Latest Thoughts

1st Quarter 2007

Following are some thoughts to aid your business planning based on current conditions we have seen in the various markets we travel and work throughout the United States.

General Market Conditions

Housing supplies continue to increase in many markets. Be responsible and regulate your starts with historical sales rates and reasonable sales projections. A safe ratio of inventory to sales is about 1 to 3.

Operating Challenges

Continue to improve all aspects or ordering systems and cost control. Make sure that variance (spending above budgeted amounts) is closely tracked and accounted for by an employee that is not managed by field management.

Market Research Challenges

The use of all aspects of market research is important right now. Many investors continue to pour into the housing market with purchases of land and apartments. Make sure you know what is going on around you. Many folks are overbuilding and do not know it as they have not collected available data to see what is going on. Failure to do this could cause slow absorption and price reductions that could impact your bottom-line.

Financing Conditions

Pressure is mounting on investors and bankers to be more restrictive in their lending policies. Work with your banker, keep communications open and have great financial reporting.  Guard your cash position and form a team to monitor and manage this professionally and as well as you can.

Hiring the Right People

This is the time to make sure all positions are filled with the best available people. If you have poor performers you should coach them to higher levels, change their positions to a better fit, or exit them to another industry.

Structure the Company Right

Many clients have restructured and downsized their companies to adjust to decreased demand and significantly reduced starts. Evaluate how the company is running on a quarterly basis. It usually takes about 3 months for a new structure to take hold and firm up, if you have kinks in the structure they will surface with staff complaints that are lasting - readjust and tweak until the organization works right and feels right to most of the staff. (You will not please everyone).

LEAD

Leaders know that have a unique perspective that others do not; you have to make the right choices and execute rapidly, or you might not be here next year. Act, execute, and support your team, but ultimately you as the leader are responsible for the well being of the organization. The hard and disciplined choices rest with the leader and hopefully all of the experiences in your life will help you make the right one.

Authored by Noelle L. Tarabulski

Builder Consulting Group can assist with these and other challenges. We can be reached at 303.215.9100.