John Burns: 4 successful builder strategies for maximizing revenue

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Home builders must be firing on all cylinders to make money during these trying times, says John Burns, CEO of John Burns Real Estate Consulting. Burns highlights four common strategies firms are employing to maximize revenue.

May 04, 2011
John Burns: 4 successful builder strategies for maximizing revenue

John Burns: 4 successful builder strategies for maximizing revenue

Home builders must be firing on all cylinders to make money during these trying times, says John Burns, CEO of John Burns Real Estate Consulting, Irvine, Calif. In a recent report, Burns highlighted four common strategies builders are employing to maximize revenue:

  • Investments in technology - Burns says, "One unsung reason that big builders have fared better than many smaller builders is their ability to invest in technology. I'm not talking about cumbersome accounting systems, but rather very nimble tools to: quickly assess a market for depth of demand; survey prospective buyers for the design features they will pay for; or strip excess labor cost out of a very energy efficient house."
  • 100-percent focus on sales - "From the CEO to the framer, the most successful companies are all about sales. Roll out the red carpet for anyone who takes the time to visit your website or community. Tell everyone you know about the well-designed and well-built homes you are selling at fantastic prices."
  • Manage the balance sheet - "Many of the investors we have worked for over the last five years have been amazed by the lack of financial sophistication in the home building industry in comparison to other industries. It's true that many companies took on as much debt as possible, from too few sources, and with real disregard to covenants. However, most of the publicly held builders were much more disciplined and sophisticated than perceived and should be widely applauded. Given what this industry just went through, their balance sheets look fantastic."
  • Focus on the details - "At every level of the organization, the best companies are focused on detail. They know everything about the land they are buying, the home they are building, and consumer they are selling too. Mistakes are costly, so mistakes are to be avoided."

Read Burns' full report.

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