Are material prices going up at an unsustainable rate for small businesses? A lot of trades are currently working to a minimum of 2-3 months lead time, but what does that mean for customers?
Small businesses haven’t had a tough 18 months, now they are faced with the forever increasing material prices and stock shortages.
“It’s worrying for all small businesses in the industry at the moment, as a construction company owner myself, I am seeing first hand the effect this is having on us as a business, and our customers.”
I spoke to a few others in the industry and it’s clear, there is panic.
I spoke with Paul Davis Church from Direct Developments & Maintenance, who said “We have bathrooms booked into next year, the price of timber is shocking, normally a sheet of osb is £22, currently it’s £56!”
Paul went on to say “We are having to foot the cost, the worry is if It keeps on rising, we are at a higher loss”
Another construction company owner said “By the time you get to do the job, the materials have gone up so much since it was quoted, it eats away at profit and wages”
Are quotes pointless?
It’s not just the rise of material prices that’s causing concern, tradespeople are concerned they look like they are over charging, which of course is not the case. In fact, the quotes are the same as they have always been, plus the new material prices.
As a construction company owner, I have also expressed concerns over quotes my construction business is currently provided, being booked up until mid-2022, it worries me the customer’s who are agreeing these quotes and booking in, may need to be re-quoted nearer the time, due to the increase in material costs.
The Knock-on Effect…
Take an extension for example, there are several trades needed for the process, from the groundworkers to the painter and decorators, if one trade has finished, but the next trade is facing a stock issue on materials, it has a knock-on effect for all trades booked in.
Will material prices be the new fuel prices? Go through the roof, drop a little then come back down?
Should we be using social media more?
As of July 2021, there were 51.15 million Facebook users in the United Kingdom (Statista). Can businesses really afford to not be consistent on their platforms?
Social Media for business is all about engaging an online community of potential customers, meaning when your business has something important to say, you should have that engaged audience already.
Using social media to communicate the price increase can be highly effective, as well as help customers understand that their original quote is in fact, just an estimate and may need to be re-quoted prior to the work starting.
It’s not ideal for both businesses and customers, but currently, the industry is left with no choice but to take precautions when it comes to pricing jobs.
How do you currently communicate price increases to your customers?
I’d love to know your thoughts.