July 2015             Volume X, Issue 7

New Product Feasibility

By Ed Hauck, Builder Partnerships

Here at Builder Partnerships, we've been seeing builders really start to ramp up new products to meet the increasing demand for homes. It's great to see after such a long, tough stretch. But with the development of new product comes some thorny issues about pricing and value. Too often builders are investing in their models, but the investment is not in a way that gets a return from the buyers. The homes they put on the market are underperforming in two areas. The inappropriate investment is increasing costs on one side, and not meeting consumer needs on the other. In short, costs are going up on new products, but price is declining or holding steady. That's a recipe for declining sales and decreased profitability.


 Helping builders identify where to save money and where to invest is a large part of my efforts here at Builder Partnerships. A key element of that analysis is a new product feasibility exercise that I walk my builder clients through.


 How It Works


 I ask a builder to take his best performing, most consistent plan. By that I mean I want a top seller that is a leader in the company's profit producing homes. Cost and sales value are at an optimum. 

 

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Back to the Drawing Board: How Design Can Help You Handle Cost and Pricing Pressures

By Steve Moore, BSB Design

Photo of Moore

For many builders, competing in the recovering market of 2011-2013 meant learning how to one-up the competition. The design response was to include more design features than those found in existing homes in the market. Competition among builders led to an escalation of design elements-fancier stairs, more complicated roof structures and added special floor plan bump-outs-more of everything. Consumers wanted more for their money, and builders were kind enough to oblige, because there was enough market pressure and lack of supply to allow that to happen. But current market conditions have changed, and builders are being forced to respond.

 

Housing prices are expected to rise, but less than the past few years. The cost of construction has increased, including materials, land and labor, putting pressure on the bottom line. Housing affordability has decreased dramatically, and our buyers are resisting the price increases by staying on the sidelines, waiting for lower prices or even greater values. How should builders respond?

 

From a design perspective, focusing on plan efficiencies is important again. It is time to retool your designs for the construction efficiencies that we were lured into leaving behind when the market loosened up. We had our fun, but it is time to go back to our disciplined diet.

 

 

Read More...


 

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GuildQuality Joins Builder Partnerships

 

Builder Partnerships is pleased to announce the addition of GuildQuality into the Builder Partnerships program.

 

Founded by Geoff Graham in 2003, GuildQuality became the first web-based customer satisfaction surveying solution for small to mid-sized homebuilders.

 

Our focus on innovation has kept us relevant and increased the value we bring to our customers. Since our start, GuildQuality has grown and evolved into a multi-faceted service, offering a suite of surveying, performance reporting and marketing features for the residential construction industry. We value the role we've played in helping to shape the way remodelers, homebuilders, developers, and home services contractors measure and promote their delivery of customer service. Visit our website for more information.

 

As always, Builder Partnerships encourages its members to take advantage of the opportunities available through the program to learn more about our participating companies. Members are encouraged to contact each of these organizations directly should assistance be needed.

 

 

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Product News

 

 

Innovative Hearth Products Brand-Leadership Team Answers Top Builder Questions About New Government Standards and the Company's Fireplace and Hearth Products

 

By Innovative Hearth Products

Q. Do IHP products meet the new governmental standards?


A. The first new standard is the barrier standard. Effective January, 1, 2015, all glass front gas fireplaces started requiring a barrier where the temperature of the viewing glass exceeds 172°F. Barriers must pass stringent performance tests and be part of the unit's safety agency listing. IHP products not only meet the requirements, but we have also accomplished this with some of the most cosmetically appealing alternatives.

 

The second standard that just went into effect, May 15, 2015, is per the EPA for the reduction of particulate emissions in wood and pellet fueled fireplaces, stoves and inserts. New limits were prescribed in two steps, with the first 4.5g/hr step effective May 15, 2015, and the second 2.0g/hr step going into effect 5 years later.


The majority of the IHP product offering previously met this standard even before it was in place, and currently we are completing a few slight improvements on a few products, to ensure all IHP products fully meet the new requirements.


 Q. What type of products are available from IHP?


 A. Because we have recently rebranded and combined the total product offering of two former companies, IHP now has the most expansive product offering of any hearth product manufacturer. We offer wood burning fireplaces of various sizes and for various applications including both inside and outdoor use.  

 

 

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Builder Partnerships Announcement: Nickles Named Controller

 

Builder Partnerships announced today the addition of Terry Nickles to its leadership team as Controller. In this role, Nickles will be responsible for the financial matters of the firm, overseeing the accounting function.


 Nickles has more than 20 years of financial services experience in the brokerage and investment banking industry. Previously, he served the Chief Financial Officer at Wedge Partners Corporation. In that capacity, he was responsible for the financial matters of the firm, operations and accounting. Previous roles also include Chief Financial Officer at Geronimo Financial Inc. and Vice President/Controller at Capmark Capital Markets.

 

Additionally, Nickles has numerous years of experience in the financial and operations areas of other broker dealers and was a Management/Inter-Territory Accountant at PriceWaterhouseCoopers in Moscow, Russia. He holds inactive series 27 & 63 FINRA registrations. Nickles received his B.A. in Business Administration from Western State College of Colorado with an emphasis in Small Business.

 

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Fall Seminar Series

 

Builder Partnerships is excited to offers its fall seminar series, offering educational opportunities in Denver in Chicago. Since 1954, we have been on the cutting edge of management thought, promoting excellence in management practices through our educational programs. First, under the leadership of Lee Evans then during the last twenty plus years under Chuck Shinn, our group has earned the reputation of being the premier organization for management education.


 The programs listed below focus on enhancing management techniques to increase profitability, assist with controlled growth in challenging market conditions, and establish construction and operational controls.

 

These programs are designed to help you:

  • Satisfy customers by building the house right the first time, and then providing superior customer service
  • Manage capital and financial operations to achieve high profitability
  • Build strong and integrated systems to help make the management job easier and less stressful
  • Train and educate personnel to work as a team and produce superior results 

 

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July Partner Notes


 



 

 

HHHunt Breaks Ground on First Homes for Hope House in Virginia

 

 

 


 Builder Magazine Identifies Four Home Builders Who Achieve Excellence

 

 

 

 

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In This Issue
New Product Feasibility
Control Cost Pressure through Design
GuildQuality Joins Builder Partnerships
IHP Answers Questions
Terry Nickles Joins Builder Partnerships
July Partner Notes
Upcoming Events

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Live Events
 
Production Management

Sept. 14-16, 2015
Denver 

Improve the quality of your homes while cutting costs, increasing efficiency and adding value to the bottom line. The Production Management seminar is an intensive seminar loaded with valuable insights on management techniques specific to production management for home building companies.

For more information, click here.

Purchasing, Estimating and Job Costing


 

Sept. 23-25, 2015 

Chicago


Purchasing, Estimating and Job Costing is a comprehensive seminar designed to improve profitability through a more accurate and effective estimating and purchasing department. Good estimating and purchasing is critical to obtaining superior profitability, and can increase your bottom line by as much as 5%. Our goal is to provide a wide range of tools that attendees can use to realize results immediately upon return to their companies.

  

For more information, click here.

The Superintendent's Job: Front Line Manager

Oct. 15-17, 2015
Chicago

The Superintendent's Job: Front Line Manager is designed as an interactive experience to help your team improve job site management techniques. It will provide the necessary tools to increase overall profitability and customer satisfaction through a strong focus on building the house right the first time: on quality, on budget, and on time.

For more information, click here.

Managing for Profit

Nov. 4-6, 2015
Chicago

Managing for Profit is an intensive seminar designed to put you on track to improved profitability. Loaded with valuable insight on management techniques specific to home building companies, this seminar will provide tools you can use to realize improved results across the entire organization. Systems, procedures and forms will be demonstrated so you can begin using concepts learned immediately upon return to your company.

For more information, click here.

Webinars


Aug. 7, 2015
11:30am ET

Don't let your costs eat your profits! You can account for increased materials costs, decreased home prices and STILL make money. 

In this webinar, Chuck Shinn presents the Profit Equation and Ed Hauck joins him to discuss proven ways to decrease construction costs, build homes that sell at current market prices AND add points to your bottom line.   


 

For more information, click here.

 


Price Homes to Market and Protect Your Profits

Sept. 11, 2015
11:30am ET

Charles C. Shinn, Jr., PhD presents market pricing methodology to help you determine the targeted price to set for your homes to make them competitive in your local market. From there, Chuck will work backwards to demonstrate how you can establish an acceptable, reasonable construction budget that would allow you to build a desirable home at a reasonable price AND still make good profit.

 

For more information, click here.

 

Are You Stable? Presented by Hubbell | Chance

Sept. 16, 2015
11:30am ET

In this webinar, David Bruce discusses helical piles and the peace of mind/advantages provided.

 

For more information, click here.

For the Complete list of events, click here
Builder Partnerships

 

Builder Partnerships is a member organization focused on providing management training and support to help builders improve their performance and profit. Currently we represents approximately 550 builders in the United States and Canada who have projected about 75,000 homes built collectively this year. With over 75 manufacturer and service providers associated with our group, Builder Partnerships also manages highly competitive rebate and incentive programs and works to strengthen relationships between builders, manufacturers and other service providers in the home building industry. 

 

For more information, visit www.builderpartnerships.com
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