It continues to be a wild year for the housing market in the United States. The media is still reporting gloom and doom, and bank money is tight. In many parts of the country the economic slowdown is not only affecting production builder sales but custom sales as well.
Now more than ever it is important to know your numbers. A good place to start is by focusing on your income statement. The top section focuses on sales, cost of sales, and gross profit (margin), while the bottom half looks at operating expenses including indirect construction costs, sales and marketing expenses, financing expenses, and general and administrative expenses. In this and future articles I will focus on providing survival tips in each category, starting with sales.
Back in the days when I worked as product manager for a company that sold computerized accounting software to builders and contractors, the company’s owner had a saying which (although obvious) still rings true today: Nothing happens until you sell something.
But sales is not a strong point for many custom builders, especially those who grew up in the trades and never had any formal sales training. In the past, they were able to sell new work based on reputation. Potential customers looking to build a custom home were not as sophisticated as they are today nor was the news media pushing consumers to postpone buying or building a custom home.
Over the last several years I have seen many of my custom builder clients go from having sales come to them to having to go out and become salespeople. Assess the strength of your sales strategies by answering the following questions:
- Do last-minute negotiating tactics from customers erode your profits or kill your sale altogether?
- Do customer objections leave you tongue-tied?
- Do your customers use stall tactics?
- Do customers beat you up over your square-foot sales price?
- Are you having trouble selling your spec homes?
If you answered yes to any of these questions you can probably improve your situation by getting some professional sales training, which will help you to:
- Lay the groundwork for recognizing bad habits.
- Get motivated to make changes.
- Enjoy more sales with higher profits.
- Have fewer headaches once construction begins.
- Generate happier customers.
There are many opportunities for sales training within the building industry both in classes and from consultants. Make the time to learn from a pro because nothing happens until you sell something.
