February 21, 2007
 
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'I'll Bet You Have Communication Problems'
Try these tips for tackling a universal business management challenge from experts who presented at the 2007 International Builders' Show

“I’ll bet you have communication problems here.”

Scott Sedam, president, True North Development, Inc., recalls an associate who likes to greet hotel desk clerks and others he meets in his travels with that observation.

The matter-of-fact declaration establishes instant rapport and people are often taken aback by the insight. But Sedam says what may seem like a Kreskin-esque trick is actually no magic. In any company or corporation, “miscommunication is the default option,” he explains. That's why it's so important to make improving communication a goal for your business, says Sedam, a business management trainer and quality consultant to the home building industry.

 

Read his tips and those of other experts who have worked with builders nationwide on solving their toughest communication problems to increase quality, customer satisfaction, and referral sales.
Expert Advice on Growing Profits in Any Housing Market
Not only can you survive a dip in the housing cycle, you can grow your profits when the market is soft. Just don’t—in today’s market or any market—give up gross margin to grow top-line revenue. In fact, the single biggest mistake any builder can make (you may already have learned this lesson the hard way) is to sell more homes than you can build.

“Can you really afford to sell a house today that you’re not going to deliver for 14 months? Just think of the mess that’s going to create,” says Bob Whitten, a former building company executive who is now managing partner of SMA Consulting. While 20% is a respectable growth rate, 100% growth is not sustainable, he says.

 

Whitten offered some secrets to growing your company and profitability, even in a down market, at the 2007 International Builders’ Show in Orlando. Read some of his tips. [return to top]

Don't Forget to Claim Your Telephone Tax Refund
The Treasury Department announced in May that the government would stop collecting the federal excise tax on long-distance telephone service beginning Aug. 1, 2006, and provide refunds for taxes billed after Feb. 28, 2003.

Businesses and tax-exempt organizations can figure their refund amounts by comparing two telephone bills from this year to determine the percentage of their telephone expenses attributable to the long-distance excise tax. The bills they should use are the bill with a statement date in April 2006 and the bill with a statement date in September 2006. They must first figure the telephone tax as a percentage of their April 2006 telephone bills (which included the excise tax for both local and long-distance service) and their September 2006 telephone bills (which only included the tax on local service).  The difference between these two percentages should then be applied to the quarterly or annual telephone expenses to determine the amount of their refunds. Read more. [return to top]

Get a Free Copy of NAHB's Cost of Doing Business Study
For more than 35 years, NAHB's Cost of Doing Business Study has been helping builders like you benchmark their business performance. With the next edition of this definitive nationwide study under way, you have an opportunity to get your own free copy of The Cost of Doing Business (a $99 value).

To participate, go online to www.nahb.org/cost by Feb. 28.

Fill out the online form to have a survey mailed to you next month. Return the completed survey, and when NAHB publishes the next Cost of Doing Business Study sponsored by Grant Thornton, you'll get your free copy of this unique report. It will allow you to see how you measure up to others in the industry in terms of performance and profitability.

This offer is for NAHB builder members only. [return to top]

Get Free Business Guides on Tech, Planning, Finance

If you missed the Business Management Education sessions at the International Builders' Show in Orlando, you missed our 2007 Builder Business Guides on technology, strategic planning, and finance.

Good news! You can download these three guides in PDF.  Among other topics, the guides discuss:

  • benchmarks for your technology budget and tips for implementing IT solutions successfully
  • step-by-step strategic planning and setting and achieving your business goals
  • understanding your cost of doing business and reading financial indicators

Go online and log in as an NAHB member to download your free Builder Business Guides. [return to top]

Managing in a Cyclical Downturn
By John Burns
Being in a cyclical business is risky. You can't blame investors or mortgage companies because there are always companies willing to take risks during good times. You can't blame land buyers for paying top dollar at the top of the market because every year can be the top of the market in a cyclical industry. The factors influencing the cycle are beyond the control of any one individual or company.

Most companies in cyclical industries make a lot of money during the good times, and lose money during the bad times. Moreover, nobody is to blame for a cyclical downturn.
 
Emerging from the Down Cycle
Companies that are most prepared for a downturn generally emerge as the strongest companies after the downturn. The most prepared companies are:
 
Less Aggressive: These companies made fewer significant capital investments just prior to the downturn than their competitors, or had the mechanisms in place (such as joint ventures or options) to renegotiate or abandon those investments if needed. They bought land, but they did not bet the company with their land purchases.
Flush with Cash: These companies have access to their own cash or cash from multiple sources in multiple industries. Serious risk takers generate more cash during the good years and lose more cash during the lean years.
Efficient: These companies redeployed their cash flows during the good times into improving processes to be the most efficient company during the lean times. Businesses that think long-term generally prosper over the long-term, while those that are more short-term focused have the most difficulty during a down cycle.
Proactive: These companies proactively respond to the downturn by taking action. You can complain, you can pray, or you can do something proactive to make your company better.
 
Companies that do not emerge from a downturn are:
 
In Denial: These companies spend a great deal of time convincing themselves and their partners that the market will improve soon.
Cash-Poor: These companies have little access to cash but spend a lot of time trying to convince those with cash to invest in their companies.
Inefficient: These companies have a lot of process problems that their competitors do not have.
Lazy: These companies take little action.
 
No company is perfect. However, if you find yourself in the latter category above, you had better fix things fast. Read more.
 [return to top]
Housing Economics IBS Handouts Available Free Through February
Where will the economy go in 2007? This seminar focused on the state of the nation's economy and its impact on housing. Nationally known economists discussed the outlook for employment, prices and financing for both the long and short-term. 

The speakers at this Economic Seminar were:

  • David Seiders, NAHB's Chief Economist and Senior Staff Vice President.
  • David Berson, Fannie Mae's Vice President/Chief Economist.
  • Frank Nothaft, Freddie Mac's Chief Economist.  

Please note: This information is usually available only to Executive-Level subscribers to HousingEconomics.com. However, it has been made available free through the end of February to non-subscribers. Click here to download the full presentations now. [return to top]

For more information or to contact us directly, please visit www.NAHB.org l ©2007, National Association of Home Builders

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