2019 Might Bring Lower Revenues but There is Opportunity for Higher Margins

RCS Influencer Ken Kelly says that in 2019 his business will see diversification of product lines and service offerings.

The new year looks to be dominated by an El Nino weather cycle, where our service territory will experience dryer than normal conditions.  We also see a flat year in the general economy caused from gridlock in our political spectrum.  We are looking for ways to cut costs to preserve margins.  To help meet sales goals we will be diversifying in product lines, offering additional exterior renovation and maintenance services.

The last few years have been very good to our industry as the overall economy and political will has been strong.  We have cash to acquire or invest in knowledge so our new offerings will be better than existing competition.

Our budget calls for a decrease in all expenses, except a few direct materials, which are affected by trade negotiations and strong economic activity.  Taxes are favorable for investment, so now is the time to expand product lines.  Since all of our equipment and vehicles were recently replaced, we don’t expect any major capital expenses, except for equipment specific to our new product offerings.

Our administration staff will revamp our current documentation process so the way we do business is clearly defined, trained and followed by all.  Although we don’t expect to accrue addental costs versus last year, software development will continue to be a major focus for us as we continue to work toward complete automation of our backend systems.  Our partnership with Microsoft has proven rewarding and we expect to fully capitalize on that relationship by outperforming the competition in service, response, pricing, communications and customer focus.

The biggest opportunity we have is with our existing and past customer relationships.  We will continue to take care of their needs.  Although revenue will be lower, margin will be higher.  We have no desire to be the biggest, just the best.  If you’d like to discuss strategy, please feel free to reach out to me at ken@kellyroofing.com.  Good luck in 2019!

Ken Kelly is President of Kelly Roofing, Naples, Florida. See his full bio here.