Lessons learned from 36 years in the housing industry
Seasoned home builder Tom Stephani tells his peers what he'd change if he could do it all over again
There's an old saying that goes, "Know how to avoid making mistakes? Experience. So how do you get experience? By making mistakes."
Experience can be a great teacher, but it can also be very painful. As I enter my 36th year in the residential construction industry and my 25th as a builder, I look back at all the experiences I have had. Certainly there have been plenty of mistakes, but there have also been many times that a previous experience has led me to make a better decision. If there was such a thing as a "do over," what would I have done differently? The list is long, but here are the Top 4 things that I would change:
- Industry involvement. One of the first things I did when I started building homes was to join the Housing & Building Association of Colorado Springs. The problem was, I never got involved in the committees and events that were integral to the organization. I have no idea how many opportunities were missed because I didn't participate. Later, I resolved to be active in the local HBA and the NAHB. The payoff came in spades: connections, credibility and friendships.
- Community involvement. Along with getting involved in the industry comes being involved in your community. Joining and participating in local charities, chambers of commerce, Jaycees, Rotary or any number of other groups expands your knowledge base and gets your message out. Most important, you're giving back to the community.
- Education. Never miss an opportunity to learn. Whether it is pursuing an NAHB designation such as Certified Graduate Builder (CGB) or Certified Green Professional (CGP), or attending the International Builders' Show, Custom Builder Symposium or a local community college class, the constant pursuit of knowledge will help you run a more efficient and profitable business.
- Be prepared for the cycles. The home-building industry has always run in cycles, and I believe that it always will. This current recession is worse than most, but the home-building environment of the 1990s and early 2000s was much better than normal. Many builders were lured into a false sense of security. After experiencing a particularly bad Colorado housing recession in the late 1980s that nearly bankrupted me, I vowed to be ready the next time and not ignore the warning signs. Oversupply, exorbitant land prices and lax lending standards inevitably lead to problems for builders. By cutting back on specs, managing lot supply and having a rainy-day fund, builders can survive a bad market and come back stronger when economic conditions improve — and they will improve.
Making mistakes is part of being in business. Avoiding the big ones and learning from the small ones makes for a sustainable custom home-building company.
|Nationally recognized speaker and trainer Tom Stephani, MIRM, GMB, MCSP and CAPS, specializes in custom homes; infill housing; light commercial projects; and developing commercial and residential land. You can reach him at firstname.lastname@example.org.|