Custom Builders Get Lessons in Brand-Building, Systems, More
More than 400 custom home builders traded ideas about increasing profitability and improving their business management and saw the latest trends in design, products and services during NAHB’s Custom Builder Symposium in Atlanta last week.
Building your brand, managing client demands, providing excellent customer service, scheduling jobs, incorporating “green” features, working with architects and managing risk were among the issues discussed in seminars.
Roundtable discussions focused on balancing work and family, technology, disaster preparation and other topics.
A Chance to See the ‘Big Picture’
“I came to the Custom Builder Symposium to recharge my batteries, get away from the day-to-day concerns and look at the big picture,” said Richard Woodford, of Empire Development based in Bethel, Conn.
Rodney Miller, director of corporate training for Florida Power and Light and keynote speaker, encouraged all participants to do just that.
“What gets you through running a family business, a multimillion dollar business that can turn on the sale of a home, the vicissitudes of interest rates and empty nesters? Number one, it is your attitude,” said Miller, who has consulted with Fortune 500 companies, most recently with Walt Disney World.
Some pointers offered at the symposium included:
What to Consider When Building Your Brand
David Haifleigh, president of HaifleighBrandWorks in Denver, provided a seminar on branding and told builders to consider four areas when developing their brand.
- Organization — What do you want to do? What do you stand for?
- Your customer — Who are you targeting and why?
- The competition — There probably are only three or fewer other businesses with whom you compete.
- Products and services you offer — These will change over time.
‘Green’ Tips for Energy Savings
During a seminar on green building, Peter Pfeiffer, FAIA, of Barley & Pfeiffer Architects in Austin, Texas, told attendees how orienting a home properly on a site, using materials and exterior colors appropriate for the climate, wrapping the exterior and shading windows can yield tremendous energy savings.
It’s Okay to Avoid Challenging Customers
Carol Smith, a customer relations consultant from Monument, Colo., told attendees that it’s probably better to avoid impossible-to-please customers than to work with them.
“These are the people that if you gave them a magic carpet, they would complain about the color,” Smith said. “You do not want to deal with them. You do not want them as customers.”
Smith suggested that builders should thoroughly screen their customers to avoid these types of clients. “Never underestimate the benefit of referring an unreasonable customer to your competition,” she added.
Effective Business Systems Are Essential
Dennis DuRoff, president of Universal Business Design in Seattle, discussed how effective business systems are essential to business success.
“You have risked everything to build your business and you are at risk every day you have your door open,” DuRoff said. “The only way to get away from being a control freak is to have systems in place and know they’re running like clockwork.”
He said systems should include checklists that help organize people’s thinking and control the paperwork as well as tools to help builders adhere to high standards and reach the benchmarks that will help them achieve larger goals such as a smooth-running change order process, a clean and organized job site at the end of the day and reduced billing cycles.
Construction Management May Mean Less Risk
During a seminar about operating as a construction manager rather than a general contractor, Mike Holmes, of Holmes Construction Co., pointed out that the construction management approach can mean decreased insurance premiums, less financial risk, reduced paperwork and the ability to avoid becoming entangled for months or years in no-win situations with customers.
As part of the symposium, 18 builders from 13 companies were honored for their success in either marketing, management, customer service, design, production and innovation ― all categories critical to success in custom building.
The winners were:
- Mark A. Perlman, Empeco Custom Builders
- C. Mason Hearn Jr., HomeMasons
- Craig Denman, Denman Construction
- Mimi Kress, Phil Leibovitz, and Richard Mandell, Sandy Spring Builders
- Alan Banks and Chris Folk, Evans Coghill Homes
- Grant Rhode, GF Rhode Construction
- Nancy and Rich Morrison and Irina Johnson, Benchmark Custom Luxury Homes
- Mike Holmes, Holmes Construction Co. Inc.
- Richard Laughlin, Laughlin Homes & Restoration
- Ron Merigold, Merigold Corp.
- Gus Rubio, Gabriel Builders
- Andrew Wright Suman, Röhe & Wright Builders
- Jerry Bonner, Bonner Custom Homes
The awards were sponsored by NAHB’s Custom Home Builders Committee and Custom Home magazine. The winners will be featured in an upcoming issue of the magazine.
Materials, Labor Update
Symposium participants also received an update on construction materials prices and availability from Michael Carliner, NAHB staff vice president for economics, in which he said that pre-Hurricane Katrina materials shortages were not going away and could get worse, but rebuilding is a long way off so the storm’s aftermath probably would not have a large short-term effect on materials availability, except for roofing materials and materials derived from oil and gas production.
“Supply and demand shocks affecting wood products are quickly reflected in prices, rather than in actual shortages. You can always get it if you are willing to pay the price,” Carliner said, but with other materials “it often becomes a question of availability, rather than price increases.”
The producer price index showed a 5% increase during the past year in all materials that go into new home construction, Carliner said, with declines in wood prices offsetting increases for other materials. While he suggested that builders consider locking in prices on some materials, possible materials shortages are a threat as well.
U.S. production capacity for materials such as cement, OSB and gypsum is probably maxed out, Carliner said, while noting that cement producers were allocating or rationing cement's distribution in 23 states.
Builders in some parts of the country recently have reported more problems with the availability of brick than cement, he added. Some were seeing shortages of roofing materials and insulation as well.
Carliner also reported that construction unemployment was down compared with 2004 and that half the builders responding to NAHB’s monthly builder survey reported a shortage of framers.
His presentation, Hurricanes, Materials and Home Building and the PDF file Building Materials After Katrina can be found on the NAHB Web site at www.nahb.org/biztools.
The 2006 Custom Builder Symposium will be held on Oct. 27 – 29, 2006 in Lake Las Vegas. For more information, visit www.nahb.org/custom.
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