Most of you are two months into a new financial year. Your first month balance sheets have been and gone and the next month is looking similar.
Now for the hard questions. Is it to budget? If not, why not? Did you have a budget? If not get off your butt and sit down with your advisors now and do it! No excuses. A backdated one will still pull you through the year. Then sign in and work the plan.
If you are in the large group of people who do their balance sheets quarterly or half yearly, you risk failure in these volatile times. Most failures I have dealt with have lazy accounts. They need to be produced monthly — no excuses.
The advantage of this market is that it gives you time to plan, think and strategise. If you look back at your business two years ago, is it the same or have you made the changes that put you in a better place going forward?
Have you got the same staff? For most, this answer will be no. As I mentioned in a previous article, you should have let the Cs go , retrained or even let go some Bs and retained the As.
There is always a balance of retaining capability for another day or just making it to another day. Don’t be afraid to make the cuts where leadership calls for it.
What have you done to your sales operation? Increase exposure to build some of the 50% that is still out there, and cut the deadwood that keeps telling you “next month I will get those deals” — because, if you’re honest, they won’t.
Is your customer service exceptional? If not, why not? We all look to change all around us — or is it us?
If you have customer unrest, now is the time to address this. Get a group of former or current clients in a room together and listen to the feedback. It will be the most productive two hours you will spend this year.
In this time of quiet you should be working your pricing. Prices have come back. Can you build at 2005 prices, or earlier?
Some are, with margins intact. Will you be left behind when the market moves off?
Remember the buyers have set the price, so you have to set your margins to survive. The rest is the bricks-and-sticks cost or budget to complete the home.
You need to be tough and disciplined to work this way and do well. Every supplier wants their clients to prosper, so partner with them to see how you can be more efficient.
Ask yourself: “Is my product what the market wants?” Many builders are doing well in the niche they have been working in. These are generally highly respected builders who are known for the type of home or structure they build, whether it be retirement units, tilt-slab warehouses or high-end, sustainable architecture.
In this reduced market are you known for what niches you build in? How can you change that? Are there gaps emerging in the market? Who do you need to get in front of?
Many years ago I sold furniture by cold calling offices. It was a short-lived career of three months but the thing I took from it was that the hardest door to go through to get business was your own.
At the recent RMBF conference we heard from several builders of their successes and the projects they built.
For me it was inspiring how adversity can create opportunity. All too often we stay insulated within our own workplace.
The RMBF is an association of builders who are more alike than you might think. I suggest you pick up the phone and talk to another builder today and listen to their ideas on how you can do better.