Avoid mistakes BUSINESS
30 | DEVELOPMENT WORDS |Margaret Wylde
community development.. T
Over the coming months I want to help you: A. Avoid costly mistakes. B. Build a community and homes that optimize profi tability and return. C. Stop building a commodity and start building a unique, diffi cult-to- duplicate customer-desired community. We have been employed by many investors and developers to identify and correct problems after the community plans have been initiated or, worse, after the community has been built. Though we enjoy solving these problems, we are far more gratifi ed
his is the fi rst in a series of six articles that I have put together to detail the ABCs of
by helping the developer and/or investor ensure that the community is successful from the outset. If you identify with any of the mistakes below, then you will be interested in reading the series. You will learn that a minor fi nancial
and time investment in valid research will produce a product and pricing that match what the target market sector wants, leading to a larger market share, faster sales, greater profi tability and higher customer satisfaction.
Avoid Costly Mistakes Communities worldwide are laden with costly mistakes that many developers are unaware of, because they did not determine what the ideal product, positioning, promotion and
price would have been. And while many developers study the competition to see what is selling, most are unaware if the product is what the customers really want in the fi rst place. In the next series of articles, we
will discuss critical errors and defi ne revenue-increasing methods to avoid mistakes in fi ve areas: getting started, planning the community, positioning and marketing the community, earning sales, and delivering a high quality customer service.
The most common mistakes are listed in this article. The next articles in this series will provide concrete examples of mistakes and ways to avoid them completely or mitigate the damages and correct the course.
www.opp.org.uk |MARCH 2011
The world is full of developments and built communities that are laden with costly mistakes. Often, this is because the developers concerned did not do enough work beforehand, determining what the ideal product would look like, and how it should be positioned, promoted and priced. While many developers study the competition to see what is selling, most are unaware if the product is what the customers really wanted in the fi rst place.
Costly errors
1. Falling blindly in love with your product.
2. Using generic research data from large-scale studies of boomers (or other market sectors) and assuming it represents your prospective customers.
3. Assuming you cannot fail based on the sheer size of the boomer market.
4. Failing to learn who your prospective customers are, what they want and how much they will pay.
5. Spending big money purchasing before you know if a market exists for it.
6. Failing to obtain an independent, comprehensive full- scale feasibility study.
7. Engineering the results of the market feasibility study.
8. Ignoring the results of the market feasibility study.
9. Building a product based on the competition and targeting the same target market in the same market area (creating a commodity.)
10. Assuming you will not have competition.
11. Assuming you will keep the competition out if you build fi rst.
12. Making the project “work fi nancially” on paper (increasing prices in the pro forma so that the project will cash fl ow.)
13. Building one successful community and assuming the model will be successful everywhere.
14. Allowing the architects and land planners to plan the community based on their previous experience.
Plan carefully | One false move and you could easily send your whole project crashing to the ground, warns Margaret Wylde
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