Editor’s Note: Entrepreneurs Are Reshaping Remodeling
authors Patrick O'Toole | August 6, 2021
More than a decade ago, we made a tough decision to leave a particular large home improvement company off our annual TOP 500 list because its services were focused on improving outdoor spaces. At the time, we thought its specialty was outside the realm of both remodeling and home improvement.
Two years later, when many of our readers broadened their offerings to include the same services, we learned two things. First, we were wrong. Indeed, the growing sophistication of outdoor spaces increasingly required the skills of general contractors. Second, we learned our lesson about applying old definitions to new firms.
The world no longer works like it once did. Remodeling is evolving. Entrepreneurs like you are responding to the changing needs of clients. Specialization continues as a major trend. Longstanding industry stalwarts, along with fast-growing new startups, are developing new niches.
In addition to the now fully fledged outdoor living niche, firms today are adding very technical offerings like solar power, home controls and building science, among other offerings. Many are innovating within existing offerings. There has been a rapid expansion of the bath-replacement niche in recent years.
Today, more single-line firms are now strategically evolving their mix of offerings. Window and replacement baths together in one firm is a model that has exploded. As you read this 43rd annual TOP 500 edition of QR, it becomes increasingly clear that entrepreneurs are reshaping remodeling.
We are proud of the list because it defines a sprawling, coast-to-coast industry at a specific moment in time. That moment in time for this ranking is Dec. 31, 2020—the day books closed on the most tumultuous and transformative year since the conclusion of World War II. Looking back at the end of 2020 from the distance of eight months, I marvel that several hundred remodelers had the time and wherewithal to complete our application and verification process.
The year had every type of business condition: bullish optimism at the start, a shocking stay-at-home shutdown, a flood of trillions in government funds for businesses, overwhelming levels of business uncertainty, and strange new safety protocols and social distancing.
In May, there came an awareness that a boom in home improvement was underway. Indeed, a race was on for qualified labor and for scarce building materials. Then add a presidential election to the mix. Many firms sustained deep losses but finished the year back on their feet and running hard.
There are some clear takeaways from this year’s TOP 500. First, many full-service and design-build firms did not grow year-over-year. As a result, some firms that normally apply for the TOP 500 did not. Second, revenue forecasts among this group for the current year are way up, exceeding 2019 levels. Companies are racing to keep pace as backlogs grow.
Lastly, new companies with new business models are emerging. They represent an exciting vibrancy and offer a glimpse of the shape of things to come. In August 2020, our black cover signified the pandemic moment. This year we offer an accurate version of the industry’s current moment, growth literally everywhere across the U.S. QR