Depending on who you talk to, business for the residential concrete industry is in one of two places—red or black. If you fall into the latter category, you may be one of the few currently experiencing a steady workload in what could be considered an inconsistent marketplace, at best.
As for the former category, many of you are seeing red about being in the red. However, there is a solution. Either you remain reactive, continue to struggle, and let the marketplace dictate your business. Or, you can take a proactive approach and find a certain niche in the residential concrete industry that will kick-start your business and lead to new opportunities.
Recently, I heard the term “diversification in slow times” at the Concrete Foundation Association's (CFA) 2007 Summer Meeting in Stowe, Vt. This got me thinking as to how a residential concrete contractor could diversify or evolve his business to keep it profitable.
One example involves turning a hobby into profit. At the CFA meeting, a presentation focused on how a contractor successfully pursued a hobby making custom concrete fireplace mantles—a number of which have been sold to homeowners in his area.
After an initial investment in the materials and time to make a mold, each successive concrete fireplace mantle was cast from the same mold and then customized to a client's specifications. After recouping the initial investment, each successive mantle sold represented a profit—sometimes in the neighborhood of $20,000.
Another niche that may help you counter the slumping residential concrete market is decorative concrete. The ability to stain concrete for custom residential applications is not only profitable, the initial investment is minimal because materials are inexpensive. Additionally, indoor decorative concrete work may be performed during winter months when contractors are faced with a lull in their business due to inclement weather.
Finally, for you big thinkers, there is also the concrete homes market. Some foundation contractors around the country are adding a new dimension to their existing business by constructing homes made entirely of concrete. Though the concept is still limited, the trend is fueled by the integral role concrete plays in the trend toward green homes. The environmental benefits of concrete homes include superior insulation and temperature control, not to mention the ability to resist fire and natural disasters.
For some residential contactors, this volatile housing market is the first they have encountered. At the very least, it has been some time since the residential marketplace has experienced this amount of instability.
There is a benefit to the downturn as concrete contractors are forced to take a step back and look at their business plan differently.
The success of your residential concrete contracting business depends on your ability to adjust to slow times. In taking a proactive stance by diversifying your contracting portfolio, you are opening the door to more opportunity. As a result, you are able to increase your business' profitability regardless of market condition.
Editor in Chief