How Pros Are Handling Material Shortages and Price Increases

Making business adjustments to stay on pace with market conditions is key to keeping a firm’s finances positive and clients happy. We asked remodeling and design pros to share the adjustments they’ve made as a result of current material shortages, price increases and labor shortages. Read three ways these pros have kept their projects on track and their clients satisfied. Then let us know in the Comments how your business is adapting.

1. Keep Clients Informed Right From the Start

When it comes to keeping clients happy, knowledge is power. Having a conversation with clients about material shortages and price increases at the onset of a project helps set realistic expectations. Clients are less likely to be upset about delays when they’re aware of the possibility from the start.

“Most homeowners have heard the news about the crazy price increases and shortages,” says Mason Hearn, president of HomeMasons in Richmond, Virginia. “But we do have a conversation with them about the reality of the present supply chain issues to drive that knowledge home.”

Designer and contractor Judy Cusack-Peterson of Transitional Designs in Washougal, Washington, shares articles with clients to keep them informed about the material shortages and price increases and how they might affect their remodeling project.

“The articles keep them informed and show that it’s not just me saying it,” Cusack-Peterson says. “I prepare them by letting them know my subcontractors are booked out, so they may not be able to start their project immediately. It’s a reality that none of us want to deal with, but it’s real.”

Houzz Pro helps track communication with clients and creates a central record of what’s been agreed upon. Houzz Pro also allows pros to share photos and files with clients and send proposals, mood boards, a 3D Floor Planner and more.

2. Order Project Materials as Early as Possible

Since it’s unclear how long material shortages and price increases will continue, it can be helpful to order materials as early as possible to avoid being surprised by a larger-than-expected bill.

Margaret Karakas, owner of MK Design Group in Naples, Florida, says her firm holds off on starting a project until all materials are at the project site or certain to arrive soon. “I have shortened the time frame in which proposals are accepted and deposits required, which creates a a sense of urgency,” she says.

“As a rule right now, I select products that are available and avoid anything marked ‘special order,’ ” says Merry Powell, owner of Merry Powell Interiors in Richmond, Virginia. “I also encourage my contractors and clients to order early and utilize various warehousing options offered by suppliers. I help clients decide if a specific element is worth waiting for or if a reasonable compromise is better for them.”

Jane Marek of 2nd Life Home Repair & Remodeling Services in New Berlin, Wisconsin, advises clients to get a jump start on their remodeling project. “With so many delays, we are advising our clients to order their materials now if they want their projects to start come fall. Thankfully they have been flexible as well, and are willing to work with us during these unprecedented times.”

3. Update Contracts to Protect Against Price Increases

Given the material shortages, pros might want to update contracts to accommodate for price fluctuations and longer project times. This might mean offering clients labor-only contracts to protect against rising material costs.

Joseph Graves, owner of Graves Construction in Lucedale, Mississippi, says his firm has had to redesign its contracts and plans of action to accommodate changing material costs as well as spend extra time managing the process for contract bidding.“Sometimes we offer clients alternative options, with pricing comparisons, when there’s an affordable solution to high-priced material. We have definitely put a squeeze on every process to minimize losses and raise homeowners’ awareness,” Graves says.

Al Pante, project manager for Decorem Home Improvement in Fredericksburg, Virginia, says his company has changed to labor-only contracts now that prices have risen so dramatically. “We still break down estimated costs for the homeowner in advance so they can make an informed decision,” he says.