40 | Design on module, no matter what.
Designing to standard lumber lengths, window sizes, and carpet widths can save money and reduce waste—no doubt—but it can also cost more if you lose sight of the bigger picture. “Don’t force the 4-foot module if it doesn’t make sense,” says Steve Moore, president of BSB Design. “The livability of the house isn’t necessarily improved by 2 extra feet, and it might be better to design a 38-foot-wide floor plan instead of the 40-foot deal if that allows you to increase your overall density and end up with an extra unit you can sell.”—J.S.
41 | Give your customers an invitation to comparison shop.
There’s a way to be honest about costs without giving away the farm. Specify a standard set of default products and include them in the base price of the home, advises building consultant Chuck Shinn. “You can allow customers to upgrade from there, but if they do, you only need to show the total cost difference between the upgrades they’ve selected and the standard package. That way they can’t comparison shop for individual products, and you are assured of making your margin.”—J.S.
42 | Put your mission statement in a drawer.
Google “mission statement builder” and 284,000 results pop up, most of them, with minor variations, saying similar things about pursuing “excellence” through “quality construction,” “customer service,” and “associate development.” But as businesses flourished and then foundered over the past decade, many builders abandoned those basic principles in their frenzied pursuit of growth and then survival. As you get back on your feet, you have a second chance to revisit and revise your mission statement, and to rethink how, in the next crisis, those words can withstand the pressures of expediency.—J.C.
43 | Forget about on-site safety.
OSHA’s latest enforcement tactic targets industries—including residential construction—with histories of violations, repeat offenses, and inherently unsafe working conditions. Of nearly 39,000 inspections conducted annually by the agency, more than 120 resulted in fines of $100,000-plus. Compare that to the $41.95 price tag for OSHA Quick Guide for Residential Builders and Contractors, a step-by-step guide to setting up a jobsite safety program.—R.B.
44 | Negotiate only on price.
Before you start talking (or arguing) price with a prospective buyer—or worse, giving in to a discount that narrows your margin even further—offer some indirect value, such as warranty upgrades, marketing help on a contingency sale, or touch-ups after move-in. “What [buyers] say they want isn’t always what they really need to get,” says Ed Brodow, a business negotiation expert and trainer in Monterey, Calif. Try the same tactic (with you as the buyer) with your suppliers to get better credit terms and delivery services that actually are worth more than a direct price cut.—R.B.
45 | Neglect your website.
Sure, you can save a few bucks without a webmaster to update your site periodically, but consider that surfing the Net for new homes is the first step in the process for about a third of all buyers, and 94 percent of them use it as a tool to search and refine their home buying choices at some point, according to the National Association of Realtors. ’Nuff said.—R.B.
46 | Forgo sales training.
“When times are slow and sales drop, the first place to point the finger is at the sales team,” says sales trainer Nicki Joy. “Builders have to pay attention to what drives the business [sales], but tend to view the salespeople as the least important thing.” So while cutting sales training—such as seminars, books, online coursework, or simple (yet effective) tactics such as role-playing, swapping leads, and shopping the competition—may appear to be low-hanging fruit to help right the budget, it’s actually killing the tree.—R.B.
47 | Blow off buyer research.
If the monthly Census figures on starts, sales, and permits are your alpha and omega on what’s going on in the industry, you need to stop navel gazing and explore forward-looking information sources. But be wary about predictions that hang the housing industry’s future entirely on demographic tectonics. Stay alert to the latest research on different buyer and owner groups, and spend some dough to compare broad brush findings with the finer strokes of your own focus groups to uncover what potential customers want (and will pay for), before they find it in your competition’s neighborhood.—J.C.
48 | Locate your plumbing runs all over the place.
Some builders believe taking the simplest route and planning ahead are for wimps. How else can you explain why they ignore stacking and consolidating plumbing runs in a central location and take the more difficult route of installing plumbing and mechanicals in multiple places? Complex plumbing runs mean home buyers will wait longer for hot water to move through the supply lines. It also means more money in materials and labor. Stacking saves money for builder and buyer.—N.F.M.
49 | Don’t build spec homes.
Even if you could get the money to build one, you couldn’t sell it, right? But consider the benefit of having something built and ready for a relocation buyer. In the meantime, the house can serve as a furnished model home, sales office, and/or design center. A spec home also can be a real-world training ground for your crews and subs and a chance to experiment with new products and/or launch a new floor plan to energize sales. “The more you can make it work for you, the better,” says industry consultant Al Trellis.—R.B.
50 | Avoid change at all costs.
Congrats, you made it through the downturn! Now what? “Go back to doing what worked before,” you say? Join the legion of builders that insists the housing recession was a cyclical blip, but no cause for drastic reinvention. That delusional view ignores how the recession has impacted customers and lenders in fundamental ways that have reshaped their perceptions about everything from quality and affordability to home ownership itself. Builders who stubbornly resist change because it’s complicated and uncertain should ask themselves: How much better off would your business be today had you made decisive changes before your markets imploded?—J.C.