7 Reasons Your Bathroom Remodeling Business is HALF as PROFITABLE as it Could Be (with ideas to fix it!)

It’s not easy to make a buck in the bathroom remodeling business these days.

Inflationary material prices are not ‘your little ‘Fre’ (as Tony Montana – from the bloody movie Scarface would say).

Finding quality installers to do time-effective installations can be a ‘needle in a haystack experience.’

Scrounging up leads has become harder and harder (and MORE EXPENSIVE).

And if your bathroom remodeling business IS NOT as profitable (or as large) as you’d like (or as profitable as it was during the pandemic when you were as popular as a Rock Star ‘waiting’ for fans to call begging to get on your schedule), you’re not alone.

Times – and market conditions – have changed.

So, if you’re looking to improve the bottom line of your bath remodeling business you need to first identify the reasons you’re NOT as PROFITABLE as you could be, then start putting into action practical ideas to fix these problems.

And in this article I’m going to do exactly that.

I’ll identify 7 profit leaks (OK – bad plumbing analogy, I know….) and ideas to fix them. At the end, let me know which of these leaks you’re going to fix first (or add others to the list I didn’t cover). Unfortunately, there’s plenty of challenges to go around!

So, let’s dig in. 

Reason #1 your bathroom remodeling business IS HALF as profitable as it could be– Projects take too long  

It feels so good when you sign a large custom bathroom remodel. Then (after the ink dries) you need to get your customer to make selections (and hope they don’t drag the process out), order materials (and pray ‘supply chains’ aren’t a thorn in your side) and line up your team and/or subs and cross your fingers no one blows up your schedule.

And if there’s hiccups in the job, and the project drags on –you watch profits go down the drain. And to make matters worse, your customers get more aggravated with you as their frustration with their home being ‘torn up’ grows.

And as my friend Tony Hoty likes to say, “Remodelers in your home are like dead fish, they start to stink after a few days!”

So, how can you prevent the ‘never-ending-project?’ Here’s some ideas.

A fix to finish bath remodeling projects quicker   

While there’s many things you can do to make sure custom bathroom remodeling projects don’t take too long (like prebuying materials and making sure you get the deposit to cover them, so you don’t have cash flow problems), another option is to rethink the type of projects you’re pursuing.

While it’s satisfying to land the big dollar bath remodeling job, after the ink is dry you can see how the job complexity cuts into profits.

So, why not look at mid-scale to smaller bathroom remodels using products which can be systematized and installed in a day or two?

reason 1 small bathroom remodel tub to shower conversion | Innovate Building Solutions | bathroom remodeling contractors | Home design ideas | Shower conversion | Tub to shower remodel

And if you think about it, there’s a reason the biggest (and most profitable) companies in bathroom remodeling ARE NOT doing the expensive custom jobs. They’re working in middle-income projects on less ‘sexy’ (but more systemize-able) jobs which generate more profits per crew per day.

Could you become more profitable focusing on quick install bathroom projects?

Reason #2 your bathroom remodeling business IS HALF as profitable as it could be – Customer selections take FOR-EVER!

Are customer bathroom selections driving you (and your customer) nuts? They’re traveling from store to store trying to figure out what they like. They’re struggling to coordinate products and keep calling you (or your design team if you have one) for advice. Then when they ‘uncover’ prices, they get mad at YOU because your allowances were WAAAAAY TOOO LOOOOW!

The ‘fun’ (theoretically speaking) selection process can not only slow down your company’s revenue stream from ‘streaming,’ but you can make ‘enemies’ with your customer BEFORE the installation process begins when they finding their budget getting obliterated. So, how can you fix this?

A fix for the slow selection process

Wouldn’t it be nice to streamline selections AND make sure you’re not compromising profit margins in the process?

A good way to do this is with a bathroom visualizer tool. With one tool you can display easy to install products (like grout free wall panels and stone shower pans) which are easier to select than tile or stone used in custom bathrooms. Your customer can ‘see’ how their wall surrounds will look with different bases and glass doors. They can choose recessed niches at the same time – all WITHOUT leaving the comfort of their home. And to make the process even better, you can show them physical samples on your in-home appointment.

GOOGLE Don’t Make Expensive Bath Selection Mistakes – Use a | bathroom remodel visualizer | Home remodeling ideas | bathroom contractors | home bathroom contractors

When you ‘get ‘er done’ (as Larry the Cable Guy would say about product selections) quickly, you can ‘get ‘er started’ (‘er the job) even quicker. This is a win for everyone.

Reason 2 Quick Install 40 inch wide laminate shower panels | Innovate Building Solutions | bathroom remodeling ideas | Shower design ideas | Dealers | Bathroom Dealer | Shower design ideas for contractors

Reason #3 your bathroom remodeling business IS HALF as profitable as it could be – You’re ‘trying to sell’ too many people who WANT a new bathroom, but not enough people who NEED a new bathroom  

It’s easy to get excited about updating an outdated bathroom … at least until you get the ‘sticker shot’ (AKA the price!).

And given today’s inflationary prices, and high interest rates, ‘disposable’ spending has gotten tighter than a drum!

And, and I’m sure you’re aware, people who ‘want’ a new bathroom, can easily say (after you deliver the price), ‘we’d like to T.I.O. (Think It Over). Then they ignore your follow up calls when you attempt to close the job. So, how can you minimize this problem and stop chasing so many prospects who aren’t ready to buy? Here’s how….

STOP selling only to people who ‘WANT’ new bathrooms, start selling to people who ‘NEED’ new bathrooms!

While the young couple you quoted would love to fix up their old bathroom, and they got so excited about your proposal for a custom bath remodel, but when they found out their son/daughter needed braces (or the heater went on the fritz) this lead went as cold as your air conditioner! They WANTED a new bathroom, however, now they can’t AFFORD a new bathroom.

The way to improve your success rate (and closing percentages) is to target customers who NEED new bathrooms. And a perfect place to do this is in the ‘age in place’ market. When you look at older prospects who want to age in place, they can easily cost-justify a tub to shower conversion vs. living in an independent or assisted living facility (which costs about $5,500/month).

reason 3 age in place bathroom and shower | Innovate building solutions | age in place ideas | Age in place contractors | Remodeling contractors in cleveland ohio

And the other nice thing about somewhat older people (and yes, I unfortunately count myself in these ranks, even though in ‘maturity’ I’m certainly MUCH YOUNGER) is they have money to do the work. They have equity accumulated in their homes. They aren’t cash-strapped like young prospects who put their kids (sudden) need for braces before the bath remodeling project you’ve quoted them. Can you imagine that?

Reason #4 your bathroom remodeling business IS HALF as profitable as it could be – You don’t make it easy to buy

Imagine you go into the dealership to buy a new rig for the business. You (finally) negotiate a reasonable price for the truck, then the sales rep says, “Are you paying with cash, check, or credit card?”

And you think……

“Are you nuts? I don’t have $55,000 laying around and can’t ‘finance’ $55K on my credit card at 29.99% interest rates!”

Well – this is exactly the scenario many bathroom remodeling companies (who aren’t as successful closing jobs as they could be) put their potential prospects in. They EXPECT THEM to have the full cost of the remodel (whether it’s $10,000, $20,000 or $50,000 in cash and available to spend now).

Bottom line is they make it hard for prospects to buy – because most people don’t have big wads of cash laying around. So, what can you do to fix this and not be eaten up by excessive ‘dealer financing fees’ which kill the deal?’ Here’s how:

Offer a financing program which gives your customer multiple options AND doesn’t cost YOU an arm and a leg!

6,7,8, and 9% dealer fees can kill a deal faster than you can say ‘one Scaramucci’ (a reference for political junkies out there!).

And if you’re a smaller bathroom remodeler you may have tried (unsuccessfully) to get a financing program started with one of the larger direct lenders, but because you haven’t been around long enough, they turned you down.

So – what can you do – to give your customers payment options which extend beyond them needing personal cash, check, or a credit card to have the money to do a bath remodeling project?

I’d look at an application based dealer financing programs (like you’ll learn about in the video below).

reason 4 bathroom financing program through Hearth Innovate Building Solutions | Innovate dealers | bathroom remodeling dealers | bathroom remodeling products | Home design ideas | Contractors for bathroom and kitchen remodel

With this program there’s a fixed cost per year to participate, there’s over 15 lenders who will review their application, and it’ll only take 1 to 2 jobs financed per year to be money ahead vs. a direct lender program with high dealer fees. And besides if you look at the ‘big boys/girls’ in the bath remodeling business, you’ll find they’re financing from 50% to 70% of their jobs (and their financed jobs are – on average – sold for a higher average ‘ticket’ than their ‘cash jobs.)’

And here’s the bottom line…..

If you want to grow sales WITHOUT more leads, financing will help to increase closing percentages and job sizes!

Reason #5 your bathroom remodeling business IS HALF as profitable as it could be – You’re not SEEN as the expert in your local bathroom remodeling market

Answer these 2 questions:

Question #1) When a visitor (finally) arrives at your web site do they see a laundry list of services you offer which could ‘choke a horse’ (and sorry for this ugly horse reference for you horse lovers!)? Is your web site targeted to sell bathroom jobs?

Question #2) Have you done anything to ‘educate’ prospects about the problems in their bathroom even before they’re ready for an in-home estimate?

If you answered ‘no’ to both questions, I’d say in all likelihood you’re NOT seen as THE bathroom remodeling expert in your market (especially if the prospect has not previous history with your company).

And just like if you needed a heart surgery, you wouldn’t want to go to your general practitioner (‘er general contractor) to perform the procedure (or a bathroom remodel), you’d DEMAND an expert you feel has the best expertise to do the surgery (or bath remodel) right the first time.

The price of having a BOBO (buy one heart surgery, then buy another one- or buying one bath remodel and it ends up needing to be redone) is NOT a good situation (and as an aside – this is EXACTLY what happened to me with my heart years ago– but that’s a story for another day). And the best surgeon or bathroom contractor is rarely the cheapest one.

So – if you see the value of being the expert in bathroom remodeling so you can sell more bathroom jobs, how can you do it? Here’s how:

How to become known as the bathroom remodeling expert in your local market

While becoming known as a bathroom remodeling expert can’t be achieved with a ‘quick advertising scheme,’ it’s a long term process which results in more referrals and commanding higher prices (and better margins). Here’s a few ideas to gain expert status:

  • Idea #1 – Start blogging – When you write articles on how to solve bathroom remodeling problems (which is a huge reason people spend money on bathrooms) – and have an effective way to get these articles found in search, you’ll start rising to the top of the heap as the local expert. And you can get a top position for some google searches WITHOUT massive PPC (Pay Per Click) spending.

Reason 5 idea 1 bathroom remodeling blog Innovate Building Solutions Mike Foti | Innovate Dealers | bathroom remodeling contractors | Home design ideas | Bathroom remodeling ideas | Shower remodeling tips

  • Idea #2 – Create videos – Everyone loves going ‘behind the scenes’ to see a construction project in action. And what do you do in the installation process which provides a better project than the ‘cheap guys/gals’ in your market? How can you show (and explain) your installation process and why it’s superior? Could a series of bath remodeling videos tell your quality story and value before you ever quote the job?

reason 5 idea 2 bathroom remodeling videos bath remodeling expert Innovate Building Solutions | Youtube videos | Home remodeling ideas | bathroom contractors | Bathroom remodeling | Interior design tips

  • Idea #3 – Build a bathroom focused web site with a bathroom focused trade name – There’s a reason the largest franchises have the word ‘bath’ or ‘bathroom’ in their name and have web sites focused on this room in the house. It’s a big market AND they want to be seen – not as ‘general contractors’ – but as bathroom experts. When people come to your site are you marketing as a ‘soup to nuts’ contractor who does a little bit of everything? Is your ‘unfocused’ web site causing people to NOT call you because they want a ‘bathroom expert,’ not a ‘general contracting generalist?’
Reason 5 idea 3 - large bathroom franchise with bath in trade name | Innovate building solutions | bath in trade | bathroom remodeling company

Reason #6 your bathroom remodeling business IS HALF as profitable as it could be – You do too much bidding, and not enough ‘getting!’

If you’re emailing bids like there’s ‘no tomorrow,’ but the number of jobs you’re closing is making it hard to keep your head above water, you know something HAS TO CHANGE.

And here’s the cruel reality. You may be the ‘nicest guy/gal’ in the world, and be an uber-competent contractor, but if you don’t know how to sell … in a more competitive market you could become the next contractor who is D.O.A. (Dead On Arrival) and out-O-business.

And while becoming better at sales is a huge topic (well beyond this article), what can you do now to start closing a better percentage of bathroom jobs you bid?

Start using a formalized ‘sales process.’

If you think about it, McDonalds is staffed with high school kids struggling with boy/girl problems and pimples. Their turnover is crazy-high. Yet, you continue to go there for your early morning Egg-McMuffin (even though your spouse harps on you about your cholesterol, but we won’t get into that).

And you may be wondering how can McDonald use a rotating group of ‘rookies’ – yet have a consistent (and large) business? The reason is they have a process. These ‘newbies’ follow a system.

And while you have a process you use today to sell it may not be effective. You may not have a well thought out company story (or you come across as you’re bragging about your ‘greatness).’ You may not be explaining the pros and cons of competitive systems. You may not have a customer-driven way of explaining your product features, benefits, and processes (because, after all, most remodelers didn’t start as a salesperson!).

Would your bathroom remodeling business do better if you had a professional sales presentation like the major players in your market? After all, the sales reps for the big companies likely don’t have 1/3 the construction knowledge you have, but their sales process (and perceived company expertise) helps them close more deals.

Reason 6 In home professional bathroom sales presentation Innovate Building Solutions | Cleveland Home Remodeling companies | bathroom design ideas | Home design remodel
Reason 6 Interactive bathroom sales presentations | Innovate Building Solutions | Ingage presentation | professional sales presentation | bathroom remodeling contractors

Reason #7 your bathroom remodeling business IS HALF as profitable as it could be – You’re using products which are either cheap or finicky to install which cause ‘call backs’ you can do without

It’s hard to make money when you spend too much time ‘chasing your tail.’ For example:

  • Mrs. Jones called because the tile shower has mold, or worse yet, it’s leaking (and the tile sub you hired for her job is nowhere to be found).

  • And Mrs. Smith called because she thinks the fiberglass shower pan she insisted you buy at the home center store is flexing and thinks it may crack. She want YOU to replace it F.O.C. (Free Of Charge).

While ‘call backs’ can be a way to prove your willingness to serve a customer after the sale, they do prevent you from doing something profitable with your time. The question becomes how can you limit bath remodeling callbacks so you can invest more time in profitable activities? Here’s some ideas:

Use products which embody the 3 S’s. They’re simple, sturdy, and stylish

There’s a plethora (my fancy word of the day) of bathroom products on the market. And though it can be fun to use fancy high end products (like custom tile or stone wall surrounds or floors), they often don’t come with a guarantee they won’t become a challenge in the future.

Or if your customer ‘forces’ you (although they really can’t force you, unless you let them) to use cheap, store bought valves or shower bases – this can come back to haunt you (not only in the installation hassles these cheap products caused, but the customer may come back on YOU if they fail – and think it’s your fault).

The way to cut call backs is to look for the (sometimes elusive) ‘3 S’s’ as I call them. These are products which are Simple (to install), Sturdy, and Stylish (nobody wants an ugly bathroom). Here’s a few ‘3 S’ options:

  • 3/8” thick laminate wall panelsWith a thick backing, 31 patterns, and a lifetime warranty from a product invented 41 years ago– you’ll not only be installing a unique product, but one which is built to last.

Reason 7 - White Subway Tile laminate shower panels with matte black profile | Innovate Building Solutions | bathroom remodeling contractors | wall panels for bathroom remodel | easy to install bathroom wall panels

  • 1 1/6” stone low profile shower pans With the growth in the age in place market (refer back to reason #3 above), and the desire for shower pans which aren’t slippery or squeak when walked on, stone low profile shower pans are growing rapidly.

Reason 7 InnovaStone Black Marble stone low profile shower pan with Bianco marble wall panels | Innovate Building Solutions | black marble base | home design ideas | bathroom remodeling tips | bathroom remodeling shower base

  • Tall frameless glass shower doors which are 3/8” thick – Most homeowners HATE, HATE, HATE flimsy framed bypass glass shower doors which wobble to and fro. Imagine giving them stylish and sturdy glass shower doors in multiple finishes which are tall enough, so no one has to duck to get in.
Reason 7 tall frameless slider glass shower door Innovate Building Solutions | Innovate Building Solutions | Glass shower door display | Shower glass doors | Roll in shower doors

So, what ideas are you taking action on to improve bath remodeling profits? Can I help you with products and programs to jump-start this process?

So, which of the 7 ideas above do you need to start fixing? Are there other problems hot on your list I didn’t mention? Please comment below.

And if you’re looking for products and programs to improve bathroom remodeling jobs, I’d love to help (and yes, this is where the ‘pitch’ comes in). Just keepin’ it real dog!

My company – Innovate Building Solutions – has bathroom products for safe, simple, and stylish remodels which improve your margins per crew per day. And not only that, we offer dealer programs like visualizer tools, in-home sales presentations, dealer financing programs, and advice on marketing (including blogs and videos) to help dealers hit the next level in sales and profitability.

Call 888-467-7488 and ask to talk to Mike or visit the bathroom products dealership area of our site. I’m looking forward to assisting you.



And if you’d like to connect on LinkedIn, you’ll find me https://www.linkedin.com/in/mikefoti/

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Mike Foti

Mike Foti is the President of Innovate Building Solutions.

Mike Foti

Mike Foti is the President of Innovate Building Solutions.