Headwinds Going Into 2022: Charting A Sound and Healthy Future
Predicting the 2022 Construction Market?
Builder Magazine recently released an online article with two economists forecasting their industry outlook for 2022. This caught my interest because we are all wondering what will happen in 2022. Will this robust construction market continue? According to these economists, the answer is an emphatic “yes!”
Here Are the Key Points
Neither economist saw a recession coming in 2022 – demand is still strong
Due to a scarcity of qualified workers, the cost of labor will continue to rise
Supply-chain interruptions will continue through most of 2022
Chief supply-side concerns:
Lack of skilled labor
Availability of lots
Higher building material prices. In July, the cost of lumber was adding $36,000 to a single-family home and $10,000 per apartment
Due to the increasing cost of housing, we may well see a 40-year mortgage in the next 5 years
The remote, work-from-home business model is here to stay!
The 2022 Work Challenge
Every coaching client I work with is well into their annual planning for 2022. From the key points above, it looks like 2022 will look much like 2021. I mention this because even though contractors may be having their best year ever, many are struggling! They are struggling due to market factors that are beyond their control:
Limited subcontractors’ availability to perform work
Material shortages
Backordered parts and equipment
Inflationary spikes in building costs:
Materials (lumber being the best example)
Trade contractor price increases due to the labor shortage
We are working in a new marketplace and the rules in this marketplace are being recast daily. For example, when there is a 14-to-16-week lead time for window and kitchen cabinet orders, we must adapt and change our design and project scheduling deadlines and manage the homeowner experience when project uncertainly is the rule of the day.
This is a challenging marketplace to sell and build projects. Stressful is a word that comes to mind. Because we can’t change the marketplace, the key to some sense of stability is managing the work we do and the clients we choose to work with. With many contractors having work booked well into 2022, a full production pipeline allows you the discretion to be more discerning regarding the work you want to do. Of course, it will not always be this way, but it is a luxury you may have now.
Your 2022 Personal and Business Goals
The goal of any good business owner is to build a profitable business. Too often, this uphill climb can come at the owner’s personal health and well-being. Early in my remodeling career, I received some excellent advice when building my own business. This advice reviews four priorities in the following order:
My relationship with myself, my spiritual orientation, and my core sense of self
My health
My family
My business
It was highlighted to me that when I don’t feel in control and am getting overwhelmed, it’s because I have gotten the four priorities above mixed up or upside down. I prioritized the wrong things, which led to an imbalance in my life. That has proved to be sound advice.
Knowing that this market will continue to be a challenge in 2022, I would ask you to define and enact your own business and personal priorities moving forward. Please consider the following:
Controlling your time and the ability to wake up and say, “I can do whatever I want today.”
Your true goal as a business owner is to remove yourself from day-to-day activities and functions. This builds long-term company value, but this fundamental shift will not happen until you decide that your personal priorities are as important as your client’s priorities. Can you manage your client’s expectations that continue to support your life and health?
Being clear about your work and why you are doing it
After going through four economic downturns (in my lifetime), saying “no” to profitable work is a muscle that does not get much exercise. For every small business owner, cash flow is king. In this robust market, before saying “yes,” can you consider:
How much is enough?
What am I working for?
What is the cost of saying “yes”?
To my health
To my family
Regarding my own work/life balance
A business that allows for intellectual honesty
As I have gotten older, I am committed to expressing and living my core values through my work with clients, employees, and tradespeople, having difficult conversations with clients or co-workers without fear of retribution. Being able to say, “I don’t know” when I don’t know—creating a workplace where people can make reasonable mistakes and be open about them without excessive worry, in creating workplace transparency and collaborating with people that value that same openness and honesty. In this robust marketplace, I do get to choose!
Simply, I want to encourage you to create a business that allows you to be open and honest with yourself and others. That kind of business pays a personal bonus that’s hard to measure!
If you are interested in knowing more, please click on the following link: https://www.contractorexitstrategy.com/take-your-exit-readiness-assessment