By: Willis Schlabach
For those of us in the entry door, replacement window, vinyl siding and manufactured stone market, opportunities exist all around us for multi-family renovation sales. I’m talking about condominiums, student housing, military housing, section 8 housing, HUD, institutional housing, etc. Many of our residential dealers have had a misperception about this market, and therefore neglected it entirely. While this segment may never become a core business, it can add significant incremental value. And these days, who wants to miss sales opportunities?
A Little for A Lot
ProVia has experienced this first-hand. For years we walked away from this business. We never leveraged the possibilities. But consider…you’re buying the same products, delivering the same services, trucking the same goods – all of the existing components of the business can be leveraged to meet the needs of a brand new market. Since placing a small amount of focus on multi-family, we now enjoy additional business we never had, that we’re now adding to our bottom line.
People buy on relationships. It simply means leveraging those relationships and seeing this business from a different perspective. Don’t take the mindset that “if I pursue this market, I’m pursuing it 100%”. Don’t completely revamp your model – just add to it.
Who and Where to Sell
Sales people are naturally drawn to this because it looks huge. Sometimes it’s best reserved for one or two sales people, while keeping the rest focused on your core business. Other times it’s good for the business owners to be the one to pursue multi-family, while keeping the sales staff focused on the core. That way you can grow this as additional business instead of shifting to an entirely new focus.
We’re seeing these kinds of relationships being very fruitful amongst our dealers in the large metro areas where there are an abundance of institutional housing projects. In the smaller markets – anywhere there are colleges, military bases, section 8 housing, condominiums - opportunities exist. Many times dealers have the perception that there is no money to be made on this. That’s just not true. What’s true is there is less margin than traditional single-family projects, but what if you added 15-20% business to your bottom line?
There are a few things to be aware of when venturing into the multi-family business. First, the cycle times for these projects can be long. You can go through a bid process, then a recertification of the price, then it actually becomes a job - all of which can take a year. With a typical single-family project you can often take someone from being an interested customer to finishing the project within a sixty day time period. Multi-family projects can take six months to a year. An analogy would be that in finance you have short-term and long term investments. They both can pay dividends, but you need patience, and you need to resist being short sighted with the long-term investments.
For dealers that are established in their communities, simply leverage the relationships you currently have: with friends you go to church with, or see at your kids’ school functions, social events, and golf outings. When you stop saying “that’s not my business”, adjust your mindset, and apply a small percentage of your sales investment toward this potential reward, great things can happen. Who’s getting that business? Why not you?