PRESIDENT'S MESSAGE


resource at our fingertips. That resource is the GHBA’s fine group of associates.


By GHBA President MIKE DISHBERGER, GMB, Sandcastle Homes Inc.


The worst


Partner with an Associate A


s home sales have fallen off during the past few years, I have learned that we builders and remodelers have a great


As builders are pressured by home buyers to lower prices, our first thought is to lower our costs.


way to lower costs is just to say to suppliers “cut your price 10% effective immediately.” While it sounds simple and straightforward, in the end it does not work. Not only will your suppliers be upset, but your relationships will suffer. You will alienate your suppliers and contractors—and when business turns around it will be you who is paying the price.


"A better approach is to sit down with each of your


contractors and have a conversation about how to reduce costs as a team.... We found that by saving all our sheetrock


repair work until the final punch out that we saved both the contractor and ourselves significant time and money."


6


A better approach is to sit down with each of your contractors and have a conversation about how to reduce costs as a team. Your contractors are the experts in the industry in their fields. They know about other builders’ and remodelers’ products, they have the knowledge of their product or labor, and they can help you sort through all the details.


There are many ways to save money besides a direct cost cut. Try to find ways to save your contractors time, which in the end is money. For instance, I ask my contractors if there anything we are doing to make their life difficult, such as repeated trips to the same job, not giving them enough information or scheduling them in an ineffective way.


If you can reduce the number


of trips to a jobsite, the contractor might be able to lower prices accordingly. We found that


by saving all our sheetrock repair work until the final punch out that we saved both the contractor and ourselves significant time and money. Another example is knee spaces on the master bath cabinets. Our cabinet company told us that this is something that is going away in new designs. So not only did we save on the cabinet, but we also saved money on smaller amounts of mirrors and granite. In two years not one customer has asked to have knee space in their master bath.


Another question I ask of our suppliers: “Is there a substitute product available at a lower price?” Sometimes the trade off on perceived value is not enough and we stay with our original product. Other times it is something a buyer does not care about or is unwilling to pay for in the home. A simple change of a vent hood that looked exactly like the old vent hood saved us $50 per home.


We also sat down with our engineer and questioned the steel beams in the home (which cost a fortune). After a few minutes, the engineer pointed out that if we made a minor correction to the plans, he could eliminate the steel. We then proceeded to eliminate some beams without hurting the design. I have many other examples of how I have received valuable and cost saving information from our associates.


It all comes down to a partnership with our associates. And of course I recommend using only GHBA members. So sit down and listen to what they have to say. experience for both of you.


NOVEMBER 2011 | HOUSTON BUILDER | GREATER HOUSTON BUILDERS ASSOCIATION – BUILDING A BETTER FUTURE


It will be a good


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