Tag Archives: big builder

The 2015 Public Builder Report Cards

In 2014, public builders continued to see their balance sheets improve and sales grow.

While the market may have closed for new public home builders over the past year, 2013′s burst of activity introduced five new companies to the latest BIG BUILDER report card.

In 2014, it was good to be big. While many smaller private builders were struggling to secure both capital and land—the basic elements of growth in the business—the big were getting bigger. Whether they were looking for land or an entry point into new markets, the publics were aggressive.

But public growth wasn’t measured in number of acquisitions. According to stats compiled by American New Homes Group president Jamie Pirrello and his team of Robert Yemola, Kylie Berrena, David DeFreest, and Christine Zoerner—members of the Accounting, Business, and Economics Department at Juniata College in Huntingdon, Pa.—the publics grew in a lot of other metrics in 2014.

For the full list of grades and comments, continue reading via builderonline.com

40% of the top homebuilders on the Builder 200 list trust Constellation as their software partner. We’ll show you why.

Hanley Wood: 2015 Public Builder Report Cards

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Homebuyer Service After the Sale

Attitude and service after the sale is as critical as it is before it.

I am every salesperson’s worst nightmare. Whether buying a new car or a home, I am constantly looking for the next best thing. Before the ink dries on my contract, I begin eyeing the house around the corner or the car next to me at the stoplight. I’m human. And that means I am prone to being suddenly drawn away from the products I thought were the answers to my problems only minutes earlier. I’m not unique in this—humans are switchers by nature. It behooves salespeople to know this reality and take steps to prevent cancellations.

One of my most basic (and powerful) approaches in business is to copy successful people. And there’s nobody with a better reputation for creating loyal relationships with buyers than Joe Girard, deemed the “Greatest Car Salesman” by The Guinness Book of World Records. Girard sold 1,425 cars in 1973 and 13,001 individual retail units over his 15-year career. According to Girard, though, he never sold a car—he sold himself. The most valuable products his customers walked away with were Joe Girard and his “service, service, service.” Girard’s principles worked out well for him, gaining him endless return customers and referrals.

If you want to keep your buyers from straying with your competitors, take a lesson from Girard. Never stop selling.

Girard says, “The sale begins after the sale.”

…keep reading via Big Builder.

Customer relationship management by Constellation:

 

Conasys eBook: The Homeowner Experience

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Homebuilder Moneyball

Take an ‘everything matters’ approach to operations, and ‘small ball’ will get you the wins.

With ballparks opening across the country, Clark Ellis for Big Builder draws similarities between the inflated numbers produced by “The Steroid Era” of baseball and the inflated numbers of the early 2000′s housing market.

“The Steroid Era” from 1996 to 2005 produced year after year of incredible baseball records until regulation came down hard on MLB. History has since proven that these numbers were not a meteoric rise in talent, but the result of an external factor: steroids. Here are a few of those numbers:

Isolated Power (ISO): a measure of batting power, 7 of the top 10 scores occurred in the Steroid Era.
40 Home Run Seasons: 27% of all 40 home run seasons occurred in the six seasons from 1996-2001.
Total Home Runs Per Season: Between 1996 and 2005, the average number of league-wide home runs per season was 5208. The average between 1980 and 2014 is 4262.

After “The Steroid Era” the best teams in baseball, once again, are well-rounded clubs focused on pitching, defence, on-base percentage. Baseball calls this razor-sharp focus on the details “small ball” or in Hollywood, Moneyball.

According to Ellis,

In the housing industry, we essentially had our “Steroid Era” as well in the early 2000’s through 2006 or 2007. Interest rates were extremely low, banks were willing to extend credit to consumers with little to no verification, and home building companies were able to borrow using low rates to purchase land and to finance construction. As we all recall, the numbers associated with the results of housing’s “Steroid Era” were just as exceptional for this industry as the baseball numbers were.

And, similar to baseball, homebuilding had its own inflated numbers:

First-Time New Home Buyers: In 2005, these accounted for 600,000 new units. The days of easy financing for the first-time buyer are gone.
Land: Competition has driven land prices up, making pricing from the early 2000′s no longer possible.
Operations: As prices ballooned faster than costs, inflated margins meant lots of flexibility in the operations department. We’ve heard from Scott Sedam and Ken Pinto that pressure from trades and suppliers is increasing fast.

Like the best baseball teams of the past decade, homebuilders must change their focus from a “long ball” to a “small ball” approach to operations and decisions.

Here is Clark Ellis’ How to Play “Small Ball” Top 10 List:

  1. Drive the market research and land evaluation process with realistic product, pricing and costing assumptions, clear roles, responsibilities and accountability. [Solution: Our land development systems manage every aspect of the planning process with strict rules and automation.]
  2. Know your customer: size of segment, demographics, psychographics, submarkets, price points and product needs.
  3. Deliver clean, flexible, low cost and easily constructible product.
  4. Attack and minimize “Sale to Start” cycle time. [Blog: DSLD's 43-day cycle time]
  5. Scheduling system must provide accurate, real-time visibility to trade partners and suppliers as well as internal staff. [Blog: Scheduling for Higher Profits]
  6. Make Material Management a critical discipline with the dual goals of optimizing margins and eliminating time wasted while waiting for additional material to be shipped to the job. [Blog: Pain Points in the Homebuilder Supply Chain]
  7. Engage Trade Partners in a collaborative fashion and develop incentives that align all interests towards executing efficiently, with high quality and on schedule. [Demo our trade partner portals.]
  8. In the context of #4, aggressively and ruthlessly attack Start to Completion (of construction) cycle time with a collaborative and motivated team of builders, trades and suppliers.
  9. Eliminate Punch Lists.
  10. Commit to the market. Partial effort and incomplete execution wastes time and money and only leaves you further behind your competition.

Ellis’ final “small ball” tip is to reduce opportunism: just because a deal is “too good to pass up” does not mean it aligns with your strategy and goals. Reconsider these decisions, while thinking like the manager of the Oakland A’s.

Request a demonstration of how our solutions can help with these goals.

See also: Homebuilder Shark Tank

Read the full article from Big Builder Magazine.
Clark Ellis is a principal at Continuum Advisory Group.

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Homebuilder Supply Chain Pain Points

Managing the various stages of the homebuilding supply chain is critical in order to maximize profits at each stage. Last week, we heard from Scott Sedam that last year’s trade labor shortages will trickle down into this year’s material shortages. Communicating future purchasing needs from the buyer (that’s you, the builder) down the chain allows each participant to plan effectively and maximize resources. It also ensures you get your lumber when you need it.

BIG BUILDER presents a graphical representation of how a lack of communication can add time and money to the process of purchasing. This targeted look at each step in the chain can serve as your road map to success.

Homebuilder Supply Chain Pain Points:

  1. Raw Materials: suppliers base their work on estimates from the manufacturer.
  2. Manufacturers: with little information, manufacturers are forced to estimate future demand.
  3. Distributors: guessing quantities, sizes, colors, etc.
  4. Dealers: routinely react to one-to-two-day lead times.
  5. Trade Contractors: last-minute changes cause trades to arrive (or not) at the wrong time.
  6. Builders: you are felt to pick up the costs.

We consider Scheduling, Estimating and Purchasing to be a fundamental part of the production process. Because our solutions integrate a single software platform throughout your business, you are able to effectively communicate purchasing intentions through to your trades without additional bells and whistles.

Our systems, like NEWSTAR, FAST, and BuildTopia, include trade partner portals designed to allow builders to communicate effectively down the chain. Request a demo for more information.

Request a demonstration of how our solutions can help with these goals.

Continue reading from BIG BUILDER Magazine.

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2014 Housing Leadership Summit by Hanley Wood and BUILDER Magazine

The Constellation Team is thrilled to announce our sponsorship of the 2014 Housing Leadership Summit presented by Hanley Wood and Builder/Big Builder Magazines. Located at the gorgeous Ritz-Carlton Laguna Nigel in southern California, the nation’s top home builders will gather to discuss strategy and finances for the year ahead. Constellation HomeBuilder Systems is the event’s Digital Sponsor, bringing you wifi, charging stations, and more.

 

2014 Housing Leadership Summit
May 12-14, 2014
The Ritz-Carlton, Laguna Nigel
1 Ritz Carlton Drive
Dana Point, California 92629

MORE INFO

 

Please join us at the Summit and introduce yourself to Chris Graham, Vice President and Dan Miles, Director of Sales. Chris and Dan would be happy to share how homebuilders that partner with Constellation use information to drive business decisions with confidence.

Also, Chris Graham sits down with BUILDER Magazine to discuss Constellation’s commitment to homebuilding software and technology. Read more.

Constellation is your Homebuilding Software Partner

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