The Future of an Industry

Have you ever wondered how to truly stand out among the competitors who are offering similar types of services, and become more successful? Are there ways to collaborate with other trades and other builders and developers that can improve your position with not only each of them but also your customers? This article explores those questions and even addresses regulation changes, abundant growth opportunities and tips on becoming the in-demand contractor in your market.

After a career in the fashion industry, Stefanie Coleman took what some might think of as a dramatic turn and became the founder and owner of Pretty Smart Homes in St. Thomas, Ontario. At the time of this writing, she is also President of the Canadian Home Builders Association and has 15 years of experience as a renovation contractor. In that time, she has faced many challenges and misconceptions that are common in the renovation business. Two strategies that have been immensely successful in her ability to overcome them have been the creation of a unique and profitable pricing process and systems that deliver exceptional service throughout.

What Are the Top Challenges for Renovators?

Working in renovation contracting is complex. There are many challenges that require careful attention and regulatory changes are among the top concerns. The regulations affect everything from interactions with other trades to compliance with building codes. They impact taxation, human resources, staff management, health and safety management, as well as interactions with clients and suppliers. Then there are the complexities of design, building science and unintended consequences, understanding each construction site and managing a supply chain. Every one of these areas requires efficiency for smooth business flow.

In Ontario, there is a major positive change for contractors in the Prompt Payment Act. Specific guidelines dictate when owners make a payment and the amount of time allowed between receipt of an invoice from the sub-trade or the sub-sub-trade and making the payment. Enforcement of these payment regulations gets complicated when there are grievances, complaints or incomplete work. This Act will enable trades to help themselves get paid faster and boost cash flow. When the whole payment pipeline is put into place, starting with the homeowners’ payments, it will benefit everyone involved.

Another challenge that is less easily resolved is a labour shortage due to retirement, business and industry growth, and misconceptions about the potential opportunities in trades.

The magic factor: positive relationships with trades

One of the biggest keys to success in contracting is to build a positive relationship with your trades. They are usually busy with larger volume jobs like new home construction, so it’s a competition to get the right trades to work with you.

Here are some tips that Stefanie used with great success in her business. First, she made it a habit to pay the trades within a week of receiving their invoices. Everyone else is trying to maximize the amount of time they can delay paying, and when you pay quickly, your trades notice and appreciate it. Secondly, she treats the trades like one of her own teams by taking care of them, being considerate, respectful and helpful. Make it more irresistible for them to work with you… more so than anyone else, and that will automatically give you an edge at being more successful. If you can’t get the best trades on your site, you’re in trouble!

Will the next generation train in the trades?

The reason for getting the best trades on your side matters is because there is an estimated shortage of over 130,000 jobs in the trade industry. Currently, the average age of framers, carpenters, bricklayers and other tradesmen is between 50 and 67 years. Who will fill their shoes?

The potential for a lucrative career is real. There’s a widening gap in the impartation of the older, retiring tradesmen’s and (building inspectors’) skills to the younger, inexperienced tradesmen who have book smarts but less applicational knowledge. Going forward, quality tradesmanship will be in high demand and depending on your location, the perspective of a career in the trades varies.

For example, in Germany, trades such as carpentry are respected careers, while in other countries people underestimate contracting and the difference it can make when it’s done well. If you happen to be in an area where the supply of skilled tradesmen is thin, it’s even more important to get and keep the best ones to favor you.

High quality work gives your customer a wonderful experience and provides a high standard of service throughout the process. You deliver a tangible feeling of security, comfort, and reliability in using and occupying the building you worked on. It’s a feeling that lasts a long time and will always send more business your way.

Legitimate contracting versus casual, cash-driven contracting

Legitimate contractors work hard, spending time and money to comply with health and safety regulations and building codes, only to be undermined by illegal contractors.

In Canada, the Canada Revenue Agency and the Canadian Home Builders Association partnered to fund educating homeowners about underground contractors. This led to the development of RenoMark, a website and association where members of the Home Builders Association can join to be certified as Renovation Contractors. RentoMark is about operating according to a code of conduct that sets renovators apart from illegal or underground contractors.

The CRA is tracking down illegal contractors, thanks to a court order that made hardware stores like Home Depot release their contractor account information. They cross-reference that with businesses who have CRA numbers and who are filing taxes. The CRA can also access building permits which will show who is doing contracting without paying the required taxes. This is positive for legitimate contractors — the standard of the whole industry will improve as illegal contractors either level up or get caught.

Raising the bar of professionalism in contracting

As a contractor, you must step up in every aspect of your business to project the right message and correct the negative perceptions of trades. Consider your presentation. Does your team look professional and clean? Is your truck washed? Are job sites kept clean and neat? This all affects what the consumer sees and the judgements they make.

Cultivate a business mindset and aim to operate as professionally as you can. Put the appropriate policies, processes, procedures and systems in place. Work on training and developing leaders in your team so that you can get free of your business, working on it, not in it.

Contracting and trade opportunities at present and in the future

There are so many lucrative opportunities in this field and many young people move into the trades after studying at university because they couldn’t build a career in their chosen field. The working world is so fast paced — 45% of today’s jobs will cease to exist in 10 years. In contracting, there will always be homes to maintain, repair, build and renovate.

Technological changes bring manufactured housing onto the scene, but humans are still needed! There are currently 13 million homes in Canada of which only 1% are considered to be new. All new homes must be built to Net Zero Energy Ready standards by 2030 or 2032 according to the Pan Canadian Framework Agreement. Existing homes and buildings will also need renovations to improve energy efficiency and reduce greenhouse gases. Three major federal parties (the conservatives, liberals and the NDP) partnered to create an incentive program that addresses this goal.

The other 99%, the older homes, will also need work as the homeowners age. Most homeowners want to age in-home rather than move to a frail-care facility, but most homes are not suitable for this. The Canadian Home Builders Association and the US National Association of Home Builders implemented a certified aging-in-place program (also known as C-caps). This certifies contractors in doing this particular type of renovation in collaboration with other relevant professionals.

The job market will change drastically, but there’s hope with such lucrative prospects on the horizon.

A profitable pricing process

Here’s another tip — consider charging for your pricing process. Stefanie spent six months creating a pricing strategy that dramatically increased her closing rate with better clients.

Quoting for a renovation or construction project takes time, knowledge, measurement, research and designing of concepts. It’s like a consultation — a service that most other industries charge for. Once you’ve met with the client to determine whether you’re the right fit, implement a paid-for quoting process that adds value, demonstrating your experience and expertise.

The benefits of this process include:

· The ability to copy the quote into a contract

· Having the whole project worked out ahead of time

· A more reliable way to finish on time and eliminate mistakes and last-minute changes.

· Ordering supplies on time, eliminating costly surprise change orders.

· Avoiding the typical negative situation of taking too long on the job and going over budget.

You’ll waste less time on estimates for jobs you won’t get and focus more on the clients who are willing to pay you what you’re worth. Your closing rate increases along with your income, because this process also attracts larger job projects with more details.

Stand out from your competitors by doing something different. Buyers will trust you and feel comfortable because if they see you take a detailed approach to quality control from the start, they’ll assume that the rest of the job process will be of the same standard.

Get certified, get more opportunities

Contracting, renovation, and trades are full of opportunities. The older generation is retiring. Technology and regulations are improving the standard. There’s a variety of work, from retrofitting homes to making them suitable for aging owners.

If you’re a renovator, consider joining the Home Builders Association in your area and becoming a certified RenoMark Renovator. This helps clients find you! If you’re a general contractor, keep being professional and raise the bar wherever you can.

For more helpful information to increase your success as a contractor, head over to 4 Level Coach Website to listen to the full podcast interview with Stefanie Coleman. You’ll also get access to more helpful content on entrepreneurship in the contracting industry!