Monday, March 16, 2015

A Modular Home Builder Reinvents Itself After 2008

Before the 2008 housing recession, Shorten Homes in Scranton, PA was riding high selling almost 200 homes a years. Tens of millions of dollars went through their books and everything seemed poised for a good 2008.


How quickly reality set in. Within a year they dropped to just a couple dozen homes and things looked bleak but they sat down and rebuilt their business from the ground up and today they are a stronger company than they were prior to 2008.

The Scranton Times-Tribune just ran a story about several Northeast PA businesses that survived the recession and rebounded. Shorten Homes was one of the ones featured in their article.

Here is an excerpt from that article that talks about Shorten Homes:
Hit bottom, rebuild
 When a company is cut down to just about nothing, view it as an opportunity to fix problems and rebuild from scratch.
 Dickson City modular homebuilder Shorten Homes had a front-row seat for the immolation of the housing market as sales went from a healthy 190 homes in 2007 to a few dozen the next year. Things did not bounce back the following year or the year after that.
 “It took a lot of time, a lot of streamlining,” said James Shorten, a special adviser to the business headed by his grandfather. “There was no light at the end of the tunnel, and we had to do it again.”
 The company let go of three-fourths of its sales staff, did away with company cars and other perks and fixed a range of internal issues.
 “When you have cash flow of tens of millions of dollars it obscures problems. When things are great, you aren’t looking to make them better,” he said. “When that money is gone, the problems become obvious and you have to fix them. In a recession, time is not on your side.”
 The company changed its sales approach. Instead of just selling homes, they wanted to sell the experience of buying a home. When people visit Shorten, Mr. Shorten reasons, they’ve already decided they want a home. So Shorten tries to offer a superior home-buying experience. They’ve rebuilt a team of employees all on the same page.
 Now with a refined approach, new website and two new demo homes, Mr. Shorten hopes the company is positioned to take advantage of a great season in the midst of an improving economy and interest rates still near historic lows.
 Last year, he said, was a turnaround year, when Shorten began to regrow and really make money again.
 “We made crucial decisions and we are building on what we’ve done,” Mr. Shorten said. “Everything is in place and we are on the brink of a fantastic year.”
With Ritz-Craft and Pleasant Valley Homes supplying their ever expanding housing needs, they are once again a force to be reckoned with in Northeast PA and beyond.

No comments: