something Archuleta immediately realized early in his membership, he admits. But once he eventually started attending more events and engaging with other members, he quickly saw the results.
"What’s truly helping my business is the collaboration I get to have with some of the most successful remodelers in the country," Archuleta said. "I now have a huge network of industry leaders, mentors and friends that I stay in touch with and learn from on a regular basis throughout the year.
"I can say with 100% certainty, the investment of time spent learning from and engaging with other members will provide returns that you just can't get anywhere else; It’s a no-brainer."
NAHB offers a wealth of user-friendly resources for remodelers and HBAs as they look to promote National Home Remodeling Month in May. Customizable press releases, articles and public service announcements are all available in a consolidated tool kit. Visit nahb.org/remodelingmonth for more information, tips and resources.
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