Twelve Step programs are well known for their use in treating addictive and dysfunctional behaviors. The first 12 step program began with Alcoholics Anonymous (A.A.) in the 1930s and has since grown to be the most widely used approach of other programs in dealing not only with recovery from alcoholism, but also from drug abuse and various other addictive and dysfunctional behaviors.
I apologize in advance to any of my readers who may personally been or have family or friends in or in need of a 12-Step Program but I believe that the basics of these programs not only provide hope and a foundation for personal self-improvement but also for the structure of success in any business and, specifically, the homebuilding industry. And please forgive me for this statement but I believe that much of what I see across the country in homebuilding and residential development is often dysfunctional.
So with what I hope will be a little latitude and tolerance on your part, here is “Dr. Dan’s 12-Step program for success in Homebuilding and Residential Development”:
Step 1. – Admit Powerlessness – we must admit that we are powerless over the market as it is established and managed by forces beyond our control and acts solely of its own volition. We, as builders and developers, cannot create a market nor the demand for housing, only work to satisfy the needs and desires of the market as it may exist from time to time while recognizing that demand is subject to continual evolution. And while we may be powerless over the causal factors of the market, we are not powerless over the actions necessary to satisfy the market
Step 2. – Find Hope – we must believe that a power greater then ourselves can be of assistance and that power is knowledge – knowledge of the market and all of its components. Only by studying the housing market and all of the underlying factors thereof can we hope to understand the true demand, the competitive factors that exist and the real and viable opportunities that are presented for success.
Step 3. – Never Surrender – we must make a decision to accept reality and take action, not just give up and fall by the wayside. That action is to create a strategy for success based upon thorough research and analysis of the demographics and psychographics of the market, the economic conditions and factors, the competitive marketplace including both new and resale housing, and area and site specifics.
Step 4. – Take Inventory – we must understand who we are as builders and/or developers and what we can and cannot do well. Self-analysis is essential to understanding our capabilities and our limitations, our strengths and our weaknesses, and recognizing that how we see ourselves is not necessarily how others, be it our customers, our trade partners or our lenders, perceive us.
Step 5. – Utilize Your “Inventory” – we must build on our abilities, accentuating our strengths and working to improve our weaknesses, not just by internal growth and training but also by enlisting the aid of industry professionals whose skills are additive to those we already possess. Work with the best and brightest architects, engineers, land planners, landscape architects, merchandisers, sales trainers, advertising and marketing talent – create a homebuilding and development team that exudes excellence and the market will reward you with more sales and higher profits.
Step 6. – Be Ready – we must stop the inertia and stop continuing what does not work or does not work to the level that is required or desired. Look for new opportunities in location, land and housing products as well as within internal operations. Investigate alternative financing options that will allow you to expand when necessary. Always be ready to take advantage of opportunities when they are available before they are grabbed by someone else.
Step 7. – Ask the market – we must take the time to regularly validate our tactics against both plan (strategy) and budget. Check the progress of every housing development on at least a quarterly basis to identify variances before they become problems to guarantee optimal performance. Recheck the market and the competition to determine what is changing and identify the trends that will impact your success. Verify each of your advertising and promotional program components for cost and effectiveness. Regularly evaluate your product lines and pricing to determine opportunities for improvement.
Step 8. – Make a list – we must examine every component of each of our communities (or locations) and make two lists – the first includes everything that is great, the second includes everything that can be improved. Throw the first list away and then work to make every element on the second list better. Repeat that process regularly until the second list is blank. Then turn the task over to someone else and repeat the process.
Step 9. – Make amends and accept reality – We must remember the past for what it is – the past. Although the housing industry is back to reasonable health and the future looks bright, we will not see a return of the unsustainable and unjustified demand that existed ten years ago and that is a good thing. The markets have changed and will continue to change over time – the population is aging, Millennials are not yet following in their parents’ footsteps regarding household formation and home purchases, the ethnicity of the country and future housing markets continues to evolve. We must adapt and change how we do business.
Step 10. – Continue to Take Inventory – we must never stand still as inertia will allow the competition will eat us alive. Yesterday’s subdivisions must become today’s communities providing better living environments. Yesterdays’ home designs must give way to more livable spaces that reflect today’s lifestyles and incorporate sustainability and cost-effectiveness. How the market lives in new homes and new communities continues to evolve and we must continually update our products to reflect that reality.
Step 11. – Pray and Meditate – prayer is good for the soul and meditation is good for relieving stress and overall health but neither, by themselves, will create business success. Please continue to pray and, if not already there, add meditation to your daily ritual. But please also remember the old adage, “God helps those that help themselves” and take action to make success a reality. Don’t just pray for success, initiate a plan of action that will make that success a reality and one such plan of action could well be these twelve steps.
Step 12. – Help Yourself by Helping Others – give back to the housing industry of which you are a part as well as the community in which you operate. Good citizenship is not only socially beneficial but it is also good for business. Become active in your local and state HBA and the NAHB and work to share your knowledge and talent toward the betterment of the housing industry, then promote that participation as evidence of your recognition within the industry. Support local community organizations and charities, not only with financial contributions but also by sharing your talents and knowledge in active membership and leadership roles so that you become known in the community for public service while gaining additional recognition and developing business contacts.
If you follow these 12 steps you are on your way to success and profitability. But, as always, that’s just my opinion!
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