CG Report - 09/10/2009 (Plain Text Version)

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Jeff Hunt, CGR, GMB, CAPS
Chair

In this issue:
Chairman's Letter: 2009 -- The Year of Survival
Remodeling Market Activity Builds Momentum
10 Tips on Managing Cash Flow—Read Now for 4 Free Bonus Tips!
On Mentoring
Beyond the Best-Case Scenario: Positioning Your Company to Take Advantage of the Downturn
CGR Board of Governors
FHA 203(k) Loans Used to Remodel Foreclosed Homes
Valuing Membership
Fall Board Preview
NAHBR at the Remodeling Show
CAPS, CGR and CGP Courses Offered at The Remodeling Show
EPA Expands List of Lead Paint Trainers
Have You Applied to Be Remodeler of the Month?
Upcoming CGR Classes
Thank You to Our Sponsors!

Chairman's Letter: 2009 -- The Year of Survival

In addition to the wide range of data that is available to our segment of the residential construction industry, one of the more interesting things about being heavily involved in the NAHBR is the amount of contact across the nation with other remodelers. When I have the opportunity to visit with colleagues around the country, I have been noticing a common theme. Things are starting to look up!

Especially in the design/build end of the business where a project cycle can range three to nine months, it seems like it has taken a while to realize how big a hit the industry has taken. While there were a lot of projects in production, it is easy to take our eyes off the pipeline of new opportunities. But if you follow the NAHB’s Remodeling Market Index (RMI), you know that this important indicator has shown the slowdown many of us have experienced over the last 12-18 months. At our company, we were feeling pretty flush over the last few quarters given the number of opportunities in our pipeline. And it’s really easy to feel good when you have a number of large projects underway. Then one day you look up and realize that many of the deals you are working on have been affected by the credit crisis, the price of a barrel of oil (in Houston), uncertainty in the financial markets, or any one of a number of factors. The point is that homeowners are tentative and it has been harder and harder to get a prospect “across the finish line”. Those of us in the energy and agricultural states have taken a longer time to see things slow down. Traditionally in Houston for example, we have not experienced the wild ups and downs that other areas have seen. The conventional wisdom is that we are typically more stable than other parts of the country. But even here, we have seen increased competition from other firms who have relocated here, as well increased pressure on margins.

So what is one to do in response to market conditions like these? First and foremost, I believe those of us who carry the CGR credential have a HUGE advantage. I always make it a point to highlight our credentials and while I will not disparage a competitor, whether they are a CGR or not, it sure is a compelling argument when the other guy does not carry the industry’s leading credential. In Houston we have around 40 CGR’s but over 4,000 “residential contractors”. So while it is still somewhat rare to run up against another CGR, we also recognize how little market penetration we have. Let me ask you this – would you rather compete against “Joe Pick-Up Truck” or another similarly credentialed professional? Personally, I hate competing against the guy that does not know how to run a business or price a job properly!

Secondly, now is the time to learn how to religiously track and critically evaluate our pipelines. Many great tools are available for this, but it must be done, and done often so we can evaluate where to best concentrate our efforts. In times like these, many times the winning firm ends up being the one who has the maintained the strongest contact and been the most responsive to the client during the proposal phase. Don’t be guilty of reducing all that you have to offer as a professional to the issue of price! Remember we are not delivering a mass produced product, but rather a highly customized level of service. The training and continuing education required of the CGR designation is meant to develop a keen sense of professionalism and business savvy, not how to tape and float drywall better than the next guy!

So the good news is that across the country, the RMI is pointing to better times ahead. If you have survived thus far, know that things are headed the right direction, and be thankful that you availed yourself of the knowledge and expertise that is distilled within the CGR designation. Now go out and promote the CGR credential to you customers and to your competitors. By doing so you will be helping the industry and, in turn, your own business!

Jeff Hunt, CGR, GMB, CAPS, CGP