Leak #23: Missing the Manufacturing Excesses – Leaking Profits: Article 26

A homebuilder really has two separate businesses: the manufacture of the homes and the sales operation. We’ve covered 22 ways to plug up leaks in the sales bucket, but we can’t overlook the other side of the business—because while you’re busily fixing the holes on the sales end, your profits might be escaping through your manufacturing gaps. The following manufacturing gaps are sales related:

Standing inventory (see #19)

Change orders

Mistakes in the field

Giveaways and cave-ins

Punch

Managing expectations

Relationships versus accountability to vendors and subcontractors

Principle of 15 Minutes

BOTTOM LINE: Your business is comprised of two operations: manufacturing and sales. Be sure to fix the leaks on both sides.

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