Calling someone a turkey means they are inept, stupid or a goof. It’s also a generic name for things that fail. For decades, a Broadway flop would commonly be referred to as a turkey. You can be forgiven for calling 2020 a turkey of a year, especially if you’ve kept a business afloat despite all that’s happened in the last nine months. It’s been a wild ride. And it’s not over yet.
Home Improvement Is a Clear Winner
Turkey doesn’t begin to convey the pain and stress experienced by thousands of restaurant owners around the country. The same is true for brick-and-mortar retailers, Uber drivers, airlines, hotels, cruise ship operators, musicians, actors, owners of live music venues, movie theaters and theaters of all kinds. Whole segments of the economy have been shattered by COVID-19 restrictions. To them, 2020 is a disaster.
This holiday season we can be grateful for the surging demand for home improvement and a solid forecast for 2021. If you own a remodeling or home improvement company or if you are employed by one, chances are you’re having a good year. Despite the many challenges, long hours and worry along the way, finishing with a profit of any kind counts as a win.
Across the country, thousands of second-, third- or fourth-generation family businesses have been closed. Those owners are coping with the loss of a business that had been the family’s pride, its income and its legacy for future generations. This is much less the case with remodelers and home improvement company owners.
From our many conversations with remodelers as well as from surveys of our remodeler-readers, the QR editorial team knows the high level of fear and near panic March and April. And we know that ultimately the fear morphed into relief and to positivity in May and June.
Many remodelers bounced back quickly. Some, like Dreamstyle Remodeling of Albuquerque, N.M. reported record months in May. Some, like Power Home Remodeling Group initially took their lumps by shutting down for a period of time and came back strong after. Power furloughed the majority of its 2,700 employees, then hired them back and were able to hit the ground running again on July 1.
Reasons to Be Grateful
So now it’s time to talk turkey. As compiled by QR editors, here are key reasons why 2020 was anything but a turkey for remodelers.
Residential Construction Deemed Essential—When California issued its first-in-the-nation Stay-at-Home order on March 19, it was not clear that remodelers and home improvement companies would be deemed essential. When the dust settled in California and most other states, the verdict was clear, our businesses provide essential services, even when everything else is locked down. This is an important precedent going forward. Our industry needs to remain open and productive even during a global pandemic. At the time, this determination of “essentialness” gave remodelers and home improvement companies a lifeline, the ability to keep operating and to seize upon the opportunity offered by the following surge in home services.
The CARES Act—Passed on March 25, the Coronavirus Aid, Relief and Economic Security Act supported businesses and workers with $2 Trillion (with a T) in direct aid. It’s worth going back and reading attorney D.S. Berenson’s analysis of the legislation when it passed. Berenson’s article highlights all provisions of the act, some of which can still be utilized beyond the Paycheck Protection Program funds, which were accessed by a high percentage of firms in our industry.
PPP—The massive Paycheck Protection Program, part of the CARES Act, enabled small business owners to receive forgivable loans for keeping their lights on and for paying its employees during an eight-week period. We know this worked for remodelers. In August, when the Treasury Department released the names of companies that had received more than $150,000 from the program, QR was able to determine that 3,101 remodelers and home improvement companies were on that list. Further, we were able to calculate that more than 83,000 jobs at remodeling firms had been spared due to the availability of these funds. Later, the “covered period” for having a PPP loan forgiven was expanded from eight weeks to 24 weeks. Berenson analyzed the implications of that significant change here.
Virtual Selling—Three years ago at TOP 500 LIVE remodeler Mike Damora the folks from One-Click Contractor were on stage touting the efficacy of making sales presentations 100 percent online—never setting foot in the customer’s home. You can see a video of their presentation here. It was a pretty fringy concept in 2017, but this past spring, we all quickly learned that it could be successful. It had to be. Remodelers and home improvement companies flocked in droves to this webinar and others on the subject. There was a lot to learn about selling online. It required a lot more skill and discipline than face-to-face selling. By early May, marketing consulting firm, Socius, reported having built virtual-selling inquiry pages for 200 contractors in just a few weeks.
PPE—Many remodelers went into the pandemic with a good stock personal protective equipment like masks, gloves, face shields. Some even had access to respirators for working in confined spaces. During the initial days of the lock down, it was lucky to have scarce PPE on hand in order to quickly finish some jobs in progress or to safely visit with our clients. Many remodelers with excess PPE also donated N95 masks to doctors and nurses who needed them more. In giving you often receive.
The Importance of Home—Home has always been important to Americans. After all, a home is commonly referred to as the American Dream. But our connection with home deepened quickly and dramatically this year. Not only is it our home for family meals, but it is now our workplace and our children’s school. With travel and eating out curtailed, there is evidence that those surplus dollars were redirected into home improvements. Home Advisor’s recent study of 5,000 Americans confirms this phenomenon and goes some way to quantifying the impact. There were increases in bathroom improvements, outdoor living and home offices, just to mention a few types of projects that remodelers report seeing gains.
The Efficacy of Remote Work—All businesses, not just remodelers, realized how effective workers can be when working remotely. Whether your company uses Microsoft TEAMS as a video interface, or Zoom, or any number of video conferencing and screen-sharing technologies, by and large the technology was proven as a means to keep businesses moving when in-person work was discouraged for health and safety reasons. Field and sales staff could stay in the field. Managers could keep things going from home. Now that there is promise in new vaccines, many owners see a long-term shift toward remote working. This will enable them to potentially lease less office space and to potentially scale-up faster when new people are brought onboard.
The Adoption of Remote Training—For all of the reasons that working remotely has proved quite effective, so too has the ability to offer training to our workers online. We learned new skills along the way—ways to make virtual training more engaging and more memorable. Long-term there will be some savings to be found in ongoing efforts to keep your teams connected and up-to-date with their skills.
There are many other business reasons why remodeling and home improvement have a lot to be thankful for this year. Please take a moment to add them in the comments below. We’d love to hear others. QR