Last month, we discussed the importance of good sales training. Although builders have seen more traffic through their homes and communities lately, it is still a buyer’s market out there. This makes it even more important that your team has the necessary training and tools in place in order to close a deal. As a sales manager, you may want to consider spending a bit of time each week or even focusing one meeting a month on helping your team brush up on skills, role play or even just discuss actual interactions to brainstorm ideas and determine how to improve the response to get to a close. I would also encourage you to view Tom Richey’s and some of our other Sales On Demand webinars catalogued on www.homebuilderuniversity.com for some great ideas on working with prospects.
This month, we will focus on the importance of having discipline. Now that we have made it through the big push in sales to meet the deadline for the tax credit, builders need to quickly build and close those homes before the June 30 deadline. It would be great if you could do this profitably. Hopefully, you have been reading my articles and listening to the webinars over the last few years and have been able to implement a few ideas to help you improve and streamline your organizations. If so, I wish you the best as you get through the next couple of months and want to remind you that you must stay disciplined to ensure your organization continues to operate the way you intend. Otherwise, it may become a scramble to meet the deadline as people work around policies and procedures to do it the ‘easy way’ and then, ultimately, you will sacrifice your profits. Don’t let this happen. Stay disciplined.
A couple of the greatest mistakes we have found are:
Don’t follow policies and procedures consistently—In order to have a successful organization and make decent profits, you must support the policies and procedures you have in place. It may seem easier to cave and go the easiest way, but you need to stand your ground and enforce the rules. They are there for a reason.
An example of this would be if your company has implemented a purchase order system, using the purchase order from the authorization of work to the payment eliminating invoices. No work was authorized without a purchase order, including variance, and no invoices were accepted from the trades or suppliers. During this housing recession you have abandoned this policy and procedure and are now releasing work with no purchase order and you are now paying off invoices. By abandoning the purchase order policy you have lost control of your construction cost budgets, variance controls, and increased the amount of management effort involved in the process, which is the exact opposite result you anticipated. Now as the market recovers, it will be very difficult to reinstitute the purchase order discipline.
Don’t hold people accountable—Many times we see companies bending over backwards for people who may not be doing their jobs or following stated policies and procedures. We have found owners are the worst violators. Let me give you an example. The accounting department sets a policy that they will only pay a subcontractor when complete documentation is submitted by a certain deadline. A trade contractor misses the deadline and does not provide complete documentation. Accounting refuses to pay him in this month’s check run so, he goes to the owner. The owner overrides accounting and insists that this trade contractor be paid this month no matter what. The trade contractor gets paid.
Now, this may not seem to be a problem on the surface, since the money was due to the subcontractor. And now that he is paid, he is no longer bothering you; but it has actually caused a HUGE problem within your organization. Why? Because, you, as the owner, have completely undermined the accounting department; the accounting department does not have the required documentation to pay; there is no longer urgency to complete the work to get paid; and the trade contractor now knows that he doesn’t have to follow any policy or procedure because he can always go to you, the owner, for an override.
Don’t set yourself up for failure. Many of you have worked hard to improve your organizations, and it would be a shame to see all that work go by the wayside because you could not stay disciplined enough to follow your own policies and procedures.
Over the next couple of months, we urge you to stay disciplined and enforce your policies and procedures. I am not saying you cannot make slight modifications or improvements, as necessary, but make sure you are being consistent with the goals and reasoning for why you had set these standards to begin with. Best of luck to you!
Next month I will discuss the next mistake builders make: Not Maintaining Spec Inventory and Models.
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