Get a Grip on Processes to Lower Overhead, Boost Margins
Working smarter, not harder, is key to taking profits to new levels, builders say

Mastering the intricacies of your home building business processes requires the same time and commitment as it takes to perfect your golf swing—maybe more.

The feeling that the business was running them—a sense margins were sub-par, even as volume increased and staff was working harder and longer—prompted Bill and Scott Jagoe, Jagoe Homes, to get a grip on their processes: the systems they were using to support the company’s sales, construction, service, and other functions.

“We sold a lot of houses, but behind the scenes was chaos,” Bill and Scott recalled during a Business Management education session at the International Builders' Show. “We were starting a lot of houses but our processes were fragmented …The business was managing us!”

To overcome these problems, in 1995, Jagoe decided to look beyond its limitations and find a way to replicate good results, improve communication, create a customer-focused culture, and deliver a better product and experience for its customers.

With the help of industry consultants in sales, back office, and product development, Jagoe:

• Developed specific and repeatable processes and procedures
• Established key measures and clear accountability
• Evaluated staffing and ways to measure performance
• Committed to achieving results

Read about how this regional production builder calmed the back-office chaos, improved cycle time, and took its customer service and margins from good to great with an ongoing focus on processes, rather than just projects.

Avoid Getting Eaten by Technology “Monster”
To reduce cycle time, expand jobsite communication and improve cost management, builders need to integrate field and back-office processes and be able to connect with vendors easily.

At the TecHOMExpo at the International Builders' Show, builders and vendors offered tips for finding the best technology solution to meet your business' needs. Read their tips to plan and shop for that all-important "solution," but don't expect a magic bullet. [return to top]

Six Areas to Watch in Your Operations and How to Measure Them
If you picked up The Cost of Doing Business Study 2006 Edition, during the International Builders’ Show, you already have an invaluable tool for benchmarking your company’s performance against that of other home builders.

However, it’s more difficult to obtain outside data on the six areas you should be watching in your operations:

• Efficiency and productivity
• Sales and marketing
• Quality
• Schedule
• Construction
• Customer satisfaction

CPA Steve Maltzman, president of SMA Consulting, says it’s best to accumulate benchmarks for these areas internally, to measure your performance going forward. Read about how you can do this. [return to top]

EPA Offers Guide, Checklists Developed in Consultation with NAHB
Managing Your Environmental Responsibilities: A Planning Guide for Construction and Development is available free to help builders and developers understand the wide range of federal environmental requirements that may apply to their projects, including those pertaining to:

• storm water permitting
• dredge and fill/wetlands permits
• oil spill prevention
• hazardous and non-hazardous solid waste
• hazardous substances
• polychlorinated biphenyl waste
• air quality
• asbestos
• endangered species act

The guide is intended to be used in the earliest stages of a project to ensure that all federal environmental requirements are met. 

One of the most useful components of the planning guide is a self-audit checklist section that helps construction and development companies evaluate their compliance.

To read or download the planning guide, go to the Construction Industry Compliance Assistance Web site at www.cicacenter.org/links.   A free hard copy can be ordered from the National Service Center for Environmental Publications at 800-490-9198. You must specify document number EPA/305-B-04-003 when ordering.

For more information contact Kimberly Porter, kporter@nahb.com, 800-368-5242 x8662 or Marolyn Parson at x8157 or via e-mail at mparson@nahb.com. [return to top]

Receive Full-Text Biztools Articles Free By E-Mail
Executive Officers and other HBA staff looking for timely business management information to convey to members can receive FREE full-text articles monthly via e-mail from www.nahb.org/biztools.

To activate your free subscription, simply send an e-mail message with the subject line "Electronic EO mailing" to nholmes@nahb.com. [return to top]

Make Your Building Business More Profitable in 2006!
Whether you build two homes a year or more than 1,000, the National Association of Home Builders’ Cost of Doing Business Study is the most important book you’ll read this year. This one-of-a-kind resource gives you the unique opportunity to compare yourself with other builders across the country. See how you measure up with industry-wide averages in these important areas:

• Gross margin and net profit
• Cost of goods sold
• Financial ratios (Current Ratio, Debt-to-Equity Ratio, and more)

The Cost of Doing Business Study has the data, analyses, and guidance you need to boost profitability, increase efficiency, set realistic budget targets, and improve your business practices.

To purchase the Cost of Doing Business Study and other Business Management titles, go online to  www.BuilderBooks.com or call 800-223-2665. [return to top]

Improve Your Efficiency with Tested Forms
The most successful home builders are those who develop standard processes for managing their day-to-day business operations. Systemizing your business can make you more efficient, productive, and profitable. Using the resources in Home Builder Contracts & Construction Management Forms is a major step forward in saving time and money and streamlining your business operation.

Home Builder Contracts & Construction Management Forms, second edition, contains 95 documents specifically for residential construction. You will find various contracts, specifications, change orders, and many more forms and checklists that will improve your ability to manage your building business. These documents are a compilation of business resources that were generously donated by successful builders across the country.

To purchase Home Builder Contracts & Construction Management Forms and other Business Management resources, go online to www.BuilderBooks.com or call 800-223-2665. [return to top]