Whether you’re a new or experienced home builder, now is the time to think about the future.
It’s a great time to be a home builder. Despite the growth of large, publicly-traded builders in recent years, the residential construction industry remains dominated by small players, according to the National Association of Home Builders. More than 60 percent of the organization’s members build ten or fewer units each year and generate less than $1 million in total business. These small and regional companies represented more than 46 percent of the U.S. home-building market in 2015.
But even the rosiest outlook will not deliver for your company without a comprehensive, long-term strategy to back it up. Check the following three boxes, and you’re well on your way to success.
Lean and mean leads to growth
Local builders have many advantages that can work in their favor – especially when it comes to marketing. A shoestring budget can seem daunting at first, but if allocated wisely, it can pack quite a punch. Professional Builder magazine recommends no more than 1.5 percent of projected revenue go towards marketing. One condition – at least half of that amount should be spent on digital platforms.
While most statistics show that roughly 90 percent of new-home sales begin online, many builders devote just 30 percent of their marketing budget to digital. Smaller companies have a huge opportunity to see significant returns simply from increasing their digital marketing spend. This can take the form of online ads, social media, photo galleries, and video.
A note of caution before diving into the deep end of digital – make sure your own house is in order. Potential customers who click on your ad or post expect a mobile-responsive website, compelling photography, virtual tours, and a vibrant social media presence.
Beef up the back end
The daily operation of your firm should be a well-oiled machine, with processes and systems that complement your team’s strengths and reflect industry best practices. Too many builders, particularly small firms, rely on the “database” of institutional memory rather than strategically conceived systems that evolve from the company’s vision.
Gadgets are great, and they can save time in certain environments, but old-fashioned, in-person communication goes a long way to ensuring a healthy and productive corporate culture. Don’t be allergic to meetings. If done smartly and with clear ground rules, you can thrive on 7-12 minutes a day and one 30-minute sit-down a week to keep the wheels turning smoothly.
On the other side of the equation, savvy use of technology can smooth over rough processes. Cloud accounting software allows for real-time data review and reporting accurate financial forecasts, and alerts you to pain points or untapped opportunities.
Invest in your people
Staff is more than just cogs in your company’s machine. They are its lifeblood, representing its values internally and to the world. Proper investments in their wages, time, and energy can yield greater efficiency and even cost savings down the road.
When hiring in today’s market, certain skill sets have become much harder to find. It is becoming common in the builder segment for companies to relocate employees, hire those who have recently left the industry, or bring back colleagues who have started their own companies. You may also want to consider a recruiter – a bad hire can have a chilling effect on office morale and prove a cost liability of its own.
Plan now or pay later
Carving out time and space for long-term strategic planning can seem inconvenient. The process of changing long-held beliefs and outdated modes of thinking that are decades in the making can be challenging. But with diligence and clear communication throughout the company, real progress is possible. Rather than react in the moment to the market, natural disaster, or other unforeseen events, your company will be proactive, taking prudent steps today to minimize the effects of tomorrow’s uncertainty.
