Monday, September 10, 2012

Avoiding Business Failure for Modular Home Builders

Every day we hear about another builder going out of business.  Even though the economy is picking up a little, some builders just can't seem to make it.  There are some major areas that need constant attention in order to remain successful.

Just don’t let your guard down and fall into one of these sure fire ways to kill your business:

  • FAILURE TO UNDERSTAND YOUR MARKET.  If you don’t have a marketing plan that states just who your customer is and why they should spend their money on one of your houses, you’ll be one of the first casualties of the post recession new home wars.  Builders that survive these tough times will be going after the new home buyers with a vengeance and without knowing who your customer is, it will be tough to compete.
  • FAILURE TO ANNOUNCE WHAT MARKET YOU’RE SELLING TO.  Just because there is a recession going on, refuse to be a part of it.  You don’t have to spend a fortune to get your message out.  Make sure your offices, trucks and showroom are clean and neat.  Hand out your business cards to everyone you meet and tell people what type of home you build…green, Energy Star, system built or whatever is your niche.  Go after your ideal customer with direct individual mailers stuffed with your factory’s literature.  Just do something.
  • FAILURE TO HAVE ADEQUATE CASH.  If you don't have enough cash to carry you through the sales cycles and downward trends, your prospects for success are not good. Start hoarding money by saving on things you can do without and save money by getting rid of things you have that are dragging you down such as that backhoe that you haven’t used in 4 months or extra staff or advertising in the newspaper. This is probably the biggest one failure that crashes most builders.   

  • FAILURE TO DEFINE YOUR BUILDING STYLE.  Trying to be everything for every new home buyer is tough.  Oh I know, sticks, steel and glass can be made to look like anything the customer wants but can you really do it?  If you are a luxury home builder, how will you relate to the “affordable” home buyer?  Will you suggest things out of their budget and then watch as they run away.  Or if you build modest houses, do you really think that you and your workers are prepared for all the luxury items the affluent buyer wants and can afford.  Produce homes that you are comfortable building.
  • FAILURE TO MANAGE.  Management of a business encompasses a number of activities: planning, organizing, controlling, directing and communicating. The cardinal rule of small business management is to know exactly where you stand at all times. A common problem faced by successful companies is growing beyond management resources or skills.
If your business is slow because of the recession or whatever, take this time to get ready for the pent up post recession home buying season.  If you do this while things are slow and you’ll be better prepared for the future.

No comments: