Housing Giants - August 11, 2008 - (Page 31) contract, how many have closed and how many of them are specs. Thomas looks at the report daily; it’s updated weekly and used by construction managers, superintendents and salespeople. Thomas tracks his costs of production in a monthly “flash report” that compresses all sales and production activity in every community. On the production side, Thomas says the report tracks production costs in eight different categories, including: fees, permits and underground work; site and structural costs; mechanical costs; framing and exterior costs; interior and finishing costs; landscaping; community clubhouse and pool costs; and land, financing and marketing. Thomas analyzes the percentage of the overall budget that is being spent in each category. “If things are above that overall average total, that means I am spending more in some categories than what I have overall. It’s like an ongoing budget review to see where we stand,” says Thomas. LocaLizing costs and production data Just as builders must look at economic data on a national level, they should also compile their data and analyze their financial ratios per project or neighborhood. Graham says that every neighborhood can produce a different mix of margins and returns. Builders should track and analyze land costs, building costs per square foot, cycle times and other factors for each community and region. Tracking and itemizing data on a community basis can allow builders to fine-tune their operations to meet the particular production needs and challenges of each neighborhood. “Very few companies seem to be tracking financials on a neighborhood by neighborhood basis, which is the major unit of business within our industry and lots is lost,” says Graham. At Epcon Communities, Thomas says that production managers should also carefully watch the sales reports to ensure that they are not building too many spec homes in certain communities. By using reports to analyze and increase the efficiencies of the production process, they can also decrease the cycle time and more properly allocate superintendents and resources in the field. Weekly production and timeline www.Housinggiants.com 8.11.08.Housing giants 31 http://www.housingzone.com/giants/article/CA464412.html http://www.housingzone.com/giants/article/CA6415828.html http://www.housinggiants.com
For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.