Business isn’t slowing down for Red Rock Design | Build, a Phoenix-area contractor specializing in ultra-high-end homes, buildings, outdoor spaces and pools. Rick Chafey, co-owner and founder of the company, sees good things in the immediate future.
Even so, he’s been keeping his eyes open, and he can’t ignore signs that the slowdown that has hit more production-oriented companies could affect his. It goes beyond the more obvious things such as interest rates and permit numbers. For instance, the types of homes being built in his area give him pause.
“There are tens of thousands of apartments under construction every day,” he says. “They might have a community pool, but that's one pool for 100 instead of 50 pools per 100 [in single-family residential communities]. There's a reasonable amount of rent-to-own homes as well. It’s the same thing - backyards are 6 feet deep, so there are no swimming pools going to be there. So you’ve always got to pay attention, and you have to be ready.”
Then there is the upcoming presidential election. While it’s common to worry that pre-election demand will slow down as consumers worry about the ballot’s outcome, Chafey also turns his attention to possible policy changes that could affect his company, such as the loss of certain tax breaks.
“That'll very likely cause us to make some business decisions, depending on if there are major policy changes to some taxing details on income or equipment purchases or those kind of things,” he says. “So as we plan for that, we want to have more cash on hand.”
To prepare for the unknown, his company has focused on a few ways of boosting revenues to buttress it if times go lean.
“We have started to flex our connections and relationships, to try to pick up some projects we wouldn’t normally chase down, to make sure we keep business coming,” he says.
For instance, Red Rock is taking on more commercial and renovation work than it had before.
“We are widening our funnel to get it where we might entertain projects that we wouldn't normally entertain,” he says. “I'd rather have more work in the can, more projects that we can manage… than out there trying to figure out, ‘Well, we didn't expect that to happen. Now we've got to make all these changes or try to catch up.’”
To make the most of its staff, the team is cross training employees.
These strategies have certainly worked for 2024.
“We'll have a banner year,” he says. “We'll have higher revenues than last year, and an increase in [staff] size.”
He believes other companies would do well to take similar measures, even if 2024 has been a banner year.
“If we get inflation to be where it's supposed to be, I think, 2025 could be a nice, easy year,” he says. “[But it’s good] to be prepared for the worst, and if it doesn't happen, you'll be in a very good place.”
