Blog for Building Materials Companies

Helping Home Builders Overcome Challenges

  |  Posted in Builders

Helping Home Builders Overcome Challenges

It seems issues facing home builders are perpetual and ever-changing. Even with volume being up, builders now face challenges with the rising costs of building homes, plus how many expectations there are about safety and quality. When homes get built, homebuyers expect a higher standard than they ever have before in a time of online word of mouth and more environmental awareness.

If you sell to home builders, you already know some of the challenges they’re facing today.

Financial Challenges for Home Builders

The financial side of the home building industry has always been challenging, and an ongoing challenge  has to do with the rising cost of building materials and labor.  There is also the risk of cyclical demand, or changing market conditions and the need for the builder to continue his financial education.

In the first case, the economy consistently changes when it comes to housing. Demand for housing could easily dip to a point where builders can easily become unprofitable. Things may look very rosy today but the next downturn is coming at some point.  Builders have a reputation for extending themselves a little too far at the peak of the market and then scrambling to survive when the market goes down.

Another challenge for builders is the problem of increases in building costs after they have agreed to a price with the homebuyer. The cost of the materials or labor can play a factor, especially if prices inflate suddenly and unexpectantly from initial estimates.

Cash flow is essential for builders to stay in the black, though changes in sale volume and materials pricing could easily affect cash flow.

How Building Materials Manufacturers Can Help Builders With Finances

  1. Give as much advance notice as possible of price increases.
  2. Job site visits and installation training to reduce costly call backs, do overs and to improve labor efficiency.
  3. Financial education.  Anything you can do to help builders continue to improve their knowledge of finances is invaluable.  Two good sources are Builder Partnership and The Construction Industry Group. You won’t find builders who used to be a banker or an accountant so they need to always be learning about finances beyond the cost of a Rolex.

Safety Challenges for Home Builders

Builders need lots of  insurance in order to protect their businesses or as required by law or their banker. The cost of insurance also continues to climb and basically factors into financial and safety issues.  With premiums continually going up, builders struggle more to make a decent profit.

Then there’s the risk of workers getting injured and perhaps suing for medical compensation or an OSHA fine. Because construction workers usually end up with more injuries than other jobs, the risk of someone getting hurt is always there on every building project.

Any on-site vandalism of a construction site could also raise costs. You likely don’t want to spend money on 24/7 security, so vandalism and theft is also an unwanted cost.

How Building Materials Manufacturers Can Help Builders With Safety

  1. Job site visits to share best practices to avoid accidents.
  2. Don’t just provide installation instructions, teach installers how to properly and safely install your product.
  3. If you don’t have the manpower, use online installation lessons with tests and certifications.
  4. When there is an accident involving installation of your product, share what was learned from the accident to help builders avoid making the same costly mistakes.  Accidents are frequently caused by experienced people taking shortcuts as they forget the importance of some basic safety practices.

The more successful your builder customer is, the more of your products he will need from you.

To read more about how to sell builders, read this.

You can view my webinar on How to Sell Builders here.

Contact us me if you’d like to learn how to grow your sales to home builders.

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About The Author

I am the leading sales growth consultant in the building materials industry, I identify the blind spots that enable building materials companies to grow their sales and retain more customers.  As I am not an ad agency, my recommendations are focused on your sales growth and not my future income.

My mission is to help building materials companies be the preferred supplier of their customers and to turn those customers into their best salespeople. Contact me to discuss your situation.