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15 Ways Builders Can Solve Their Trade Shortage

In the May 2017 issue of Professional Builder magazine, Contributing Editor Scott Sedam wrote a captivating article showing how builders are doing an inferior job of managing their trades – at a time when trade shortages are a limiting factor virtually everywhere across the country.

According to the TradeComm survey that he conducted, strong local builders consistently do better than nationals or multi-divisional regionals at working with their suppliers and trades. Here are 15 ways in which they do that.

1. Communicate to suppliers and trades. What are your plans? How much business is in the pipeline? What does the economy look like for the next year?

2. Ditch bid price as your sole criterion and resolve to buy only on total cost, which is the one thing that really matters.

3. Know that to get the best trades, you must earn them.

4. Understand the issue is not merely the best trades, it’s best crews, and that can make the difference between profit and loss.

5. Kill the paperwork load. Assemble all documents that a trade must use to build our home, and then work towards cutting that in half.

6. Simplify wherever possible. If there are shortfalls in your systems (like last-minute changes), then both you and your trades will pay the price many times over.

7. Bid packages 100% complete, with final plans and specs fully detailed and accurate.

8. Start packages 100% complete, detailed and accurate with job-specific plans and working drawings.

9. Negotiate firm dates with sales and the design center for all options and selections and hold sales accountable to manage customers to those dates.

10. Manage VPOs down to the minimum. Every VPO is a loss – for builder, supplier and trade alike.

11. Reduce charge-backs to an absolute minimum, with a goal of zero. Like VPOs, each charge-back is a loss for all.

12. Have the best-trained field construction managers in town.

13. Maintain an intelligent, proactive schedule that reflects the true capacity of your systems, processes, and people working within the current capacity of your suppliers and trades.

14. Offer nonmonetary rewards.

15. Accept your responsibility to become involved and show leadership on the local level in the development of the trade base and demand the same of your colleagues, competitors, school officials, and politicians.

Sedam also states that the strong local builders by and large are substantially more profitable than the true giants of the industry. He believes that the supplier/trade element is an essential driving factor for that. I agree.

My paternal grandfather invented the “spraying implement” that we all know as the bug sprayer. The vehicle in the above photo is a super-sized version of that bug sprayer and was built by the folks at Northwest Exterminating. Since their headquarters is just down the street from our office, I brought my Dad and my kids there to get a photo in front of the vehicle. I wanted my kids to see what my father’s father invented – as a way of honoring him on Father’s Day.

To Your Success,

Recent Referrals, Thank You!

Wow! Here we are towards the end of June and boy is it HOT HOT HOT!! There are many fun things to do this time of year including swimming, hiking, biking, kayaking, or just grilling hamburgers on the back deck. Whatever your summer looks like we are glad we are a part of it. Special thanks to a few people who have referred our company to others. We really appreciate you for thinking of us!

Mike Loudermilk, MJL Grading Co. – Grading Contractor  770-992-1612

Greg Keenan, SDI Engineering – Engineer  www.SDIEngineering.net

Shannon Bechtold, FrontDoor Communities – Home Builder  www.FrontDoorCommunities.com

Welcome New Client: Liz Davies, ESD Homes

Liz Davies of ESD Homes found her calling 15 years ago while pregnant and renovating her own personal home. Understanding that renovations can be stressful and sometimes complicated, she reached out to a contractor to assist her with some projects.

Her experience using this contractor left more to be desired and she discovered very quickly that she was very capable of completing these jobs herself. She was very pleased with the work she was able to accomplish and she dove head first into remodeling and renovating homes for speculative sale.

Up until 2008 Liz was renovating and remodeling homes in Buckhead and midtown. After the speculative market crashed, she found herself working with homeowners directly.  Liz’s growing small company shared office space with one particular architect and learned the importance of good architectural design and execution.

Today most of ESD Homes’ clients are people who want to improve their current usable space. Many of these clients come to Liz from architects and designers who have given the clients a relative idea of what they want done. Liz and her team then come in and make each plan a reality.

Liz heard about our company from a friend and decided to use us for an addition she was working on in Atlanta. This project required adding a crawl space to the right side of an existing home, a garage to the front and retaining walls that extended from the home to create a driveway.

We asked Liz Davies about her experience working with Herbert Construction, to which she replied, “You guys were super professional from beginning to end. You asked questions and details about the project that weren’t clear on the plans. This helped me to think about what problems could arise so that I could plan accordingly.”

We really enjoyed working with Liz on this project and since the completion she has referred us to several others. We appreciate Liz and hope to work on many more projects for ESD Homes.

Welcome New Client: Brian and Randy Shiltz, t-Olive Properties

Brian and Randy Schiltz of t-Olive Properties have always been in the construction arena. Their father was a custom home builder in Big Canoe, GA until he retired in 2008.

The t-Olive brand was started by the Schiltz brothers in 2008 after they both left Hedgewood Properties and they decided to work together and finish houses that banks owned or other builders had started but couldn't finish during the downturn. Eventually their focus shifted to high-end remodels, custom homes, and basement finishes. Most of their projects now involve new home construction.

 Their typical customers come from production type homes and look to  t-Olive for their second or third homebuilding experience. They want a 10 year home and not a two year home. These homeowners are now at a point in their lives where they know exactly what they want and are able to afford it.

Brian and Randy pride themselves on being a small boutique custom construction company that builds homes from Atlanta to Ball Ground. They are also part of the Southern Living Custom Builder Program and represent the Atlanta territory.

Recently, they were working on a big addition located in Atlanta. They were referred to us by another builder who builds the same type of houses and thought we would be a good fit. This project called for tall garage walls with an elevated structural concrete slab, several site retaining walls, and the construction of a pool house that included basement walls.

“We needed someone who could ask the right questions about a project like this. You guys were so easy to work with in the field and in the office. It’s obvious that your team can easily handle technical and unusual jobs such as this and do it on schedule,” said Brian.

We love doing projects like these and hope to complete many more for Brian and Randy Schiltz at t-Olive Properties.

Welcome New Client: Jeff Dinkle, ECO Custom Homes

Eco Custom Homes was founded by Jeff Dinkle in 2000. Some of his first projects were speculative and built with his own money. Over the years he continued to build “spec” houses but the size and complexity grew into the $million+ range. This included the very popular high-performance “green homes” that have been in great demand for many years.

Currently Eco Custom Homes focuses on custom and high-performance homes, large home renovations, light commercial restaurant build-outs, and high rise residential projects. These projects typically float between $300,000 to $2 million+ in construction and are usually located inside the perimeter.

With the complexity of these projects, we asked Jeff what he felt he needed from a poured wall company. He explained, “I have had contractors mess up the foundation, and these are high-end modern homes that are supposed to have 0 defects. I need someone that has the ability, equipment, and skill to do complicated and technical projects.”

Jeff was looking for a new poured wall contractor and was referred to us by a friend.  He called us to help him with an addition he was constructing in Atlanta that required two phases of work for us. First, we extended the basement and added retaining walls to the site. We then came back to construct garage walls to the back of the property which required concrete line pumping from the street.

Once we completed the work and asked Jeff what his thoughts were regarding our process, he replied, “The ability to give a digitized layout and exactly replicate the dimensions of the plan are a huge asset for me. I do not have to question if the foundation will be square, I know it is. I am certain that if there is anything technical in a set of plans, you guys can do it.”

Complex projects are what we specialize in and we are glad we were able to show Jeff some of the ways that we make things easier for our clients.