Hosts reflect on the challenges faced in 2023 and discuss the factors affecting business performance, such as decreased average ticket prices and struggles with selling upgrades. They also analyze the challenges with data analysis and higher costs of goods. The impact of rising costs, inflation, and interest rates on financing for home improvements is explored and the hosts express their readiness for new opportunities.
In 2023, the average ticket price for lower-end service category jobs in the plumbing business declined by about 10%, which could be attributed to customers reacting negatively to higher prices and feeling unable to afford larger ticket items.
The decline in sales of high-end upgrades in 2023 can be attributed to factors such as inflation and changes in financing options, prompting the speaker to consider offering financing options to engage customers and make larger projects more affordable in 2024.
Deep dives
Challenges with Pricing and Margins
The speaker discusses how the prices and margins of their plumbing business were affected in 2023. On the high-end jobs, margins were better and the cost of the jobs was higher, but on the lower-end service category jobs, the average ticket price was down by about 10%. The speaker reflects on the reasons behind this decline, speculating that customers were reacting negatively to higher prices and feeling that they could not afford the upgrades or larger ticket items.
Impact of Inflation and Financing
The speaker attributes the decline in sales of high-end upgrades to factors such as inflation and changes in financing options. With inflation, all expenses in the business were higher, and customers were feeling the impact, with higher interest rates making financing less favorable. The speaker shares their intention to offer financing options to customers, hoping that it would keep them engaged in conversations and make larger projects more affordable.
Future Outlook and Expansion Plans
The speaker looks ahead to 2024 and discusses their plans for the business. They express interest in expanding the business by hiring an employee but express concerns about managing the business in their absence due to other personal commitments. Additionally, they mention implementing changes to manage the business from afar and increase work opportunities while still prioritizing responsible management.
Will Aune Plumbing expand in 2024? Looking back on 2023 and forward in the new year. There's always time to make plans and set goals but the new year seems like the most appropriate. What are some of your goals for 2024?