Take the Time Now to Increase Efficiency and Reduce Costs

The current housing slowdown may be a perfect time to begin implementing changes in your business practices, software and technology that can increase efficiency and reduce costs.

The changes that you implement now will set you on a path of greater efficiency and cost savings that much sooner and will benefit you over the long haul.

Quite frankly, another reason to implement these efficiency changes now is because you probably have the time to see the changes through to completion.  

Changes can be made in the software and systems that you use. Changes can also be made with the people you work with, how efficiently they work and with what you actually build.

On the systems and software side of business, there are five basic changes that can be made to increase efficiency and reduce the need for costly employees:

1. Implement Systems. Building a home is a complicated process that requires robust systems that run smoothly. Create a system for receiving, approving and processing invoices that eliminates ambiguity and is easily repeated.
   
   Another system worth implementing is a home buyer selections process that documents all the details and clearly communicates them to the appropriate people on staff so the systems runs smoothly, does not delay construction and keeps customers happy.
   
   
2. Implement Software and Technology. Take the time to learn how to download pictures from your digital camera and send them to your home buyers. 
   
   Also, learn how software can help your operations like estimating, scheduling and job cost reporting.
   
   
3. Start Training. Train employees about your new systems and software. Training can be done by someone on your staff to save money or by an external expert.
   
   Also, cross train your staff so they can do multiple jobs and have a better understanding of the overall process as well as the needs of others on staff. Cross training leads to breakthroughs in communication and continuity when someone is gone.
   
   
4. Increase Web Site Functionality. Take the time to ensure your Web site has been updated and is accurate.
   
   Add home buyer portals to your site that improve communication of budgets, selections and schedules.
   
   Add listings of your available homes and models, including directions and available hours.
   
   
5. Use Value Added Trade Partners. Bring on trade partners who add more capabilities to your business. 
   
   For example, find a finance company that will customize a plan to meet your specific needs. Talk to architects to discover which ones are builder-friendly.
   
   Learn about green building from a company that adds value to your clients. 

There are also five basic changes you can implement that will help you reduce costs now and in the future:

1. Reduce Fixed Overhead Costs. Now is the time to downsize the people on your staff who you don’t value or you doubt will be with you for the long haul. Consolidate regional offices and sell off your models.
   
   
2. Build Only Contracted Homes. The luxury of selling a spec home before it’s completed is gone. Spend your dollars on homes that have a contracted buyer.
   
   Building a spec to stay busy is an unneeded expense. Instead, make arrangements with prior home buyers to use their home for occasional tours.
   
   
3. Bring Expertise In-House. Figure out which services you efficiently can do internally that you are currently paying someone else to perform. Adding operational skill sets will also have a long-term financial impact on your business operations.
   
   
4. Work With Vendors to Reduce Costs. Take the time to talk to your vendors and trade partners to discover if there are ways to reduce costs for all concerned.
   
   Some ways to reduce pricing can be found in standard bids, prints online and written work orders.
   
   
5. Eliminate Mistakes and Implement Processes to Avoid Them in the Future. Document your details to avoid costly mistakes. 
   
   If mistakes do occur, then implement long-lasting corrections. Take the time to truly fix the problem and install measures so the mistakes do not happen again.

Set yourself up to survive now and to thrive in the future. Now is the time to take positive steps forward.

Andy Elsbury is the founder of Indianapolis-based SelectionWare, which provides consulting services and solutions for home builders to improve the building process. For more information, e-mail Elsbury, call him at 866-585-9222 or visit the SelectionWare Web site at www.SelectionWare.com.

NAHB Has More Than 300 Resources to Help You Run Your Business More Profitably

Go to NAHB's Business Management Tools Web pages (available to members only) for instant access to more than 300 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 HBA's Web site the place to go for the information and guidance that members need to succeed.

Add Success to Your Schedule

Missing a deadline can seriously damage your bottom line. The "Scheduling" course from The NAHB University of Housing shows building professionals how to set workable schedules and use various time-management tools.

The course teaches the benefits of scheduling and integrating scheduling with other management activities and will help builders, remodelers and site managers deal with those days when nothing goes according to plan.

Find upcoming Scheduling courses here, or call 800-368-5242 x8154 for more information.

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