{"id":1842,"date":"2024-05-01T09:19:43","date_gmt":"2024-05-01T13:19:43","guid":{"rendered":"https:\/\/innovatebuildingsolutions.com\/dealers\/?p=1842"},"modified":"2024-05-01T12:53:36","modified_gmt":"2024-05-01T16:53:36","slug":"how-to-improve-profit-bathroom-remodeling-business","status":"publish","type":"post","link":"https:\/\/innovatebuildingsolutions.com\/dealers\/2024\/05\/how-to-improve-profit-bathroom-remodeling-business\/","title":{"rendered":"7 Reasons Your Bathroom Remodeling Business is HALF as PROFITABLE as it Could Be (with ideas to fix it!)"},"content":{"rendered":"

It\u2019s not easy to make a buck in the bathroom remodeling business these days.<\/p>

Inflationary material prices are not \u2018your little \u2018Fre\u2019 (as Tony Montana <\/em>\u2013 from the bloody movie Scarface <\/em>would say).<\/p>

Finding quality installers to do time-effective installations can be a \u2018needle in a haystack experience.\u2019<\/p>

Scrounging up leads has become harder and harder (and MORE EXPENSIVE).<\/p>

And if your bathroom remodeling business IS NOT as profitable (or as large) as you\u2019d like (or as profitable as it was during the pandemic when you were as popular as a Rock Star \u2018waiting\u2019 for fans to call begging to get on your schedule), you\u2019re not alone.<\/p>

Times \u2013 and market conditions \u2013 have changed.<\/p>

So, if you\u2019re looking to improve the bottom line of your bath remodeling business<\/a> you need to first identify the reasons you\u2019re NOT as PROFITABLE as you could be, then start putting into action practical ideas to fix these problems.<\/p>

And in this article I\u2019m going to do exactly that.<\/p>

I\u2019ll identify 7 profit leaks (OK \u2013 bad plumbing analogy, I know\u2026.) and ideas to fix them. At the end, let me know which of these leaks you\u2019re going to fix first (or add others to the list I didn\u2019t cover). Unfortunately, there\u2019s plenty of challenges to go around!<\/p>

So, let\u2019s dig in.\u00a0<\/p>

Reason #1 <\/strong>your bathroom remodeling business IS HALF as profitable as it could be\u2013 <\/strong>Projects take too long \u00a0<\/strong><\/h2>

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\u2019t drag the process out), order materials (and pray \u2018supply chains\u2019 aren\u2019t a thorn in your side) and line up your team and\/or subs and cross your fingers no one blows up your schedule.<\/p>

And if there\u2019s hiccups in the job, and the project drags on \u2013you 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 \u2018torn up\u2019 grows.<\/p>

And as my friend Tony Hoty likes to say, \u201cRemodelers in your home are like dead fish, they start to stink after a few days!\u201d <\/em><\/p>

So, how can you prevent the \u2018never-ending-project?\u2019 Here\u2019s some ideas.<\/p>

A fix to finish bath remodeling projects quicker \u00a0\u00a0<\/em><\/strong><\/h2>

While there\u2019s many things you can do to make sure custom bathroom remodeling projects don\u2019t take too long (like prebuying materials and making sure you get the deposit to cover them, so you don\u2019t have cash flow problems), another option is to rethink the type of projects you\u2019re pursuing.<\/p>

While it\u2019s satisfying to land the big dollar bath remodeling job, after the ink is dry you can see how the job complexity cuts into profits.<\/p>

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

\"reason<\/a><\/p>

And if you think about it, there\u2019s a reason the biggest (and most profitable) companies in bathroom remodeling ARE NOT doing the expensive custom jobs. They\u2019re working in middle-income projects on less \u2018sexy\u2019 (but more systemize-able) jobs which generate more profits per crew per day.<\/p>

Could you become more profitable focusing on quick install bathroom projects<\/a>?
\"\"<\/a><\/p>

Reason #2 your bathroom remodeling business IS HALF as profitable as it could be \u2013 Customer selections take FOR-EVER! <\/strong><\/h2>

Are customer bathroom selections driving you (and your customer) nuts? They\u2019re traveling from store to store trying to figure out<\/em> what they like. They\u2019re struggling to coordinate products and keep calling you (or your design team if you have one) for advice. Then when they \u2018uncover\u2019 prices, they get mad at YOU because your allowances were WAAAAAY TOOO LOOOOW!<\/p>

The \u2018fun\u2019 (theoretically speaking) selection process can not only slow down your company\u2019s revenue stream from \u2018streaming,\u2019 but you can make \u2018enemies\u2019 with your customer BEFORE the installation process begins when they finding their budget getting obliterated. So, how can you fix this?<\/p>

A fix for the slow selection process <\/em><\/strong><\/h2>

Wouldn\u2019t it be nice to streamline selections AND make sure you\u2019re not compromising profit margins in the process?<\/p>

A good way to do this is with a bathroom visualizer tool<\/a>. With one tool you can display easy to install products (like grout free wall panels<\/a> and stone shower pans<\/a>) which are easier to select than tile or stone used in custom bathrooms. Your customer can \u2018see\u2019 how their wall surrounds will look with different bases and glass doors<\/a>. They can choose recessed niches<\/a> at the same time \u2013 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<\/a><\/p>

When you \u2018get \u2018er done\u2019 (as Larry the Cable Guy <\/em>would say about product selections) quickly, you can \u2018get \u2018er started\u2019 (\u2018er the job) even quicker. This is a win for everyone.

\"Reason<\/a><\/p>

Reason #3 your bathroom remodeling business IS HALF as profitable as it could be \u2013 You\u2019re \u2018trying to sell\u2019 too many people who WANT a new bathroom, but not enough people who NEED a new bathroom\u00a0\u00a0 <\/strong><\/h2>

It\u2019s easy to get excited about updating an outdated bathroom \u2026 at least until you get the \u2018sticker shot\u2019 (AKA the price!).<\/p>

And given today\u2019s inflationary prices, and high interest rates, \u2018disposable\u2019 spending has gotten tighter than a drum!<\/p>

And, and I\u2019m sure you\u2019re aware, people who \u2018want\u2019 a new bathroom, can easily say (after you deliver the price), \u2018we\u2019d like to T.I.O. (Think It Over). Then they ignore your follow up calls when you attempt <\/em>to close the job. So, how can you minimize this problem and stop chasing so many prospects who aren\u2019t ready to buy? Here\u2019s how\u2026.<\/p>

STOP selling only to people who \u2018WANT\u2019 new bathrooms, start selling to people who \u2018NEED\u2019 new bathrooms! <\/em><\/strong><\/h2>

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\u2019t AFFORD a new bathroom.<\/p>

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 \u2018age in place\u2019 market<\/a>. When you look at older prospects who want to age in place, they can easily cost-justify a tub to shower conversion<\/a> vs. living in an independent or assisted living facility (which costs about $5,500\/month).

\"reason<\/a><\/p>

And the other nice thing about somewhat older people (and yes, I unfortunately count myself in these ranks, even though in \u2018maturity\u2019 I\u2019m certainly MUCH YOUNGER) is they have money to do the work. They have equity accumulated in their homes. They aren\u2019t cash-strapped like young prospects who put their kids (sudden) need for braces before the bath remodeling project you\u2019ve quoted them. Can you imagine that?
\"\"<\/a><\/p>

Reason #4 your bathroom remodeling business IS HALF as profitable as it could be \u2013 You don\u2019t make it easy to buy<\/strong><\/h2>

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, \u201cAre you paying with cash, check, or credit card?\u201d<\/p>

And you think\u2026\u2026<\/p>

\u201cAre you nuts? I don\u2019t have $55,000 laying around and can\u2019t \u2018finance\u2019 $55K on my credit card at 29.99% interest rates!\u201d<\/em><\/strong><\/h3>

Well \u2013 this is exactly the scenario many bathroom remodeling companies (who aren\u2019t 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\u2019s $10,000, $20,000 or $50,000 in cash and available to spend now).<\/p>

Bottom line is they make it hard for prospects to buy \u2013 because most people don\u2019t have big wads of cash laying around. So, what can you do to fix this and not be eaten up by excessive \u2018dealer financing fees\u2019 which kill the deal?\u2019 Here\u2019s how:<\/p>

Offer a financing program which gives your customer multiple options AND doesn\u2019t cost YOU an arm and a leg! <\/em><\/strong><\/h2>

6,7,8, and 9% dealer fees can kill a deal faster than you can say \u2018one Scaramucci\u2019 (a reference for political junkies out there!).<\/p>

And if you\u2019re a smaller bathroom remodeler<\/a> you may have tried (unsuccessfully) to get a financing program started with one of the larger direct lenders, but because you haven\u2019t been around long enough, they turned you down.<\/p>

So \u2013 what can you do \u2013 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?<\/p>

I\u2019d look at an application based dealer financing programs<\/a> (like you\u2019ll learn about in the video below).<\/p>