There are only two ways to boost your bottom line: increase revenue and cut costs. In this blog, we’ll explore innovative ways for builders to cut costs in order to increase homebuilder profit margins – and we’ll examine revenue enhancement in a future post.
Long-Term Pricing Agreements
“Locking in building product prices for a specified period is often more important than getting the ‘best’ price,” says Bob Whitten, CEO of SMA Consulting in Orlando, Florida. “It’s very smart to take the long-term view. Just tell your dealer, ‘I’ll pay you a little more if you can lock in the price for an extended period.’ They’re usually happy to make that arrangement, and it saves money over the long haul.”
Cost Savings Through Design & Materials
Dennis Shriver, owner of Hearthside Homes in Kansas City, recently used engineered wood vertical siding to cut costs and speed installation on a 22-home project. Because the home designs featured exterior walls higher than 12 feet, there would have been a visible seam where 12 ft. siding panels met. This would have required the crew to build something down in the peak of the gable to create a shorter length or come up with an alternative to hide the seams.
Shriver chose 16 ft. vertical siding, which eliminated the seams and saved time and money on the installation. “Instead of finding ways to disguise the seam, my crew was able to simply apply one piece, cut to length and go,” he says.
Builders can also enjoy significant savings by using materials that reduce installation steps and don’t require special tools or equipment in order to help drive construction profitability. For example, there are now air & water barrier systems that install in one step, eliminating the cost and delay of bringing in a specialty crew the next day to apply house wrap.
One key to construction cost-cutting is to choose high-performance products that make installation simpler and less expensive.
While LP® SmartSide® Trim & Siding is easier to install, builders may feel pressured to skip a second look at installation guidelines in order to get a project complete on time or makeup for labor shortages. However, whether you’re a new or longtime LP SmartSide Trim & Siding user, taking the time to be attentive to proper installation will ensure you are upholding your product warranty and avoiding potential issues down the road.Continue Reading
Performance is written into everything we do at LP Building Solutions. This goes beyond the way our team members do their jobs, how we manufacture our products and the drive to deliver building solutions. We also watch, measure and steward our environmental performance. Sustainable sourcing and energy efficiency are just two ways we act as stewards of our environmental performance, but recently Ducks Unlimited Canada (DUC) and LP signed a landmark conservation agreement to support 6.2 million acres in Manitoba’s boreal forest. This agreement is the culmination of an 18-year partnership between the two organizations that was jointly released in January 2020.
The homebuilding industry is always changing, thanks to housing trends, shifts in buyer preferences, new technologies and even finance options. We recently sat down with Brad Southern, CEO of LP Building Solutions, and Mike Sims, LP’s SVP of Marketing and Business Development, to discuss the latest industry developments.
Many construction companies and remodelers have been sorely challenged by the shortage of skilled laborers. As more companies struggle to find good workers and juggle projects, many are thirsty for strategies that promise to trim time.