While we wallow in this annoyingly long recession, one of the few bright spots in the economic scene is the housing market. The most recent statistics available at press time showed that housing starts increased 2.8% in February over January's numbers to a seasonally-adjusted annual rate of 1.77 million units. Single-family housing starts, which accounted for the bulk of this increase, rose 7.4%.
This is good news for the electrical contractors who focus on the residential market: When the amount of new residential construction increases, so does the demand for electrical products.
For many home builders, profitability has increased along with the market demand for new housing. In a recent survey by the National Association of Home Builders (NAHB), Washington, D.C., 400 home builders said their profit margins per house had increased. That's the type of news any builder likes to hear, because one of the most important measures that they use to monitor the health of their businesses is profit-per-house.
You can boost your residential business by helping builders improve their per-house profits, and it won't take a whole lot of time or effort — just open communication. In a recent column on Builder magazine's Web site, www.builderonline.com, Isaac Heimbinder, former co-CEO of U.S. Home Corp., urged builders to meet with electricians, framers, plumbers and other trades on a regular basis to discuss their ideas on improving the production process. Heimbinder said electrical contractors and other tradespeople can help builders in at least three key areas: plan and specification review, scheduling and warranty claims. For instance, by reviewing an architect's plans early in the production process, you might be able to suggest a more efficient way to wire a dimming system, or a structured wiring system for whole-house audio, security and high-speed Web access.
Scheduling can be a huge headache on the job site, and meeting with the builders and other subcontractors can potentially catch some snafus before they slow down the whole construction process. Builders can also add to the discussion, Heimbinder said, by reviewing their warranty logs with tradespeople so that everyone involved in the construction process is aware of reoccurring problems. You can help in this area, too, if the architect or builder is asking for a particular brand of product that you know from experience is chronically unreliable.
The end result of this open communication is that builders improve their profits by eliminating waste in their production process. Subcontractors who lead them to these savings are top-of-mind and stand the best change of getting called in for the next housing development.
“Your focus should be on the total cost of getting work performed,” Heimbinder urges builders in his Builder column. “Total cost includes the expense incurred in rework, the cost of warranty calls and the cost of construction delays…There usually is more money to be saved in reducing construction time, eliminating waste and lowering the incidence of errors than there is in simply trying to renegotiate prices.” Amen, brother.