Find Your Niche and Own Itcomments (4) July 31st, 2012 in Blogs
I started my first remodeling company fresh out of high school. A buddy and I teamed up under the banner "Hammer, Spade, and Brush." We wanted to cast a big enough net to land any available job, whether carpentry, landscaping, or painting. We also added the familiar tag, "No job too big or small." And that's how a lot construction companies still operate: We'll take whatever we can get. It worked. The little business actually grew and paid the bills-to a point. Twenty years and several incarnations later, I was building my very first spec homes in Los Angeles, California.
Because I had no capital, the homes I built were small and inexpensive. I watched every penny, negotiated every transaction, and made a profit. But always with a little envy for the other contractors I watched grow right past me and onto high profile, million dollar projects. Eventually a severe downturn rolled through recession-proof California, and every one of those builders fell like bowling pins. I made no money that fateful 1989, but my houses sold-I had about twenty by then, I paid off the banks and moved onto doing other work. It was then I realized that I had unwittingly chanced upon a business plan, one I would later write a book about-building affordable homes.
But I still wanted to try my hand at bigger and better things, and twice the opportunity came for ambitious projects, million dollar condos and golf course homes, and each time with humiliating results. For whatever reason, I am very good at building affordable homes, unlucky at the higher end. Maybe it's the Peter Principle kicking in, or maybe just bad timing, but I have learned that I have specific, albeit peculiar areas of competence. For example, I have worked successfully building very affordable spec homes in the inner city, in those neighborhoods many won't even drive through during daytime, as well as architecturally appropriate homes for immigrant communities ranging from Mexican expatriates, to Sudanese, and Vietnamese buyers. Weird talents, yes, but certainly niche markets that I owned.Â Â Â Â
I may be biased by my experience, but I believe each of has a niche, and once found, it's wise to stray only short distances away from it, with very good reason and with great care. I know this from my mistakes. Â
Of course, not every niche woks well all the time, and flexibility is also a valuable tool for survival. But I thought it would be useful in these next few posts to explore niches working well in today's economy. You've heard me plug green building, and that's only because my repeated exposure to successful green builders has convinced me this has become a viable niche in some markets right now. But this is not the only strategy. Other niches I've seen working well today include small apartment building construction (subject of my next post), manufactured housing rehab (don't laugh), replacement contracting (siding, windows and roofs), adaptive reuse (like turning old schools into apartments), and well groomed handyman services.
I would love to know what niche is working for you and in your marketplace.
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