Home building is two businesses under one umbrella. It’s manufacturing … the area responsible for making houses … and it’s marketing … the area responsible for making money.
You can be a great builder, but if you aren’t great in marketing and sales, you’ll go out of business. The builder with superior sales and marketing will always beat the builder with a superior product. Why? It’s the principle of the chicken and the egg.
While you need the egg to house the chicken, it’s the chicken that’s walking around making noise and getting things done.
In home building, the chicken is the marketing end of your company. It’s the “meat,” the crucial part of the organization that brings in buyers for your “eggs.” You need both components to be successful.
Too many builders forget that. They build spec homes with the mindset that they will sell them at whatever cost. They think that their reputation … web site … or word-of-mouth advertising … will bring in enough buyers. It won’t.
Instead of beefing up their sales and marketing and holding the line on pricing, they end up with a community full of unsold houses. Or they sell the homes, but don’t generate a profit. What good is that?
Building and selling a lot of homes doesn’t make some builders more successful than others. It just means they hammered more nails…nails that could be holding down profitability.
Keep your focus. Remember, you have two sides to your business. Neglect the chicken, and you could end up laying an egg.