Home Builders Top 5 Strategies For Increasing Revenue

Home builders must be extremely vigilant to be successful in today’s highly competitive real estate market, says Ryan Dunn, CEO of Trinity Builders in Vail, Colorado. In Mountain Builders Magazine, Dunn highlighted five common strategies builders are implementing to maximize revenue and profits:

  • Use New technology – Dunn says, “The primary reason that established builders have fared better than many start up builders is their ability to invest in technology. I’m not referring to complex accounting software or 3D renderings but rather very specific new age tools that quickly assess a market for scope of demand, survey prospective buyers for the home features they will pay for, and cut excess labor cost out of a very energy efficient green homes.”
  • Focus on the sales process – ” The most successful companies in home building and home remodeling industries are driven by focusing on the sales process in every aspect.Visibility is the key, so marketing mediums such as direct mail flyer campaigns to marketing your website can really accelerate the sales process and make a big impact on your bottom line.Furthermore,signage and banners on display in your communities can help steer traffic to your development.Also,holding open houses with model properties and building strong relationships with your local real estate brokers can pay huge dividends when it comes to marketing and ultimately selling your properties.”
  • Manage the balance sheet – “A large number of the investors we have worked for over the last ten years have been shocked by the lack of financial sophistication in the home construction industry in comparison to other industries. It’s true that many builders took on as much debt as possible, from relatively few sources, and with total disregard to covenants.It doesn’t take much for a project to go upside down when the books are sloppy.It’s extremely important to keep all records in order and to have a qualified accountant overseeing every aspect of your companies finances.”
  •  Stay focused on the details-“Most builders fail to do their proper due diligence at the very beginning phase of their projects.Selecting the highest and best possible valued lots at the lowest price is the most crucial detail that is often overlooked.Much of your gross profit in the end can usually be attributed to the land value as it relates to comps in the area.Once lot moves into construction phase every small detail has to be closely monitored by the builder to ensure quality control.Nothing will ruin your profit margins more than having to work backwards correcting mistakes that delay your project and drive up labor and material costs.”

  • Follow up with your customers- “The most fatal mistake a home builder can make is to not follow up with their customers after they have taken possession of their new home.Home buyers often have may questions and need assurance that they have the backing of the builder.Good referrals and positive reviews has never been more critical for building a solid brand that people trust especially with the power of social media.This industry has always been a marathon and not a race when it comes to profitability so a solid follow up strategy can be the difference between ultimate success and failure.”

 

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