Many custom builders would love to add the profits of production building to their business. However the road from custom to production isn’t an easy one, and will require many readjustments to your thinking and processes along the way. It’s not as simple as scaling up your current operations. Scott Sedam for Pro Builder recently broke down the steps to becoming a production builder.
1. Change your strategy.
You can’t build production homes with a custom mindset. This will require deep commitment from every member of your team. Everyone will have to be brought into a new way of thinking and doing things. In Sedam’s words, you can’t be “the builder who loves to say, ‘Sure we can do that. We can build anything’” anymore.
As a production builder, you will have to set limits around personalization and options. You may need to stand firm around dates for selecting options.
2. Change your product and design philosophy.
Your business will have to learn to build with an eye towards efficiency and replicability. The options you create for your customers need to be like interchangeable parts. Imagine building mass-market furniture— if your legs are all the same height, you can still build tables in a wide variety of sizes.
3. Change your purchasing habits.
You also have to change your buying habits. Repricing and rebidding are now much less tenable, and certain tradesmen may not be able to adapt to production building either.
4. Change your scheduling.
Perhaps the most important change you will make as you shift to production is scheduling. As a custom builder you allowed the buyer to drive the process. With production building, their needs, while still important, take a backseat to the building process as a whole. Staying on schedule is more important than ever as a production builder.
Every aspect of your process must enable your schedule to run smoothly—from getting accurate bid packages in place, to creating an orderly options and selection process, to maintaining strong relationships with suppliers and trades.
5. Change your field management philosophy.
You will have to fine-tune relationships with labor crews, so they better understand what is expected. Since your jobsites must be more appealing to potential customers, waste management will take on greater importance.
6. Change your approach to sales.
Salespeople must be trained to “sell what we have”—and resist the temptation to offer changes, upgrades, and alterations for every customer who walks in the door.
7. Change your land and lot policies.
Only when you have reworked your business from the ground up can you address what’s below the soil—land and lots. Buying lots becomes easier when you have a retinue of plans and materials you usually use for your homes.
Switching from custom to production will require a commitment from your entire team and affect all of your business processes. You may not be able to continue building custom homes on the side once you commit to production building schedules. Writing for Pro Builder, Scott Sedam urges those who wish to make to switch to first invest time into thinking about how to simplify your existing processes. Simplicity is at the heart of the production building mentality.
For those who do manage to grow their businesses, they can say goodbye to razor-thin margins and embrace the greater predictability that comes with production building.