Most of us will have come back to a mixture of news. It’s good that interest rates have gone down once again — but why hasn’t the business overdraft dropped?
Most people I talk to have experienced an increase in foot traffic to the showhome doors, albeit to look rather than to sign, and real estate sales are more positive.
In these times those that put the work in will be rewarded. Increased foot traffic will move to increased sales, and then construction.
I guess we have had downturns every five to seven years, and this one will pass for most.
To still be here when it does you will need to have in place some standard items in your business as listed below:
• Develop your team — give them all A, B or C grades. Support your As, train your Bs and replace your Cs. Don’t abandon your training as this is the time your people will value the need to train.
• Manage and renegotiate your suppliers and trades. Again, grade them and stick with the best (it is not all about price).
Use trade applications, interview the applicants and prepare a list of questions, speak less and listen more, check references and then train them the way you need them to operate.
• Control your costs by developing very accurate costings and budgets for each building. Implement a good purchase order system and insist on accuracy with your invoices received to the quote and orders.
This area is crucial. Many companies have fallen over on what seemed like a little slippage that eventually pushed the company over the cliff.
And always try to minimise waste for you, your trades and clients.
Tightening your schedules
• Tightening your schedules is an easy way to trim waste and bolster your bottom line. Be conversant with Critical Path Method (CPM) and have a chronological list of construction activities.
Time spent reworking how and in what order a task can take place can be repaid many times.
• Develop formal quality control and formal safety training, develop your systems with checklists for each stage and get your trades to fill out and attach with their invoice.
• Working with home owners or customers has never been more important in these tough times. Improve communication to either daily or at least twice a week, monitor your communication and, above all, keep your promises.
As well as the good business practice above, marketing yourselves in a tough market is also vitally important.
The channel that the House of the Year and Commercial Projects Awards provides to Registered Master Builders gives us a significant advantage over other builders, so use it!
Entries are open now — go online to www.houseoftheyear.co.nz to give your business the edge that this competition offers.
Also, don’t forget the RMBF Annual Conference in April this year. The theme is Smart Moves for Success, and is aimed at giving members some tools to run their businesses better.
It’s also a great opportunity to spend a couple of days catching up with fellow members and sharing ideas. I look forward to seeing you there.