How Was Business for Renovation Professionals in 2023?
The results of the Houzz UK 2024 State of the Industry report are in. Here are the findings
Did 2023 meet expectations for professionals on Houzz or was it a year full of business challenges? How profitable were UK renovation businesses, and what were the things that impacted them in particular? Read on to find the answers to these questions and more in a rundown of the major findings from our annual State of the Industry report.
*The survey was sent to businesses with profiles on Houzz UK and fielded between 14 December 2023 and 31 January 2024.
*The survey was sent to businesses with profiles on Houzz UK and fielded between 14 December 2023 and 31 January 2024.
What was most challenging for pros in 2023?
As homeowners tightened their purse strings, their budget concerns impacted renovation pros significantly, with 48% of those surveyed saying this was a major challenge in 2023.
Another stumbling block was the process of finding new business, with 39% of respondents saying that difficulty finding prospective customers was a top challenge. This was a problem in particular for architects, with over half saying it was their biggest issue.
The third most common business obstacle last year was the economy. Almost a third (29%) of respondents said the uncertain national economy was a top business challenge, with 37% of design and build firms citing this as their main obstacle.
As homeowners tightened their purse strings, their budget concerns impacted renovation pros significantly, with 48% of those surveyed saying this was a major challenge in 2023.
Another stumbling block was the process of finding new business, with 39% of respondents saying that difficulty finding prospective customers was a top challenge. This was a problem in particular for architects, with over half saying it was their biggest issue.
The third most common business obstacle last year was the economy. Almost a third (29%) of respondents said the uncertain national economy was a top business challenge, with 37% of design and build firms citing this as their main obstacle.
Did business pan out as pros expected?
For the majority of those pros we surveyed, business in 2023 was below par, with 20% saying it was significantly below expectations and 36% reporting a year that was somewhat below expectations. In contrast, only 15% in total said things were above expectations.
The most pleasantly surprised category of pros were architects, as 21% said business was above expectations in 2023, versus 9% of interior designers and 6% of design and build firms.
For the majority of those pros we surveyed, business in 2023 was below par, with 20% saying it was significantly below expectations and 36% reporting a year that was somewhat below expectations. In contrast, only 15% in total said things were above expectations.
The most pleasantly surprised category of pros were architects, as 21% said business was above expectations in 2023, versus 9% of interior designers and 6% of design and build firms.
Did renovation firms expand their teams in 2023?
There was little growth in staffing levels for those surveyed in 2023, with only 13% saying they increased the number of employees compared to 22% in 2022.
14% of respondents said they decreased their teams versus 10% in 2022, while the majority (73%) said there was no change in staffing levels at all.
It seems that employee costs were an issue for pros, with 30% saying it had a big impact on business costs.
Discover how Houzz Pro’s Project Collaboration tools can help your team work better together.
There was little growth in staffing levels for those surveyed in 2023, with only 13% saying they increased the number of employees compared to 22% in 2022.
14% of respondents said they decreased their teams versus 10% in 2022, while the majority (73%) said there was no change in staffing levels at all.
It seems that employee costs were an issue for pros, with 30% saying it had a big impact on business costs.
Discover how Houzz Pro’s Project Collaboration tools can help your team work better together.
Did business costs rise, and what were the main drivers?
The cost of doing business did indeed rise in 2023, but slightly less than it did in 2022, with 79% of respondents reporting an increase compared to 82% in 2022.
Similarly, 17% of 2023 respondents said there was no change, while 14% reported the same in 2022.
By far the biggest reason for a rise in business costs was the price of products and materials, as 70% of respondents cited this as the main factor. Business insurance costs also rose for 38% of those surveyed, and this impacted 55% of architects and 43% of design and build firms.
The third biggest driver was subcontractor costs, which affected design and build firms in particular, with half of that category saying it had a large impact. For interior designers, advertising and marketing costs had an effect, as 56% said it was a big driver.
Tell us…
How was business for you in 2023 and do you expect a better year in 2024? Share your thoughts in the Comments.
The cost of doing business did indeed rise in 2023, but slightly less than it did in 2022, with 79% of respondents reporting an increase compared to 82% in 2022.
Similarly, 17% of 2023 respondents said there was no change, while 14% reported the same in 2022.
By far the biggest reason for a rise in business costs was the price of products and materials, as 70% of respondents cited this as the main factor. Business insurance costs also rose for 38% of those surveyed, and this impacted 55% of architects and 43% of design and build firms.
The third biggest driver was subcontractor costs, which affected design and build firms in particular, with half of that category saying it had a large impact. For interior designers, advertising and marketing costs had an effect, as 56% said it was a big driver.
Tell us…
How was business for you in 2023 and do you expect a better year in 2024? Share your thoughts in the Comments.
It was a tricky year for many of the professionals we surveyed, with 43% seeing a fall in revenues and an even greater number (51%) reporting a decrease in profits. However, around a third (35%) of businesses reported a rise in revenue, with 31% seeing increased profits.
41% of interior designers reported a rise in revenues and 36% said profits had risen. In contrast, only 28% of design and build firms saw an increase in profits.