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Two Sure Ways to Improve Profitability
 Charles Shinn, Jr., president of the Lee Evans Group and Shinn Consulting based in Littleton, Colo., does not necessarily believe that hiring extra staff is the answer when your business is stressed, pressed and overworked.
Instead, Shinn recommends two sure ways to improve profitability — without adding staff:
- Develop a Culture of Discipline.
- Stick to Your Bottom Line
A Culture of Discipline
Shinn, who led an NAHB Business Management education session during the International Builders’ Show in Orlando, Fla. earlier this year, said builders should assess their management systems before bringing on more staff. By doing so, he said, you may discover how many man hours and how much money you’re wasting by relying on poorly designed systems, outdated processes and untrained employees and subcontractors.
“Sometimes you need to improve management systems, rather than hire people,” said Shinn, who noted that it is easier to hire people than to fire them.
Stick to Your Bottom Line
Shinn also stressed that it is important for builders and others in the industry to establish a minimum gross profit — and then stick to it.
While the typical builder earns 5% net profit, Shinn says the best-run home building companies net more than 25%.
“Stop giving things away,” he said, while noting that some builders who operate this way should consider calling themselves nonprofits. “At least you’d get some PR.”
Direct construction costs are the variable, he said. “Do not treat profits as a residual.”
The bottom line, Shinn said, is to make your business systems consistent, reliable, efficient and effective. In short, develop a “culture of discipline,” he said.
To read more Shinn tips on how to improve profitability, visit this new Business Management Resource in the Business Management Tools section of the NAHB Web site: www.nahb.org/biztools. (This link is available to NAHB members only.)
For more information, e-mail Charles Shinn, Jr. or visit www.leeevansgroup.com or www.shinnconsulting.com.
 NAHB Technology Solutions Directory Now Online
NAHB’s Technology Solutions Directory — an easy-to-use directory that enables builders, remodelers, contractors and other industry professionals to find information on software and IT solutions and services for their businesses — is now online. The directory is sponsored by the Business Management & Information Technology Committee.
Software and technology solutions providers interested in being listed can sign up for:
- Enhanced Listing — Listing includes company name, URL, e-mail address, mailing address, phone number, company/product description, company logo. Click here for more information.
- Standard Listing — Listing includes company name and phone number. Click here for more information.
For more information, e-mail Wil Heslop at NAHB.
The Technology Solutions Directory is solely for educational and informational purposes. Nothing in the directory should be construed as policy, an endorsement, warranty or guaranty by the National Association of Home Builders of the listed software, IT service or the software/IT vendor. The National Association of Home Builders expressly disclaims any responsibility for any damages arising from the use, application or reliance on any information contained in this directory.
NAHB Has More Than 250 Resources to Help You Run Your Business More Profitably
Go to NAHB's Business Management Tools Web pages (available to NAHB members only) for instant access to more than 250 timesaving, moneymaking and cost-cutting business resources to help you run your business more profitably. Get guidance on accounting and financial management, business strategy, computers and information technology, customer service, human resources and more.
Resources are added weekly, so bookmark www.nahb.org/biztools to go directly to these vital business management resources.
Local and state home builders associations can link directly to www.nahb.org/biztools from their Web site and give their members instant access to these resources. It will make your association's Web site the place to go for the information and guidance that members need to succeed.
Subscribe to NAHB’s Business of Building e/Source
NAHB’s Business of Building e/Source is your monthly electronic guide to the hot issues and emerging trends in home building business management. You’ll find practical advice, tricks of the trade and sound business guidance — all delivered monthly, straight to your desktop, in a quick and easy-to-read format.
Business of Building e/Source is available free to NAHB members and their employees.
To subscribe, visit www.nahb.org/BoB on the Members Only side of the NAHB Web site.
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