IT: Protect Your Business with Data Backups
A recent study reveals 90% of companies that experience computer data loss go out of business within two years. Don’t let your company become an ill-fated statistic.

What would you do if you discovered that your computer system had crashed, and that all of your company’s customer data, accounting files, and project records were gone? Think of all that information, painstakingly entered over time, just gone forever.

It’s hard to imagine this disastrous scenario because computer systems usually operate so reliably. However, every computer system is susceptible to catastrophe; just ask someone who has been through it. The computer system that stores all of your mission-critical information is vulnerable to a range of problems, from viruses to theft to mechanical failure. Physical damage from natural disasters or accidental mishaps is also a possibility. Fires, earthquakes, and floods present a danger to hardware and data, as do broken water pipes and heavy falling objects.

Select this link for an explanation of the causes of data loss and the technology options available to protect data. In addition, you’ll learn some general tips for keeping your data safe.

HR: Incentive Compensation Systems
Compensation systems have three vital components: base salary, benefits, and bonus compensation. The base salary and benefits programs must be competitive to allow for successful recruitment of talented employees.

The bonus or incentive compensation has the most potential for retaining superior producers and rewarding employees for what they actually accomplish. They have potential to be great reward systems and excellent management tools.

Select this link to read a white paper on setting up a successful incentive compensation system that rewards employees for what they produce and ties together employee goals and company performance benchmarks. [return to top]

Change Order Pricing Strategies
Change orders are a fact of life for nearly all fixed-price contracts. Managed properly, change orders can keep you from losing money and time when clients decide to split a master bathroom in half after it’s been rough-plumbed or make other midstream changes to what you’ve contractually agreed to build or remodel.

Try the tips below on pricing change orders and communicating the costs to customers. They were contributed by 2004 Custom Builder Symposium attendees who traded strategies in a roundtable discussion.

• Include in your contract the price that you charge for change orders. You can add it before or after the description of your change order procedure. “If you spell out the procedure and price ahead of time, customers will accept it more easily,” says Dennis Dixon of Dixon Ventures, Inc., in Flagstaff, Ariz.
  
  
• Some builders charge for every change order. Some charge just for major ones. If you do the latter, you should still spell out the change order price in your contract. “To ease tension with the consumer, we only charge for substantial change orders,” says Kevin McGinnis of Period Homes in Fort Worth, Texas. “For those, we charge a flat fee of 25%.”
  
  
• It takes time to produce a change order, so make sure you get paid for it. “My minimum charge for change orders is $175 plus a managerial fee of $85,” says Dixon. “I charge the managerial fee only if a client says no to a change order. That way I get paid for estimating, etc.”
  
  
• Be sure to charge for additional labor when pricing a change order. The cost doesn’t only cover the material. “If someone wants to upgrade from standard hardware to a premium brand, the premium brand may take more time to install,” Dixon points out.
  
  
• Consider using a change order if a customer goes over an allowance amount. This provides an incentive for customers to agree on and stick to a realistic allowance amount. Giving your customers a list of approved vendors (instead of letting them pick out cabinets at the most expensive showroom in town) will help them stick to their allowances.

Additional Resources

Mark your calendar for the 2005 Custom Builder Symposium, which takes place November 11-13 in New Orleans, La. This annual, much-anticipated event offers world-class education, exceptional networking opportunities, and fun-filled activities for custom home builders, remodelers, architects, and other residential construction pros. For more details, contact NAHB’s Business Management Department at 800-368-5242, x8388 or business_management@nahb.com.

Need a change order form? With BuilderBooks’ Digital Delivery option, you can purchase this document online for less than $5 and start using it immediately.

http://www.nahb.org/biztools — The easiest way to get the solutions you need to face tough business management challenges.

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Does Your Business Measure Up?
Get your copy of the 2004 Cost of Doing Business Study and you’ll instantly see how your financial performance stacks up against the rest of the industry. The publication gives home builders a rare glimpse at other builders’ books by providing data about profitability, cost of sales, and expenses from hundreds of home builders across the country.
 
In this 2004 edition, you’ll learn how to develop cost control systems and get tips on cutting cycle time. Start working more profitably by ordering it today. [return to top]

Capitol Hill and Home Building
Congress is making progress on a variety of measures endorsed by the nation's home builders. A quick legislative roundup of the past two weeks reveals the following:

The Death Tax Repeal Permanency Act
Status: Passed by the House of Representatives on April 14.
Introduced earlier this year by Reps. Kenny Hulshof (R-MO) and Robert Cramer (D-AL), this bill was approved by the full House with broad bipartisan support. While it faces opposition in the Senate, this important piece of legislation would eliminate the need for heirs of family-run businesses (including home building companies) to sometimes liquidate company assets in order to pay the tax. Read more about it in our press release.

Ending Tariffs on Imported Canadian Softwood
Latest: More than 45 congressional lawmakers sent a letter to President Bush on April 19 urging the Administration to eliminate the duties. The message was spearheaded by House Republican Whip Roy Blount (R-MO), Minority Whip Steny Hoyer (D-MD), Appropriations Subcommittee Chairman Jim Kolbe (R-AZ) and Ways and Means Committee member Richard Neal (D-MA), who asked their colleagues to join them in telling the White House that unwarranted lumber tariffs are harming housing affordability. Read more here, or contact Jason Lynn at 800-368-5242, x8307.

The Small Business Health Fairness Act
Latest: Two important hearings were held last week in hopes of generating crucial Senate support for bills that would allow the formation of Association Health Plans. On April 20, the Senate Small Business and Entrepreneurship Committee, led by Chairman Olympia Snowe (R-ME), held the first hearing on the need to help small businesses secure more options for affordable health coverage on behalf of their employees. The second hearing, on April 21, was held by the Senate Health, Education, Labor and Pensions Committee and focused on how the pending legislation would help alleviate the rising number of uninsured and the soaring costs of healthcare. Read about it in our online releases regarding the first and second hearings, or contact Jenna Morgan Hamilton at 800-368-5242, x8407, for more information. [return to top]

Tsunami Shelter Fund at Work
In the spirit of Home Builders Care, NAHB and the National Housing Endowment have united to provide long-term shelter reconstruction support to those affected by the devastating earthquake and tsunami in South Asia on December 26, 2004.

Formed just after the International Builders’ Show in Orlando, the Home Builders Care/National Housing Endowment-Tsunami Shelter Fund will fund permanent home reconstruction along with education and training that will enable communities to sustain and participate in the ongoing rebuilding effort, which is estimated to take decades.

Nearly four months have passed since the Indian Ocean quake set off one of the deadliest tsunamis in history, killing an estimated 280,000 people in 11 countries. The March 28 earthquake reported off the cost of Indonesia may bring world attention once again to the region. However, stories of tsunami tragedies, survival, and rebuilding challenges for the 1.2 million people left homeless are largely absent from today’s news. For that reason, it is even more important for our industry to step up to support the ongoing reconstruction of homes and villages and to help restore a sense of community to the victims by addressing long-term housing needs.

While many individuals, companies, and home builder associations already have given to relief organizations that provided immediate medical and emergency needs, the Tsunami Shelter Fund picks up where that vital assistance leaves off.

Beginning shortly after the International Builders’ Show, a team, led by past president Bob Mitchell, conducted a series of interviews and conference calls with a number of established relief agencies to determine who could best help NAHB and the Endowment carry out its mission. At the Spring Board of Directors meeting, the Senior Officers and the National Housing Endowment Board accepted the search team’s recommendation to partner with two organizations—Habitat for Humanity International and Shelter For Life International.

Habitat for Humanity International already is working in four of the affected nations in South Asia, and has set a goal of housing up to 35,000 families in its first phase effort. The organization already has raised nearly $39 million toward this goal.

NAHB will direct a portion of the funds raised by the Tsunami Shelter Fund to support the construction of a Disaster Response Technical Center in one of the affected countries. These centers provide technical expertise and assistance to families, Habitat affiliates, and partners during the first stages of construction and are a resource to produce building materials.

NAHB and the National Housing Endowment also will partner with Shelter For Life International (SFL) to build a “Home Builders Care Village” of starter homes in Sri Lanka. SFL is a 25-year-old international relief and development organization that assists people affected by conflict or disaster to rebuild and improve their lives and communities.

For the last six years, SFL has been working in Sri Lanka, helping rebuild after a 20-year civil conflict displaced 10 percent of the population. In addition to rebuilding homes, SFL provides training workshops to help the local population learn to make blocks and other materials that can sustain the rebuilding effort.

NAHB seeded the Tsunami Shelter Fund with an initial $250,000 contribution; an additional $56,000 has been raised thus far. NAHB is encouraging members to participate by making a tax-deductible donation to the fund to support this important rebuilding endeavor. Please direct your donation check to:

National Housing Endowment
1201 15th Street, NW
Washington, DC 20005

Checks should be made payable to the National Housing Endowment. In the memo section, please note Tsunami Shelter Fund.

For more information, please contact Troy Patterson at the National Housing Endowment at 800-368-5242, x8483, or tpatterson@nahb.com or Kym Kilbourne in NAHB Public Affairs at 800-368-5242, x8447 or kkilbourne@nahb.com. [return to top]

NAHB’s Redesigned Web Site
Web experts agree that updating the look and feel of a Web site helps increase overall site awareness and interest. That’s why NAHB’s Online Relations team has created a new look that gives www.nahb.org a refreshing visual change, while maintaining the best-in-class functionality our users have come to expect from NAHB.

Launched the first week in April, the redesigned Web site features an updated look-and-feel, improved login usability, and targeted Welcome message to help visitors find information that has been developed exclusively for them.  The site will continue to provide visitors who log in with nearly 5,000 pages of valuable home building content, as well as our robust ‘My NAHB’ feature which lets users personalize the site to their specific interests.

When you explore the redesigned site, visit Business Management Tools (www.nahb.org/biztools). You’ll find nearly 200 articles, books, courses, and other resources to help you manage your business more effectively and increase profits. These resources will help you gain a better understanding of strategic planning, time management, information technology, human resources, customer service, and other functions vital for a well-run business. [return to top]

Business Opportunities From NAHB’s Councils and Departments

Reward and Motivate Your Sales Team

Strong sales—and motivated salespeople—are the lifeblood of successful home building businesses. Sponsored by NAHB's National Sales and Marketing Council, Million Dollar Circle awards are a cost-effective way to recognize leading salespeople and sales managers for producing millions of dollars in sales each year.

Million Dollar Circle citations are available in bronze, silver, gold, and platinum levels to correspond to a million dollar sales mark. The program also offers lifetime plaque awards for those with six or more years of million dollar sales, as well as lapel pins. New the year is the Chairman’s Sales Leadership Award, a high-profile award for those who have reached $50 million or more in new home sales.

Order your Million Dollar Circle awards online today at www.milliondollarcircle.com. 

Explore the Active Adult Market

Presented by NAHB's Seniors Housing Council, Building for Boomers & Beyond: Seniors Housing Symposium 2005, is an educational and networking conference for builders, developers, and other industry professionals who serve the 50+ Market. The conference takes place May 16-18 in the Washington, D.C., metro area (Chantilly, Va.).

New this year is “How to Get Started in Active Adult Housing,” a pre-conference course on how to break into the fastest-growing segment of the housing industry, and “Designing for the Active Adult,” the first course in the Seniors Housing Council’s Professional Development Series.

Select this link to register online. For more information, contact the Office of the Registrar at 800-368-5242, x8338, or visit www.nahb.org/build4boomers.

Learn Design Trends and Strategies

The 2nd NAHB/BALA Design Institute for Builders takes place June 13-15 at the Westin Tabor Center in Denver. During this education event, you’ll learn the latest in residential housing design trends from the industry’s top design professionals; tour award-winning homes and communities that display the latest in cutting-edge architectural design; and learn how to profitably apply these design ideas to the homes you build.

Select this link for more information, to register, and to view the full schedule of events.

Participate in the Concrete Technologies Tour

Sponsored by NAHB’s Concrete Home Building Council, the Concrete Technologies Tour takes place June 26-28 in Kansas City, Mo. This brand-new event will give builders, designers, and other residential construction professionals a broad view of the regional differences in production and building trends, a working knowledge of all types of cement-based materials, and an understanding of how to implement current industry trends into their own businesses. 

Select this link to register online. For more information, visit www.nahb.org/concretetour.

Enter the Mexican Housing Market

Attend the 3rd International Housing Conference of the Americas and gain critical initial contacts with professionals in Mexico’s burgeoning residential construction industry.

The conference will be held November 3-5 in Mexico City at the Four Seasons hotel. The conference features six educational sessions, a property tour of higher-end housing, exhibits, and multiple networking opportunities with industry leaders and government officials.

As an added bonus, the first 100 registrants to the 3rd International Housing Conference of the Americas will receive a complimentary registration to the 2006 International Builders’ Show in Orlando, Florida.

Select this link to learn more about this successful conference series. Questions? Contact NAHB International at 800-368-5242, x8417. [return to top]

Member Advantage: Get GM Discount Pricing on More Than 80 GM Vehicles
GM is offering preferred supplier discount pricing on more than 80 General Motors vehicles, including Chevrolet, Pontiac, Buick, GMC, Oldsmobile, Cadillac, Saturn, HUMMER (except H1), and Saab passenger cars, light duty trucks, vans and SUVs as part of NAHB’s Member Advantage discount program.

Through the program:

• NAHB members get Preferred Supplier Pricing on all eight GM nameplates.
• NAHB members can realize the benefits of other GM offers in addition to the supplier price.
• NAHB members will receive their authorization codes and program details via direct mail from GM.
  
  For complete details, go to www.gmfleet.com/nahb. The GM Preferred Supplier Pricing program runs through Jan. 3, 2006.

Other Member Advantage Discounts|

For the most up-to-date details on the Member Advantage discount program and all of the participating companies, go to http://memberadvantage.nahb.org. Or visit www.nahb.org to explore the full range of benefits associated with membership in your local, state, and national home builders associations. [return to top]