ORDER PROCESSING NEEDS IMPROVEMENT

For as long as I've been in this business, both as a builder and as a Sales Rep for systems manufacturers, I've been exposed to many different types of home ordering processes.  And they all end up being houses, which just truly amazes me.

Here is a recap of some of them and how I graded them:

(A-) This grade was earned by a panelized manufacturer that supplied just about everything for the new home builder.  They used a price database and you simply checked off what you wanted for every component.  Then you printed it out and faxed it to them for review.  Custom homes were discouraged but they offered more than 300 standard homes.  Turnaround time was about 3 -4 weeks.

(A-) A modular company earned this A-.  They used a simple Excel spreadsheet with the base prices of their homes and over 800 options divided into the different home systems.  It was very easy to use.  Custom homes were costed within ONE DAY and then you simply plugged that amount into the spreadsheet and used the options as you normally would.  Very well built homes!

(B) This was another modular company.  They had a very limited number of floorplans and options.  However, just about everything that a builder would want to upgrade was already included in the base price.  Andersen windows, all the appliances(GE Proline), Lasco tubs and showers and Kohler toilets and faucets.  They even had the mid range Merrilat cabinets as standard in cherry, oak or maple.  If they had been open to custom homes, they would have earned the top spot with an A+.

(C+) This modular company supplied a price book but no builder enabled entry system.  The Sales Reps were expected to complete the quotes and the builders were not involved with the meat of the process until the first quote was completed.  Slow getting custom pricing to builders, but the home they built was very good.

(D+) This manufacturer uses a very, very complicated system with tons of options and items that need to be cross-referenced to other items.  They give the builders a copy of the program to use to do their own orders.  However this convoluted system is so bad that the builders refuse to use it and put the burden entirely back on the Sales Reps.  You almost have to be a brain surgeon to order through this system. Nice houses when you actually get them however.

(D-) Here is the worst.  This modular company has a printed price book and no builder entry system.  Most of the options in the book are two or more years old and if changes were made, such as changing to another appliance brand, you had to call your Sales Rep for the new price.  Sales Reps were keeping their own price books and exchanging prices among themselves.  If you wanted a custom house quoted, you might get the right price from the estimator and maybe you wouldn't.  It didn't seem to matter to the company.  This company had one of the longest lead times and that's not because they were so busy.  It was because the builders really fought to get their houses costed.  On the plus side.  They build a great house.

Thank goodness I haven't had an experience worth an (F) .  Every one of these factories turns out a good home.  Some are just better to order from then others.

System Manufacturers are not created equal.  Some look at the process of building from the builder's viewpoint and others just complicate the HELL out of things. 

BUSINESS PLAN MISTAKES

Every home builder should have a written business plan. This plan is not only the road map for your company to follow but it also serves as one of the main instruments that lenders want to see when you need additional capital for expansion and development.

The problem is that even though you might be successful in your building business, it is hard to make the people holding the money feel good about lending it to you, especially in today’s tight money market.

I will assume (yeah, I know what that means) that you have already written your business plan and are getting ready to implement it. I will also assume that before too long you will probably need to attach it to the loan application. There are many things that can turn your business plan from good to bad and possibly keep you from getting the loan. Here are some of them:

1. The plan is poorly written. Spelling, punctuation, grammar and style are all important when it comes to getting your business plan down on paper. I’m sure that your 10^th grade English teacher won’t be grading it, but you’ve got to keep all the grammar and spelling correct. It’s sort of like pornography, it can’t describe it but I know it when I see it. If reading your business plan is hard for a third party to read and follow, you’ve got a problem.
2. The plan presentation is sloppy. Once your writing's perfect, the presentation has to match. If you had intended to put charts or graphs in the business plan, they better be there. Index it and use chapters and topic headers. Have someone proof it before you give it out to anyone.
3. The plan is incomplete. Every business has customers, products and services, operations, marketing and sales, a management team, and competitors. At an absolute minimum, your plan must cover all these areas. Your plan should include detailed financial projections--monthly cash flow and income statements, as well as annual balance sheets--going out at least three years.
4. The plan is too vague. A business plan is not a novel, a poem or a cryptogram. If a reasonably intelligent person with a high school education can't understand your plan, then you need to rewrite it. Don’t fill it with industry jargon.

One way to check you business plan for these and other mistakes to is give it to a third party to review.  A banker friend or your accountant would be good first choices.  If they can't follow your business' road map to success, how will the people that really need to?

NEW HOME SALES DROP TO LOWEST LEVEL IN ALMOST 17 YEARS

OK, there's nothing you can do about this news but accept it and move on.  Most of these home starts happened to the nation's biggest home builders.  Small independent builders are still holding their own for now by concentrating on niche marketing.

The Commerce Department reported today that sales of new homes dropped by 8.5 percent last month to a seasonally adjusted annual rate of 526,000 units, the slowest sales pace since October 1991.

The median price of a home sold in March dropped by 13.3 percent compared with March 2007, the biggest year-over-year price decline since a 14.6 percent plunge in July 1970.

IT'S GREEN BECAUSE I SAY IT'S GREEN!

This year's Earth Day focused on GREEN this and GREEN that.  That seems to be the real hot button for everyone concerned about saving the planet.

But here is a side you may not have thought about when it comes to your advertising.  If you promote GREEN in your ads and literature, how do you answer the questions the prospects ask about it.  It really can catch you off guard if they ask "What makes your homes GREEN?"

I'm sure a couple of you have answers for the questions and some of you can rifle off a couple of key points your factory rep told you about how the factory was building to GREEN specs, but most of you really don't have a good answer to the question.  Confusion over what truly constitutes "green" is no doubt a factor.

Your prospects are getting educated about GREEN on a daily  basis from news reports, HGTV, blogs and even Oprah!  Don't try to say you're GREEN if you're not prepared to say why you're GREEN.  This is not a one-size-fits-all kind of thing and it's not a fad. 

Call your factory rep and ask what they are doing to comply with  GREEN housing.  Then take a look at what you can do to make your part of the building process GREEN including the foundation, types of materials and renewable products.

Being GREEN isn't just a Kermit the Frog thing anymore!

I WISH IT WERE 1965 AGAIN

I've been watching food and gas prices rising almost daily and wondered what the price of these were back in 1965 (my younger days). 

Gas was 39 cents a gallon and the tank on my new Barracuda cost me $6.25 to fill.  I bought one of those "new" 8 track players for it for $29 and took my girlfriend out to the best restaurant in town where it cost me $11 for for two surf and turf dinners and drinks.  I miss that girl!  And cigarettes were 31 cents a pack including the tax!

	1965	2008
One pound of sliced bacon	$0.29	$3.29
Bananas per pound	$0.10	$0.69
Banquet TV dinners	$0.39	$1.25
Campbell Condensed soup	$0.15	$1.25
Large Eggs per dozen	$0.55	$2.59
McDonald's regular hamburger	$0.20	$0.99
Gerber baby food jar	$0.08	$0.59
Pack of Chewing Gum	$0.05	$0.99
Porterhouse Steak per pound	$1.19	$11.99
Sirloin Steak per pound	$0.89	$8.99
Pork Spare Ribs per pound	$0.49	$3.99
Watermelon per pound	$0.02	$0.49

 

TRAVESE BAY LOG HOMES OFFER UNIQUE PRODUCTS

I just discovered Travese Bay Log Homes in Travese Bay, Michigan and found that the exterior walls they produce for their homes are some of the most interesting and thermal efficient in the country.

I'm sure some of you are very familiar with Travese Bay and are wondering why I haven't heard of them before.  I guess I just don't get out much!

What makes them so unique is HOW they design their walls. These advanced wall systems features 2x6 sidewalls generating an efficiency rating of R-29 which features hand peeled, solid White Cedar timber.

Here are pictures of two of their walls, they have others.

 

Visit them at http://www.traversebayloghomes.com

NEW MODULAR FACTORY COMING TO EAST FELICIANA PARISH IN LOUISIANA

With the county seat of East Feliciana Parish, Clinton, only having a population of 2,000, it has managed to attract two major productions to the area.

First was the 2005 film, The Dukes of Hazzard that was filmed here and in the surrounding area.

Now comes news that a manufacturer of modular homes has chosen East Feliciana Parish as the site for a $3 million manufacturing facility that the company's president said will help fill the state's "massive affordable housing need."

Superior Homes of Louisiana, a subsidiary of Watertown, S.D.-based Superior Homes with over 45 years of experience, plans to hire up to 150 people.

The new 71,000-square-foot facility in Clinton will build modular homes, schools, restaurants, dorms, cafeterias and other light commercial buildings. Construction of the new homes and buildings is scheduled to begin Oct. 1.

Good news for Louisiana and our industry!

LUMBER SALES TO MODULAR COMPANIES BETTER THAN TO STICK BUILDERS

An ugly housing market, depressed lumber prices and weak consumer spending meant continued troubles for Universal Forest Products Inc. during its traditionally slow first quarter.

Lumber prices were near 17-year lows during the quarter.

Sales to manufactured housing makers were down 14 percent to $76.3 million as modular home sales continue to slump with the rest of the housing market.

Site-built construction sales, which have been slumping over the past year, were down 21 percent to $108.9 million. It reflects a 39 percent decline in single-family housing starts. Universal makes trusses and joists and other products for home builders.

Just one more reason to go modular.

ARE YOU REALLY LISTENING?

You've got a website with a "contact us for more information" link, business cards with your phone number, ads in newspapers and on the radio and still you don't follow up on the people that try to contact you.

ARE YOU REALLY LISTENING?

Oh, you might take their name and such and you might have the best intention to follow up with them but "you are so easily called away".

While you are talking with them or reading their email, you say to yourself that "I've got to get them the information they want".  Maybe you do send out a packet or brochure.  Maybe you don't.  I don't care.  What you do next is the important part.  Keep in touch with them!

Use the Tickler File that I talked about in an earlier article or a PDA or Goldmine software or just about anything that works for you, but keep in touch.  Some of you might give the name to an assistant to put into a file, but somehow that name never seems to surface again.  It's not their job to keep up with prospects, it's yours ! 

Successful builders use follow up to keep the supply chain full and make sales.

MISSED OPPORTUNITIES FOR PROFIT

I recently thought about the homes I've built and the ones I've lived in over the years and asked myself if there were any opportunities to make some extra profit. It didn't take long before I came up a list of things that I think just about everyone that owns a house wants to add after they move in.

Why not give them these things before they move in a make some profit for your company.

Here is my Top 10 List of Missed Opportunities:

1. Add a work bench in the Garage with storage
2. A folding area in the Laundry Room
3. Bookcases (can be supplied with the home by the factory)
4. A full volute starting tread on the stairs (again from the factory)
5. A pantry in the Kitchen area
6. Storm/Screen doors on the front and rear
7. Decks, patios and outdoor seating areas
8. Custom Sidewalks
9. Trey ceilings in Living, Dining and Master Bedroom
10. Recessed lighting....everywhere

There are literally hundreds of these items and the best way to remember them is to WRITE THEM DOWN and refer to them when you are in the contracting stage. That way they will be paid for by the construction mortgage.

Let me know some of your "add ons"

OXFORD HOMES IDLES 93 - MAY CLOSE FACTORY

Eco Building Systems, formerly known as Oxford Homes, is set to temporarily lay off 93 employees, a company official said Wednesday.

Eco Building Systems, located in Oxford, Maine has had tough times for a while now and this could be the last straw for the company.

"Contrary to the rumors, we have not closed," said Richard Bottoms, accounting manager at the Route 26 plant. "We did announce a layoff on Monday of all personnel. We did not give a call-back date at this time." That SURE sounds like a plant closing to ME.

The move comes less than two months after another manufactured home builder in Oxford - Burlington Homes on Route 26 - went under, idling 70 workers.

At the time of the transition from Oxford Homes to Eco Building Systems, the company owed more than $318,000 in unsecured loans to nine creditors from across New England. They now owe over $1.4 million.

MADISONVILLE, LA TO ALLOW MODULAR HOMES

By Chad Ruiz
St. Tammany News

The Madisonville Town Council passed an ordinance that allows the construction of modular homes inside town limits.
With a unanimous vote from the three council members present, an amendment to ordinance 98 was approved, ultimately allowing the construction of the prefabricated homes, but with regulations.
The ordinance was first introduced last month as a law that would allow the popular homes, but because of convoluted wording that some residents argued was not an accurate description of a modular home, an amendment was developed to the ordinance.

It clearly defines a modular home as a structure transportable in one or more sections, which is designed for use only with a permanent foundation and which uses standard framing, sheathing, roofing, siding and electrical, plumbing and heating systems, all of which comply with the Town’s adopted building codes. Proof of code compliance of sections delivered to the building-site must be furnished by the manufacturer, and the structure must pass all inspections by town officials prior to issuance of a certificate of occupancy.
Because of concerns about possible infrastructure damage from residents and town officials, a series of regulations were also added to accompany the permit application that include the applicant provide a mapped plan-route of the delivery of the home, height and width dimensions of the transport and cargo, police detail and a cash bond in an amount approved by the town clerk that will serve as a security deposit.
Modular homes have become a popular backdoor option for many residents seeking a quick and affordable route of home construction after Katrina. The homes are prefabricated at a manufacturing facility, then shipped to a buyer’s house on a truck. The trucks and homes typically fall within the weight limits of local roads, but the cranes used to lift and position the homes can far exceed the restricted weight limits by thousands of pounds.
This ordinance was introduced because of the recent construction of the only modular home in Madisonville.

update - SMALL TOWN MAY BANMODULAR HOMES

Folsom puts temporary ban on modular homes

by Benjamin Alexander-Bloch / The Times-Picayune

Tuesday April 15, 2008, 4:38 PM

Folsom's Board of Aldermen has adopted a moratorium on modular homes.

The mayor and aldermen said the village could revisit the moratorium during its comprehensive planning process later in the year.

The ordinance banning modular homes is only in effect until the comprehensive plan is adopted, or 12 months, whichever comes first.

A public hearing on the proposed commercial construction moratorium is scheduled for the board's May 12 meeting. The aldermen would vote on that ordinance after the public comment. Commercial development includes subdivisions, shopping centers and other nonresidential uses.

ALL AMERICAN HOMES IN THE GREEN SPOTLIGHT

During its 75th Anniversary year, the Museum of Science and Industry will be building a functioning, three-story modular and sustainable “green” home in its own backyard to show case the ways, big and small, that people can make eco-friendly living a part of their lives—and to highlight unique home technologies for the 21st century.

The home, conceived by Michelle Kaufmann Designs and built by All American Homes, will form the exhibit Smart Home: Green + Wired, Powered by ComEd and Warmed by Peoples Gas, which will run from May 8 through January 4, 2009.

Visit MKDesigns at http://blog.michellekaufmann.com/?cat=23 for more details and videos of this house.

SELF HELP MARKETING FOR BUILDERS

Most of us do not have a professional staff to help us with marketing our homes.  We rely on our manufacturer to help with everything from literature to promotional items. 

In years past, systems manufacturers might give a new builder/dealer a box of brochures and catalogues with the curt message that it was time to sink or swim.

But today’s manufacturers recognize that their success is predicated upon the sales and marketing programs they offer their builder/dealers.  Many of the them have become real working partners in your success.

As good as this sounds, very few manufacturers hold marketing focus group meetings to listen to their builders.  Fewer even invite builders to help create new home designs.  Yearly and even quarterly builder meetings have become a rarity among factories.

Here is a list of things your manufacturer should be furnishing  to help you increase your exposure:

* Sales literature, brochures, warranty information

* Sales contracts & checklists

* Promotional videos

* Co-op advertising programs

* Analysis of your market, what’s selling!!

* Model home discount programs

* Model home merchandising advice

* Advertising slicks for print media

* Commercials for radio or TV

* Catalogues of home designs

* Help creating new home designs

* Professional photography of finished homes

* Product samples for clients to choose from

* Home show booths to display your product

THE POWER OF WOMEN

A recent "on-line" survey found that:

• 36.2 million women write and read blogs every week
• Approximately half consider blogs a “highly reliable” or “very reliable” source of information and advice about everything from products to presidential candidates.
• 24 percent of women surveyed say they now watch less television because they are blogging instead.
• 55% would give up alcohol
• 50% would give up their PDAs
• 42% would give up their i-Pod
• 43% would give up reading the newspaper or magazines
• BUT, some things are sacred … only 20% would give up chocolate!

And don't forget the that National Association of Realtors found that 70% of women look for their next home on the Internet!

CHIEF ARCHITECT VS 3D HOME ARCHITECT

First, I am a big fan of Chief Architect (except the latest version). Will wait for the next one, maybe it will be better.

A lot of you that can't justify the expense of Chief Architect turned to 3D Home Architect published by Broderbund. The original 3D was an older version of Chief Architect that were sold under the 3D brand.

I heard that Chief and Broderbund had a parting of the ways and Broderbund continues to market and upgrade a version of 3D. However the new versions are not compatible to Chief's 3D software.

Chief in the meantime teamed up with Better Homes and Gardens and started to produce some great software that is only about 2 versions behind the current Chief Architect one. The latest version is 7.0.

The Basic 7.0 sells for about $50 and you can get a version of it on steroids for about $495 that you would swear is Chief Architect.

If you need a very good and inexpensive CAD program for your business, you would be wise to look to any of the Better Homes and Gardens' "Home Designer" software from the basic to the deluxe.

This is an example of an addition that was shown to a customer for their approval using Better Homes and Garden's Home Designer.

Even When Demand Falls, By-product Prices Go Up

Even when demand weakens for a commodity in this “upside down” world, that can still mean higher prices. For example, due to the collapse of the U.S. housing market, lumber production at sawmills is way down. As a result, there has been weakness in lumber prices for several years.

However, sawmill operations generate more than just lumber.

As by-products, most of the waste material finds a use. For example, bark is used in landscaping; sawdust is used in particle board and bedding for poultry; and wood chips provide biomass for power plants. Less lumber means less sawdust. Because production is down, the price of sawdust has doubled from a year ago. It’s hard to catch a break on costs and prices in these “topsy turvy” times.

"Reed Construction Data April 15, 2008"

150 MILLION AND COUNTING

The number of people in the US visiting blogs has jumped from 50 million in 2005 to more than 150 million by March of 2008 (comSCORE). This is about 75% of all Internet users in the US. About 50% visited political and/or news sites.

The people reading blogs tend to be wealthier and connecting by high speed to the Internet. Blogs have quickly become a norm for businesses that want to highlight their successful company and products to prospective customers.

A business blog is an informal way of regularly communicating with your customers and offers a more approachable, informal information-providing approach in which they get to know your company and learn about your products, achievements, and innovations.

A business blog can provide a “voice" for your company that educates and informs your website visitors.

There is one major downside to blogging. Just like your website, it has to be updated. Blogs should be updated several times a week to keep it fresh. Some business owners give the job of blogging to a secretary, who probably doesn’t know the nuts and bolts of your business. The owner rarely checks the blog for accuracy and relevance. This will hurt your website and ultimately lead to fewer returning visitors.

You will get good response to a properly prepared company blog when linked from your website. Most businesses need two blogs and possibly three! One should be open to everybody that informs them about what is currently happening in your business. One should be a private blog just for your customers and the last one should be for your employees. Keeping everybody "in the loop" about your business means less rumors!

Modular Home Builder can design and maintain blogs for your business.

Simply email: modularcoach@yahoo.com

WINNING A FAIR FIGHT IS TOUGH

You Mom taught you to always "play nice", "share your toys" and "respect the other kids".  You Dad always said to "Fight Fair" and "Do the right thing".

When it comes to fighting fair, why is it that you lose so often when you do?  The reason is simple!

The other guy isn't!

If a prospect were to visit you and two of your competitors and actually told you who they were looking at; one of two reactions would hit your brain.

One would be DAMN!, I'm not going to win this one and the second would be that you have a "fair" shot at getting the house.  Both answers are WRONG.

I had a competitor when I was building that advertised that he would beat any other builder's price by 5%.  Guess what, he became one of the biggest builders in our region.  Does he continue to offer a 5% discount?  Sure.

He figured that the profit he made on every home could be shaved by up to 5% and good planning and procedures could shave a couple more  points off any competitor's price.  The result was that he became known not only for less expensive homes, but also for solidly built ones and people stopped asking him to beat the other's price.  They simply went to him first!

Did he fight fair?  In his opinion he did and that's all that matters.

You must not give up an inch to another builder. 

Here's a couple of suggestions.  Follow up with your prospect as quick as you can with a preliminary quote.  Keep in contact with them while they are gathering pricing from the other guys and offer to help them compare the quotes.

I told you in an earlier article about the fellow that puts his ad on the front cover of our local newspaper with a sticky note.  I just got my paper and his ad is there again.  I called and found out that he is filling his pipeline again.  He only has 2 more houses to start.  Wouldn't some of you like to only have 2 houses to start?  Is he playing  "fair"?  Sure is.

Now is the time to stand up, stretch your muscles and put on the gloves for your first round of not "fighting fair".

CHECK YOUR EMAIL FOR HOUSING STARTS

This may sound a little strange, but you just might find a housing start in your email "CONTACTS" list.

If you're like me, you have accumulated a lot of names over the years in your email accounts.  I have six accounts and I don't even consider that a lot today. 

I tried an experiment the other week and it might be something for you to try if you're still sitting at your desk wondering how to get some leads and people to talk to about building houses.

I went through my contacts and asked myself when was the last time I contacted them?  It turned out that out of 776 email addresses, I hadn't emailed more than 500 of them for quite some time.  In fact, even though I had names attached to most addresses, I couldn't for the life of me remember why they were on my list.

So I sent EACH of the 511 a personal email asking what they were doing and if anything was new in their lives.  I told them what I was currently doing in the System Built Industry.

I received more emails in one day than I ever had before. 

The emails were everything from "nothing new here" to " nice to hear from you again" and I still don't remember who a lot of them are.  I also got 44 emails returned that were no longer valid.  Those I deleted. 

I then wrote back and asked "by the way, do you know anyone that might be interested in what I'm currently doing?"  The response surprised me.

I got 72 names of people that my contacts told me might be interested in my services.....and gave me their email addresses which I promptly added to my contacts! Net gain..28!  I wrote them back and asked if I could use them as a referral and everyone said YES.  The process of writing to each of them has begun.

"What's in your email Contact List?

SIGN OF THE TIMES

SEEING IS BELIEVING

I told a woman that I met at brunch today that I am in the System Built housing industry. After I explained to her what that meant, she said they would never own a "pre-fab" house.

It was almost as if she had stepped in something and the smell was obnoxious! I was just about to start my usual defense of modular when I saw a picture of a beautiful 2 story colonial on the wall of the restaurant. I had no idea why it was there, but I pointed at it and said "There's a 'pre-fab'!"

I couldn't tell you if it was a system built home or stick built but since it was a common modular style, I took the liberty of including as one of our industry's own.

She looked at it and said that it was very nice and that her best friend was going to build on a lot she owned in the fall. Could she tell me who her friend could talk to about getting a price. I gave her the names of 3 modular builders in the area that I am sure could duplicate that home. She smiled and thanked me.

Will she tell her friend and will the friend actually call one of the builders? Who knows, but at least she understands that system built is not something that needs scraped of your shoe.

Can you guess which one of these is the modular and which is stick built?

The one on the left is from Signature Custom Homes in Moosic, PA

ARCHITECTS ARE LOOKING FOR WORK

With the recession comes a slowdown in construction and new home starts.  Residential Architects are finding out that their usual business of designing custom homes is dying.

Many of them are cutting back on staff and many are doing work that they would have turned down in the past.  Some of the my local Architects have "stooped" to designing room additions and garages.  One of them is offering to design decks.  Others are doing discounted commercial work and bumping into the Architects that normally do that work.

As I've pointed out in past articles, you've got to do whatever it takes to keep going,  just like the Architects are doing.

Sometimes we think that builders are the epicenter of the housing market, but if the truth be told, we're all in this together.

LESSONS AT A YARD SALE

It's Saturday morning and my wife is dragging me off to more yard sales.

Over the years we bought furniture, clothing, computer equipment, toys for my grandson and antiques. There's always a bargain and haggling is just something I like to do.

Today I saw something that put a smile on my face and made me say "YES!, that's how it's done". I've been telling you for years that you've got to eat, drink and sleep building new homes.

We went to a Neighborhood Yard Sale and a woman got out of her car just ahead of us, looked through the clothing and stuff at the first house and then went up to woman having the sale.

The woman said, "My, you've got a beautiful home and your children are adorable. Have you ever thought of having a family portrait done here at your home?" I had no idea where this was going until a minute later when she told the woman that she was a portrait photographer and would very much like to take their picture at their home.

I listened to her for about a minute and then she waited for the woman to say yes or no to the idea. The photographer said nothing until the woman answered yes. A business card was quickly handed over and she said she would call the woman this afternoon when the yard sale was over. She was very comfortable doing this, so I can only think that she's been doing this for quite a while.

This was quite an approach. We happened to see her at another house about 15 minutes later and guess what? She was doing her sales pitch again.

She must be very good at getting business. She was driving a brand new Volvo station wagon.

This is what you have to do to make sales. If prospects haven't been coming to see you or calling your office. Get off your butt and get out of the office and go where the prospects are.

RUNNING AT THE FRONT OF THE PACK

When you started your business, you probably didn't have much of a business plan or any short or long range goals. Now that you've been in the business awhile, it's time to look at some of the things that might help you not only stay in business but be a lead dog.

I've talked before about business plans and goal setting but this time I want to discuss some ways to make you and your business great. It doesn't matter if you only build 3-4 homes a year, 10 homes or 100 homes, these ideas can be useful to help you be the leader. Your competitors should always be playing catch-up.

1. Find what makes your business unique. Make sure your prospects, customers and especially your employees know what that is. What do you do that the others can't or won't do for the customer. Shout it from the rooftops.

2. Constantly tell people what you do. "I build new homes". This is what you do to feed your family and put a roof over their head. Shout it from the rooftops.

3. Write a business plan. I talked about the importance of this in earlier articles. I really can't say this enough. With the economy in the crapper, you've got to have a roadmap to find your destination.

4. Build a good foundation. You have to manage your cash flow and work within a low budget. While the country is in the shape it's in, you've got to have a good money foundation. Check on your cash position every day if necessary. Builders with cash in the bank will rule the market when this turns around.

5. Promote your homes through good marketing. Work with a manufacturer that builds to the quality your customers expect. Use their materials, DVDs, Home Show booth and anything else they can give you. All of the better manufacturers offer an advertising co-op.

6. Hold people accountable. Make sure that everyone that work for you, either as an employee or a subcontractor, is doing their job properly the first time and on time. There has been an upswing in the number of company bookkeepers stealing money from the business. One in my area lost over $400,000.

THE GROWING PROBLEM OF MOLD

I'm sure most of you have had to clean mold from one of your new homes. In almost all cases, it's NOT the manufacturer's fault. Their factories are very well ventilated and the material is kept clean and dry. I have never been in a factory with sustainable humidity levels above 40%, the percentage needed to sustain mold growth. I've been doing a lot of research on mold lately because the last couple of years I've seen an uptick in the number of new modulars with mold problems.

I visited a home in the mid Atlantic area two years ago that was completely black inside and out. It was a spec and had never been occupied and the builder couldn't sell it in that condition. He had closed it up for a couple of weeks when he went of vacation. Just TWO WEEKS! The painters and drywallers had just finished and the humidity was close to 98% the entire 2 weeks.

When he got back, he noticed quite a bit of mold throughout the house but thought he could just do a good cleaning and that would take care of the problem. It continued to spread and he finally had to completely gut the house, take off the siding and shingles and remove all the insulation. He hired a company to spray the wood structure and plywood and then he rebuilt the entire house. Cost: $105,000.

I'm not sure he declared the mold problem when he sold the house, but I sure wouldn't want to be the new homeowner! And if the mold comes back, the new owners will not only sue the builder but also the manufacturer and anyone else that had a hand in the cleanup and repair. So be very careful, mold is a very hot topic with home buyers.

According to Vicki Lankarge in her book “What Every Home Owner Needs to Know About Mold & What to Do About It,” mold remediation can be broken up into 5 levels: level one being the least contamination, level four being the most, and level five HVAC and air conditioning systems.

When dealing with mold contamination in your home it can be difficult to decide when a mold remediator is needed or what you can take care of yourself.

In the following 5 levels, you will have a guideline to go by when removing mold from your home :
5 Levels of Mold Remediation

Level I (10 square feet or less)
Smaller infestations categorized in level I is mostly found on ceilings or baseboards. Level I mold contamination may be cleaned without hiring a mold remediator, but there are several important safety precautions that you need to know :
1. Do not attempt cleaning mold if you suffer from asthma, allergies, or immune disorders
2. Wear gloves, eye protection, and an N95 disposable respirator
3. Vacate from your work area any infants less than 12 months old, individuals recovering from recent surgery, anyone with a suppressed immune system, or people with chronic lung diseases such as asthma, sever allergies, emphysema, etc.
4. Contaminated materials that cannot be cleaned should be removed from your home in a sealed plastic bag to prevent an infestation in another part of your home.
5. Clean your work area when you’re done with a damp cloth or mop.
6. Make sure all areas are left dry and visibly free of mold contamination.

Level II (10-30 square feet)
To remove mold from an area category the size of level II (probably one wall panel), the same precautions used in level I should be taken as well as the following :
1. Moldy materials should be covered with plastic sheets and sealed with tape before any handling or removal of materials. This will contain dust and debris. It may be wise to double wrap in plastic before escorting the moldy material from your home.
2. When the mold removal is finished, vacuum the work area with a HEPA vacuum. Clean the area with a damp cloth or mop.

Level III (30-100 square feet)
Mold contamination this size (patches of mold on several wall panels), should still be handled with the same precautions as level I and II as well as the following added measures :
1. Seal ventilation ducts/grills in the work area and areas directly adjacent with plastic sheeting.
2. Vacate everyone from your work area until work is completed. Further vacate adjacent work areas of any infants less than 12 months old, individuals recovering from recent surgery, anyone with a suppressed immune system, or people with chronic lung diseases such as asthma, sever allergies, emphysema, etc.

Level IV (greater than 100 square feet)
An infestation depending on how much greater than 100 square feet may require the assistance of a mold remediator. If not, the same requirements should be followed as were needed in levels I, II, and III along with the following :
1. Every worker must be trained in the handling of hazardous materials and equipped with full face respirators with high-efficiency particulate air (HEPA) cartridges, with disposable protective clothing covering both head and shoes.
2. Make sure workers completely isolate their work area from the rest of your home with sheeting sealed with duct tape, including ventilation ducts/grills, fixtures, and any other openings.
3. Make sure workers set up and use a “decontamination room,” or a chamber taped off with plastic sheeting. The outside of sealed bags containing contaminated material should be wiped down with a damp cloth or HEPA vacuumed in the decontamination chamber prior to their removal.
4. Air monitoring should be conducted prior to moving back into your home to determine if it is fit to reoccupy.

Level V (Air Conditioners and HVAC Systems)
If there is a small area of mold growth beneath your air conditioning system it would be safe to apply precautions from levels I and II to remediate the mold contamination. However, all remediation procedures for air conditioning units and HVAC systems should be left to professionals. Procedures for level V remediation for areas larger than 10 square feet are the same for all previous levels with the following precautionary measures added :
1. Shut down the HVAC system prior to remediation.
2. Growth-supporting materials that are contaminated, such as the paper on the insulation of interior lined ducts and filters, should be removed and sealed in plastic bags.
3. A variety of biocides - broad spectrum antimicrobial agents designed to prevent the growth of microorganisms - are recommended by HVAC manufacturers for use with HVAC components, such as cooling coils and condensation pans. HVAC manufacturers should be consulted for the products they recommend for use in their systems.

SIGNS, SIGNS, EVERYWHERE SIGNS!

If you've been a reader of this Blog, you know that I always push putting your business signs on your homes that are under construction.

Here are a list of my pet peeves:

• New home under construction has NO SIGNAGE on it, anywhere.


• Building lot with a foundation on it has the mason's sign, but not yours.


• Your finished home is waiting for the closing but only has the trash haulers and lawn service signs in the yard.


• Your sign has no phone number and/or address.


• Your sign is HAND WRITTEN! That's just Nasty.


• Your sign is one you get from the manufacturer without your name, only theirs.


• A muddy or damaged sign.

I know one builder that actually has the tall sign post installed at each buyers lot before the ground is even turned over. It features a sign with all his company's info and the CUSTOMER'S NAME. I talked with one of his customers and they really liked the professional looking sign and that their name was on it. I then talked with the builder and he said he has about 10 of these posts and signs and just changes the customer's name when they are moved to another lot. Initial cost of each post and sign is about $100. Lettering the sign on both sides is $100 and changing the customer's name is $20. Now that's a good deal! And guess what, he's building homes right now!

Another thing that drives me crazy is truck signage. I've seen trucks with no sign or lettering; ones with lots of pictures and design but no company name or phone number. How dare you take your truck or vans or company cars on the road without at least a simple sign that has your company name, what you build and your phone number. $15 each gets you a magnetic sign.

Here's a neat trick the Realtors started and some builders are following their example; putting up info boxes at the site. These info boxes contain a one page flyer about your business with all the info about you. PUT YOUR NAME ON IT! Put your cell phone on it! They are standing right in front of your home and they want to call and make an appointment to go through it and possibly buy a home from you.

What are you waiting for.... a sign from Heaven!

DOES YOUR MANUFACTURER REALLY LISTEN TO YOU?

Whenever I meet people on the street that I know, they say, “Hi, how are you doing?” I stop right there in the middle of the street and reply “Well, now that you asked…” but they don’t stop and they don't look back. They just kept on walking to the opposite direction. I always wonder why they pretended to be interested in what I have to say but then just walk away?

If you listen to the customer but don’t act accordingly, you will leave them standing on the street wondering whether to keep on walking or running after a real communication.

I have developed a way to stop them in their tracks but I only use it when I am sure they really don't want to know "How I'm doing". I just reply "Terrible, I have to work".

One of two things happens, they either don't acknowledge what I said because they really didn't want an answer or they stop and say "WHAT?" Now that I have their attention, I usually just chit chat for a minute and continue on my way knowing that for at least a minute I made an impression.

Is that what you do when you ask your customer "How is everything going today?"

A lot of the time we hope they don't answer in case they visited their jobsite and saw the mess left in the house by the drywaller and painter. If they do give you a negative answer, you vow that you won't ask them that question again. And if they do give you a good answer, do you really listen to what they say.

I've sat in on corporate development meetings where customer feedback has been the topic of the day. Just as many times the conclusion of those meetings has been that we need to change our marketing communication to better fit the image that customers have on us. We promise to deliver in seven days, but too often the delivery was few days late.

Solution: we start to talk about two weeks as a delivery time. Problem solved. My experience is that customer feedback rarely changes business operations.

The next time you ask a question, make sure you wait for the answer. It's not always negative. Sometimes it's really great!

HOME SHOWS - DO'S AND DON'TS

Over the years I've worked or attended 100's of Home Shows across the country and I can usually size up whether an exhibitor is going to be successful or just an "also ran".

The first Home Show I worked was for a large lumber and DIY company that I managed. We had a 10' x 10' booth and featured American Woodmark Cabinets and Crestline Windows. We also showcased our home building division. The show ran from Thursday through Sunday in early Spring.

Since this was my first show, I left the booth layout to the cabinet rep who was going to work the whole show with us. BIG MISTAKE! He set up the booth with 2 cabinet door spinners in one of the rear corners and told us to set the 2 windows in the other rear corner with our building division's floorplans and house pictures on a table in between. He then place a draped table at the very front of the booth and put a fake tree at one corner. He also put 2 chairs behind the table.

Thursday evening had a fair amount of traffic but we only had a couple of people stop and look at what we had to offer. Friday morning was a repeat of Thursday and about noon the rep had enough and said that he was going home and would see us on his next trip to our store.

I was disappointed with the traffic to our booth but I knew it could be better. As soon as the rep left, I asked the show staff to remove the front table and chairs and send over 2 bar stools. I then moved the 2 spinners to one front corner and the windows to the other front corner. I spread out our home floorplans and pictures on the table at the rear and put the bar stools behind each of the front displays. This took a whopping 5 minutes!

People almost immediately came up and spun the cabinet racks, opened them and then asked for more info. Others played with the windows and wanted prices for replacement windows. A small group was almost always at the back table looking at the floorplans and asking prices.

At 5:00 o'clock, two of my best employees arrived to relieve me. We were so busy that I stayed the rest of the evening. The notebook I brought for names of people interested in us was getting filled. Saturday and Sunday were also great for us.

What happened to change things? That's easy, we let people touch stuff!

We practiced most of the do's and don'ts at this Home Show.

Don't put a table between you and what you are showing. Think of the Great Wall of China and how it was designed to keep people out.

Don't put chairs behind the table. People are still polite and always think they have to ask your permission to get past you. I call the salespeople that sit in those chairs "Border Guards".

Don't sit while talking to people. This is just rude.

Don't talk to your boothmate while there are people in your booth. You're there to make sales, not talk about last night's ball game.

Do open up the booth and put the floorplan books, etc at the back. Get people to come into your booth. You rented the whole booth, not just the first 18" up front.

Do stand and greet everyone! Be excited to meet them. Even though you have given your intro talk about a hundred times, it's the first time they heard it.

Do use tall bar stools. You can lean on them and rest even when you're talking to people. Just don't make a habit of it.

Do keep a book with all your good visitors contact info. Better yet, hand it to them to fill out. Get them involved. DO NOT have them fill out a slip of paper for the prize you're giving away because you should not give a prize or offer a discount unless you have a carpet cleaning business on the side.

Do learn to talk to 3-4 people at one time. Remember, you're not trying to close the deal here, you're only giving out info. Don't have any candy, magnets, pencils, etc to give out, only your business cards. You're not a One Day Bath Repair business, you are a professional home builder.

And the biggest DON"T of all? Don't forget to follow up with the people that filled in their info in your book.

For help laying out your next Home Show booth email me at modularcoach@yahoo.com

CONDO SALES ARE DRYING UP

It used to be a formula for success. Find a large empty lot next to a river, bay or ocean and put up 80 condos and wait for the selling to begin. Selling out before they were finished was the norm. Now there are completed condo projects sitting with only 5-10% sold and no prospects for more sales.

From Florida to California, these projects are sitting and waiting for tenants. There are some projects that have been stopped or abandoned throughout the US. The developers are now looking for ways to get these units occupied. Notice, I didn't say sold, I said occupied.

I was sent a note by a friend in New England that a developer with 60 condos and NONE SOLD has started offering the units to people that have had their homes foreclosed. The new tenants pay about 75% of what their former mortgage was and he has already rented a couple of them.

The developer has turned from being a seller to a landlord. If he can rent most of the units over the next 12 months (and he makes enough to cover his costs), he will sell the entire project to a property management company and move on to build townhouses, which are still doing OK, considering.

I checked with a Realtor about one of the luxury condo buildings in my town and found out that the developer is offering to pay the 1st years mortgage for the buyers. I don't think that's going to be enough. There are new home tract developers here offering Mercedes Benz and Cadillacs plus closing costs to sell homes. That can run up to $40,000.

Being a small builder with many options such as remodeling, repair services will help you until things improve. Remember, there are still a lot of new homes being sold. You just have to find your niche. Read some of the earlier posts to see how others are weathering the storm.

PIZZA, BEER AND DONUT PRICES RISING...WHAT'S NEXT?

Have you been to a pizza parlor lately? If you have, you've noticed that either the price for a slice has gone up or the size is getting smaller. We sometimes think that we are the industry hit hardest be the recession, but the little guy on the corner is struggling just like you.

When you stop and get a slice of pizza for lunch, do you ever consider what goes into making one? Take pizza dough for example. Last year the flour was $3-7 a bushel, this year regular flour is $12 a bushel and the more expensive pizza flour is upwards of $40 a bushel. That would be like a 2x4 going from $3 to $40 each. Ouch!!! And of course, there's the cheese. It went up about 50% in one year to about $2 a pound wholesale.

And let's not forget the subcontractor's best friend----BEER! Hops, one of the principle ingredients, has risen from $4 to $40 in 6 months. Now that's something to drink about. And what about donuts? I can remember not too long ago getting a Krispy Kreme at my local convenience store for 35 cents. Last Friday I stopped in for my fix and they had just raised the price to 89 cents! Now that's something the government should look into for us.

If that wasn't bad enough, here is the prototype for the new $5 bill:

DO YOU NEED FACTORY FLOORING?

As long as I've been in this industry, I've seen carpeting and flooring presented by the modular manufacturers in many ways. None of them are particularly good. The quality and selection is usually mediocre at best.

First, you have your basic carpet and vinyl installed by the factory and shipped to you for finishing the seams. The problem with this method is that even though the factory tries to cover up the flooring with plastic or paper, it usually gets damaged. I've seen mold growing on it in the summer if the plastic is not removed quickly. The HVAC, electrical and plumbing subs walk over it and soil it and if you have the factory put down hardwood flooring, it will ALWAYS get scratched. There are also trimmers, painters and even your customers walking and working inside the house. You call the factory and sometimes they will credit you something for the damage and sometimes they don't.

Next you have the factories that ship the wet area vinyls installed but ship the carpet in rolls on the floor. They usually try to protect it with plastic wrap. Now you have to move them around to finish the house. Then try to find someone that will work on installing your carpet when you need it. This method is just full of headaches. If you leave the rolls in the house, you are constantly walking over or around them. These rolls are closely associated with 4 letter words.

Then you have the factories that use a nationwide carpet and flooring manufacturer to deliver and install your flooring when it is needed. On the surface this seems like a good idea. However, you'll find that the selection is limited and I've seen factory reps that don't keep your flooring samples up to date and then your customer picks a color or style that isn't in stock anymore. Added to this mix is that you can't be sure just who is going to install your flooring. It may be the same guys that you threw off a job last year.

These methods can work for the builder that only sells a couple of houses a year but when you start selling more or want to look more like a professional builder, you need a different approach.

My suggestion is to delete the factory flooring, get the credit and work with a local, trusted flooring store. They not only have a large selection but also have the installers and will stand behind their workmanship. One way to work with them is to establish a dollar amount for installed flooring such as $25 a square yard and let the carpet people show you the carpeting and vinyl flooring that you can offer for that price. You can negotiate a $2-4 per sq yd discount on the invoice and come out ahead.

They may give you waterfall sample racks of all the flooring but you should consider sending your customer to their store for selection. If the store talks them into more expensive flooring than your allowance, they pay the difference directly to the store and you still get money back. This method really works, but you've got to find a flooring store in your area that understands that you can give them more sales and installations than they would normally get. All of a sudden you have the largest flooring offering of any home builder in your area!

DON'T JUST SIT THERE, SPONSER SOMETHING

You and your company are probably involved with some activity or charitable cause that helps your fellow man. Nothing wrong with that. Most of these don't cost you much except time and maybe a little out of pocket money.

Here's a neat idea that allows you to continue to support your charity and at the same time get some PR to boot. Sponsor Something!

Years ago when I managed a construction company, we sponsored a Little League team. All the boys and girls ran around the field wearing our signs on their backs. We helped by buying balls and uniforms. If I remember correctly, it cost us about $600. For the whole summer these kids advertised our business and we almost always got a new home start from someone that watched one of the games. $600 to get a new home start....not bad!

Today there are so many things you can sponsor that it almost makes my head hurt. Sponsoring a Nascar race car will set you back about $2,000,000. But you do get your name on the rear right fender.

Sponsoring an event you can afford and also make it work for you is a job not left to the faint of heart. Once word gets out that you sponsored the Chili Eating Contest at your local fair, you'll get hit for other events. Just set a budget and stick to it.

You need to find where your target market is going on weekends. If they are horse people, sponsor a refreshment stand for one of the youth horse clubs, if they are firemen, sponsor the bingo games at their carnival. If the people are skiers, sponsor one of the events at the winter "Snow" tournament. These sponsorships usually cost between $450 and $2,000 depending on the size of the event.

The benefits of sponsoring a featured event at a big 3 day event can be very rewarding. Your company name will be seen by the event judges, participants and their families, staff, workers and of course everybody that comes to watch. Even if the event only draws a crowd of 50 people, these are dedicated fans of the event.

Be sure to promote the main event in all your advertising and name the event you're sponsoring. Get some T-shirts made for the participants and your employees. Write a small press release about what you're doing. Most likely, none of the other sponsors will.

And if you only get one home sale out of it in 2 years, that would be great! Another perk is that the people hosting the event usually have a buffet table or dinner to thank everyone that helps, That would include you!. Maybe eating some of the Chili you sponsored.

BUILDER FINDS NICHE AND ALSO HELPS VETS

Ed Kintner, owner of Kintner Modular Homes in Tunkhannock, PA was approached by America Responds with Love Inc to help build a home for a returning disabled veteran. He was more than happy to help and using APEX Homes, designed and placed the home on a lot in Hickory Hills development near White Haven, PA in February of this year.

Kintner said his company has been involved in many charitable projects over the years, such as coordinating construction of homes built by Habitat for Humanities. He said when Richard McDonough, president of America Responds with Love approached him about this unique project, there was no question about joining in."It just makes sense to help a veteran," Kintner said.

America Responds with Love is now looking for an eligible veteran to purchase the home, McDonough said. He said the total cost of the home, when furnished, will be about $183,000, but with programs and funding available to veterans, someone should be able to buy it for between $100,000 and $120,000.

Kintner said he doesn't know yet whether his company will be involved in the construction of more homes for America Responds with Love, but it is a distinct possibility.

Anyone knowing of a veteran who would be interested in purchasing the home should contact McDonough at 610-731-4673, or go to the agency's website at www.respondwithlove.org.

CREATE A TICKLER FILE

By now you all have a desktop computer, probably a laptop, a cell phone, hopefully a website and maybe a Blog similar to this one. You have computerized this and computerized that. What you probably don't have, and should, is a 3 ring binder marked "TICKLER FILE".

This notebook should be your life line to new business. I'm sure of it because I see it used by a lot of the most successful small system builders in the country. The reason most of them carry it is to write notes about what just happened when they met or talked with a prospect. They tell me that they can't accurately remember what the prospect said or wanted for more than a minute or two after the conversation and by the time they get out their laptop, turn it on, find the file containing Goldmine or some other program, they were always forgetting something. And how many of you really put enough info into your Blackberry?

One of the best of the 3 ring binder builders lives in Virgina and does about 8 homes a year. He really doesn't want many more than that and he actually has a waiting list, even today. Here is what he puts in the binder:

• Prospects name, address, telephone #, cell #, email address (need to stay in contact)
• Spouse's name, kids names and approximate ages, dog's name
• First contact date, how they found out about him (referral, phone book, website, etc)
• When, where and details (do they own land, budget, type of home, etc)
• To Do List with dates (what do the prospects want him to do, research, price, find, etc)

He carries this notebook with him at all times and I swear he sleeps with it. The last time I saw him, he had about 200 pages in it. That's 200 prospects that he looks at every day and tries to turn them into buyers. He is constantly removing pages that have bought from him, bought from others or for whatever reason decided not to build.

Does he contact them every day? NO. But he tries to find something to contact them about every week either by phone, mail or email.

And he is always asking for referrals. The referrals then become a new page. AND HE USES A PENCIL! He makes mistakes and likes to change things right away. Let me know if you need some ideas for your tickler file. modularcoach@yahoo.com

SMALL TOWN MAY BAN MODULAR HOMES

No more modular homes for Folsom, LA. At least that's what Mayor Marshell Brumfield and the aldermen have agreed upon, but it's not official until the board votes on the decision at the April 14 Board of Aldermen meeting.

Folsom, a small town in Louisiana, has issued 3 permits for modular housing, but after the first one crushed street signs, cracked streets, destroyed culverts and even broke a major water main shutting off water to residents in the area, the other two issued permits are on hold. The problem was not only with the trucks carrying the modules, but also with the 120 ton crane that came into the town.

You can't blame them for their actions, but what if you were the builder that had sold all three homes and could only deliver one. Do you think the factory would say, "that's OK, we understand, here's your deposit back"?

I would think not!

Since I had never seen this before and the town had issued me two more building permits, I would probably be that builder sitting on the curb wondering what the heck just happened!

Let me know if you've had similar situations. modularcoach@yahoo.com