NKB March 2016 by Building Industry Association Northern Kentucky

NORTHERN KENTUCKY

March 2016

The Official Publication of the Home Builders Association of Northern Kentucky

HBA Monthly Signature Event Hosted by the Land Development Council Energy and Environment Cabinet Secretary Charles Snavely Thursday April 21 - 4:00pm at the Metropolitan Club www.HomeBuildersNKY.com www.facebook.com/HBANKY

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for your commercial needS call uS firSt

BoB wheeler, commercial SaleS manager BoB.wheeler@jeffwyler.com ph. 859-525-8001 / c. 513-728-9174 1154 Burlington pike, florence, ky 41042

www.jeffwylerflorenceBuickgmc.com www.wyler.com

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The mission of the Home Builders Association of Northern Kentucky is to promote and enhance the integrity and visibility of the construction industry and the members of the organization through advocacy, communication, education and political action. Northern Kentucky Builder™ is an official publication of the Home Builders Association of Northern Kentucky, 2751 Circleport Drive, Erlanger, Kentucky 41018. It is published in the interest of the Northern Kentucky building industry and read by home builders, remodelers, general contractors, developers, engineers, bankers, Realtors,® architects, material dealers, subcontractors and manufacturers. All rights reserved. Copying or reproduction without the expressed permission of the Home Builders Association of Northern Kentucky is strictly prohibited. phone 859.331.9500 or fax 859.578.3393 email homebuilders@hbanky.com 2016 Board of Directors Tom Spille, President Jason Yeager, Immediate Past President Bill Cullen, Vice President Mike Conklin, Secretary/Treasurer Jim Frey, Associate President Pat Parshall, Associate Vice President John Toebben, Land Development Council President Nick Smith, Sales & Marketing Council President Michael Gray, Builder Director John Curtin, Builder Director Watson Jones, Associate Director Steve Brunson, Associate Director Brian Schalk, Associate Director Dave Hensley, Associate Director HBA Staff Brian A. Miller, Executive Vice President Melanie Meyer, Director of Shows & Events Jane Dvorak, Director of Sales & Marketing Shawn Cox, Director of Professional Development Dan Smith, Director of Finance Lea Amburgey, Administrative Coordinator Tammy Gorby, Director of Membership Editors Brian Miller Jane Dvorak Writing Stacy Smith Rogers Staff The Home Builders Association of Northern Kentucky is open to the world, visit our web site for up-to-date information on HBA services and programs, including extensive public referral directory to Registered Builders, Registered Remodelers and Associate Members.

March 2016

INSIDE THIS EDITION... 4 ............................................................. Letter from Brian Miller 5..............................................Around the HBA / Member Update 5....................................Land Development Council Annual Event 6.................................................. The Price is Right! - TTN 2016! 11.................Marketing Your Newly Built Home in Today’s Market 14............................................. 10th Annual Builder Realtor Bash 16.......... 3 Community Amenities Topping Home Buyer Wish Lists 19....................................................................... Millennium Club 19.....................The Enzweiler Building Institute 2016 Graduation 20.....................................................SMC Preview Party Wrap Up 24....................................................... Are You Charging Enough? 26......................................... Northern Kentucky Building Permits 27................................................................... Calendar of Events

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www.HomeBuildersNKY.com 3/2016

Northern Kentucky BUILDER

FROM THE EXECUTIVE VICE PRESIDENT

Reflections on the International Builder’ Show One thing that was easily noticeable at IBS this year was the massive amount of people attending the show. A few years ago we collocated our show with the Kitchen and Bath Industry Show and Surface, the flooring industry show. This resulted in over 110,000 people attending the show this year, as reported by NAHB. Several of your members involved in governance at NAHB go early every year to help shape your national association. We thank Mike Kegley, The B.O.L.D. Company, your National Area Chair for his involvement in our federation. Individuals like Mike head out practically a week ahead of the show’s open to represent you on the National level.

headed in on Saturday, a few days early, to participate in the Executive Officers Council’s meetings. I am a regional director on the EOC’s Board of Directors and Chair the Professional Development Committee for the EOC. While those positions are important to the EOC we also gain valuable knowledge as we network with one another and learn what each other across the country are experimenting with and finding success in their results. The concept of “Make No Small Plans” from a session last fall resulted in your leadership creating monthly events that are already yielding success. The first example was February’s Membership Kick Off event at New Riff Distillery, which sold out a week prior to the event. As Chair of the Professional Development Committee my fellow EO’s on the committee took on the task of onboarding new EO’s over a year ago as part of then NAHB Chairman Kelly’s work plan to address the massive turnover within our ranks. What we thought would be an intensive first year of onboarding has resulted in even more work in 2015 and continues to prove daunting in 2016. When we began mentoring and onboarding new EO’s in 2014 we addressed 94 new EO’s that were hired at associations across the country. We were shocked and surprised to see the need to address 108 new EO’s in 2015. In an analysis of the new EO’s we found that in 2014-early 2015 mid-sized and larger HBA’s had hired new EO’s as a larger portion of the overall turnover. In the last 8 months more than 2/3 of the new EO’s are coming in from smaller HBA’s; under 200 members. While no data exists to know their HBA’s situation prior to them being hired we are estimating that many smaller HBA’s have had practically no staff during the recession and are just now in a position to employ an Executive. There were many new faces at the EOC meetings; younger faces. There were also many old friends that we are saying goodbye to as they are drawing their careers to a close. I saw Toy Wood, retiring from Houston, Sam Anderson, retired from Seattle, earlier Pat Sullivan, retired from St. Louis, and most of all had the chance to celebrate Chuck Kavanaugh’s retirement from Louisville. I worked for Chuck for 11 years prior to being hired here. He has been a boss, mentor and lifelong friend to not only me but my family. We will miss him dearly at the EOC. 4

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The recession gutted many HBA’s that were harder hit than our and many EO’s that would now be in their 50’s are gone; practically all of them. So now us folks in our mid 40’s are the older folks all of the sudden; something I had not planned on happening for 10 years. As a result, these new EO’s are seeking our advice, input and comfort far earlier than we had imagined. There is good news to address this issue. The leaders of the EOC are working with NAHB’s Senior Officers to create the Association Management Conference; an event purposed built to address the needs of all EO’s be them newer or more seasoned. Look for more information on this potential conference as our Professional Development Committee will be highly involved in creating the education tracks for what should be an outstanding opportunity in 2017. New products and solutions blanketed the floor and education spaces with new and younger faces everywhere. It was good to see younger, newer and impassioned members from across the country gathered in one city to learn, see and discover. What I did not notice were these faces involved in NAHB governance. NAHB does some amazing work. They represent you on Capitol Hill, engage every federal agency that affect your business and offers you the opportunity at the highest level to give back to your industry. I would encourage you to get involved with NAHB. You can login to their website to see the committees they have to offer you. The 2017 International ibs 2016 Builder’s Show will be in Orlando, discover the building universe Florida from January 10-12. Prior to that meeting is NAHB’s MidYear meeting in Miami, Florida from August 8-11. Check them out. We encourage you to attend Improve your busIness In just 3 days at Ibs 2016! and get involved. january 19-21

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MEMBERSHIP Your Peace of Mind Deserves a Professional

For more info on why you should only use a member of the Home Builders Association of Northern Kentucky when it is time for a decision about your home call 859.331.9500 or visit www.homebuildersnky.com.

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“Where Quality and Service Save You Time and Money” Florence, Kentucky 139 Aristocrat Dr. (859) 371-3314 Aurora, Indiana 10513 Morgans Branch Rd. (812) 926-0920 Wilder, Kentucky 108 Williams Way (859) 572-9951 Harrison, Ohio 7466 New Haven Rd. (513) 738-1933 Port Union, Ohio 5259 Rialto Road (513) 860-5111

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Make Plans to Attend the Land Development Council Annual Event

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oin fellow HBA members on Thursday April 21 at 4:00pm at the Metropolitan Club in Covington to hear form Charles Snavely, the Commonwealth’s new Secretary of the Energy and Environment Cabinet. The cost to attend is $15 and will include two drinks and heavy appetizers. Charles G. Snavely was appointed by Gov. Matt Bevin as Secretary of the Kentucky Energy and Environment Cabinet in December 2015. Mr. Snavely is a graduate of Virginia Polytechnic Institute and State University with a B.S. in Mining Engineering and has recently completed the Executive MBA Program through a joint program of the University of Kentucky and the University of Louisville. Mr. Snavely retired from the mining industry after more than 35 years, having served as a mine engineer and later president of several large coal companies in southeast Kentucky. He most recently was Executive Vice President of Operations for International Coal Group and President of Eastern Operations for Arch Coal, Inc. He is past chairman of the Board of Directors of the Kentucky Coal Association. He has received the Distinguished Alumnus Award from the Virginia Tech Department of Mining Engineering.

Milestone Members These members have reached a milestone in their membership with their renewals in February. Congratulations and remember, do business with a member!

Five Years Dickey’s Glass

Fifteen Years Barnes, Dennig & Co., Ltd Fields Welding, Inc Gray Construction Kenmark Hardwood Floors Inc.

Ten Years Hermes Construction Co RJ Homes, LLC

Thirty Years A E Door & Window Co Ron Johns Construction

One Year Reliable Excavation & Digging

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DO BUSINESS WITH A MEMBER

For a list of current members of the Home Builders Association of Northern Kentucky call 859.331.9500, download the HBAâ&#x20AC;&#x2122;s APP or visit www.homebuildersnky.com.

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Tired of Craigslist and Monster? The answer is right under your nose! The Enzweiler Apprentice Training and Trade School has graduates and current students who want to help your business compete and grow! As the oldest trade school in continual operation in Kentucky, The Enzweiler Apprentice Training and Trade school has graduated thousands of individuals who now help shape the economy of Northern Kentucky. With a 95% job placement rate and more than 75% job retention after apprenticeship, our graduates are an outstanding addition to any company, large or small! Call today to find skilled labor to help your business grow and prosper! Contact Shawn Cox, Director of Professional Development (859) 331-9500 x19

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2016 WOMEN BUILD… YES WE CAN Women Build is a Habitat for Humanity program that empowers women to build homes, lives, hope and communities and creates new connections and lifelong bonds Building will start around Mother’s Day 2016 and be completed by December 2016 – everyone is invited to attend Kick-Off ceremonies at the beginning of our builds and the Dedication celebrations once the homes are complete We are building three homes this year, side-by-side, located at 2465, 2475, 2489 Wilson Avenue in Colerain Township, Hamilton County (home model pictured below) Please join us for our 2016 Women Build Project. We need to raise $300,000 ($100,000 for each home) to fund these homes. There are numerous opportunities to sponsor fundraising and volunteer - we can do this – with your help. Help us celebrate 30 years of changing lives through homeownership! Get Involved! Visit our website: www.habitatcincinnati.org or contact Tricia Sunders, Corporate Relations Coordinator, at: tricia.sunders@habitatcincinnati.org or (513) 482-5612

Wilson Construction Model • 3 Bedroom • 1 Story • 1020 Square Feet • 1.5 Bath • Full Basement • Energy Efficient

Marketing Your Newly Built Home in Today’s Market By Stacy Smith Rogers

Even as the market improves, it’s important for home builders to get creative and aggressive when it comes to marketing their product to potential buyers. Whether you’re in a position to build now and sell later or if you’re targeting customers before the ground is broken, there are many things to consider to attract today’s buyers. There’s one thing that remains on the top on the checklist for getting the best price and quickest turnaround on home building – GET YOUR PRODUCT SEEN BY AS MANY PEOPLE AS POSSIBLE! Get Creative With Your Marketing Outreach 6 ways to increase awareness of your unique building product 1. Consider a creatively planned open house of one of your newly finished homes (with the owner’s permission). Offer a personalized tour of the home to a specific group of folks in the industry that can help your cause: Realtors, mortgage lenders and others who come in contact with prospective buyers in your target market. Serve some yummy food during the lunch hour or offer it at a convenient time when people are coming or

going to work. 2. Get quality photos and videos uploaded on your website and send links to all your professional contacts regularly with copy that will make it worth their time to view – i.e., “Check out our new kitchen design that takes a new approach to the standard pantry and storage space.” or “We’re thrilled with the master bath design that features heated floors and a coffee bar.” The point is to grab their attention about your capabilities as a builder even if this home is already sold. 3. Make sure you’re part of the home showcase events offered through HBANKY, whether that’s as a participant or sponsor. 4. Use social media as a marketing tool and engage in asking your audience questions on a regular basis. Consider assigning or hiring someone to handle your company blog, Facebook, Instagram or Houzz account. 5. Attend HBANKY networking events. Your most effective advocates are likely fellow association members who recognize your support of the industry. 6. Consider investing in a digital marketing plan that will reach targeted consumers. (See Jane Dvorak at HBANKY for more info on how to do that through the association.) Understand Your Buyers Today’s buyers are doing their research, most of which is online. Keep up-to-date on current market trends by doing your own research. (That’s another area where the fellow

HBANKY member relationships comes into play.) Find out what’s resonating with local buyers and what motivates them to sign on the dotted line. Keep up with how competing homes are priced and make sure you offer something that makes your product stand out. Foster the Builder/Realtor Relationship The days of “if you build it, they will come” are certainly over, so it’s important to use trusted resources that will get your home or home building skills noticed by an audience that’s in a position to act. The best source for that is a Realtor who is connected within the community and is as eager to get that home sold as quickly as you are. The important thing to note, however, is that we’re not just talking about the one home that’s ready to sell or already in the works. We’re talking about the ones in the backs of potential homebuyers’ minds, now and in the future. The importance of fostering the builder/Realtor connection can’t be emphasized enough. When a Realtor knows your product well, he/she will keep it top-of-mind when encountering future buyers. In a perfect world, he or she will show up on your doorstep with a happy couple ready to sign a contract to build their dream home. In the real world, he or she might connect with you on how to partner together to market your product and save you the headache of finding interested buyers and let you focus on what you do best – building homes. 3/2016

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Does landscaping make a big difference? What about staging? Lighting? What creative strategies do I need to consider to get to the closing table?

TIPS FROM SMC MEMBERS If you’re marketing a newly built home in today’s market, it’s likely you’re asking many questions. Why not take those questions to the experts who encounter today’s buyers on a daily basis? You don’t have to go far to seek guidance. Chances are, you’ve brushed shoulders or traded cards with them at a HBANKY event. The association’s Sales & Marketing Council (SMC) is comprised of professionals who are dedicated to promoting the new home building industry and are in the trenches, connecting with potential homebuyers on a regular basis. So why not pick up the phone and see if they can help? In the meantime, consider some tips from these SMC members... What are buyers paying attention to as they tour new homes? Melanie Millson, The Drees Company “Buyers want functionality and flexibility. The majority of my customers What do you think are important things are looking for an open floor plan that is family friendly and offers plenty for sellers to keep in mind as they prepare to of room for entertaining. I’m not talking huge Super Bowl parties, just market a newly built home? “You need to get engaged before it’s time to sell. big enough to host large family gatherings. Kitchens are big for everyone, even people who don’t claim to enjoy cooking. They know that it’s a You’ve got to win someone’s trust before you’re ready to sell them something. Participating in central landing place of the home and they want the gourmet look and high end appliances. Mud rooms are huge as are home offices with so community activities and demonstrating you’re many people working from home. I recommend keeping those top-ofa good ambassador for the area is one way. Being responsive is key and following up, whether that’s with a potential buyer mind when you’re marketing your home. When you’ve got their attention, coming to you or an agent at a particular office. We’re seeing a lot of younger it’s important to emphasize the efficiency of the home as well. Introduce buyers now and they have a different level of expectation than traditional your energy efficiency advantages from a big picture perspective first. Tell buyers, especially when it comes to communication. We need to be very them how much better their home is going to perform than the one they are currently living in, then zero in on the specifics, such as windows, aware of that. Many of them were likely in college in 2008 and may have seen the struggles their parents went through. They’re very decisive. I think insulation, and the efficiency of the HVAC system. Market the total efficiency of the home, then break down the components.” the key is to listen and be responsive. When it comes to homes, people are really paying a lot of attention to community. So, I would consider where you are building first thing and use that to your advantage. Often, a buyer is sold on the community before they even think about a floor plan.” 12

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Tom Bolger, Huntington Mortgage Are there creative ways builders/sellers of newly built homes can work with mortgage lenders to make a home more appealing to buyers? Depending on the price point and location of the builders’ communities, a builder should partner with a lender that offers and will help them market products and programs attractive to their target audience. For an entry level or more rural builder these could include Kentucky Housing Corporation loans with integrated Down Payment Assistance Programs (DAPs), Welcome Home Funds from the Federal Home Loan Bank of Cincinnati that are offered each spring at the start of the buying season, USDA/Rural Housing loans, and of course FHA and VA loans. Higher-end builders can promote programs such as Huntington Bank’s “Doctors Only” loans that offer 100 percent financing with no PMI at very attractive rates and features underwriting enhancements that are especially attractive to doctors who are early in their careers.

What can builders do to increase the chances of a deal going through on time and without delay? Open and consistent communication between all parties will help avoid delays. Clear and timely communication of items such as changes to the price of the home, changes to the completion timeline of the home (sooner or later) can in many cases help avoid delays to the closing. Today’s buyers are much different than those before the downturn in the market. Successful builders have likely changed many things about how (and what) they communicate to potential buyers. To stay up-to-date on the current buying trends in the local market, consider attending an upcoming HBANKY event and connect with an SMC member!

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Northern Kentucky BUILDER

SMC hosts 10th Annual Builder Realtor Bash The SMC hosts the 10th Annual Builder Realtor Bash at Northern Kentucky Association of REALTORS速 Education Center. The center is located at 7660 Turfway Road, Suite 100, Florence, Kentucky. Join in this incredible business building opportunity on Thursday, April 21st from 4 to 7 pm. This popular event brings together builders and mortgage companies with area realtors. This would be considered a match made in heaven. Watch for booth details coming soon to your email. Thank you to our Silver Sponsor: L & N Federal Credit Union. Title, Gold and Silver sponsorships are available. Contact Jane Dvorak at 859-331-9500 or janed@hbanky.com for details.

Northern Kentucky BUILDER

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NOTES

3 Community Amenities Topping Home Buyer Wish Lists

ome-buyer preferences constantly evolve, making it a challenge to stay up to date on who wants what. Luckily, the majority of buyers – regardless of age – are looking for the same features in a community. One of NAHB’s latest studies shows which community amenities are the most sought after. The study, Housing Preferences of the Baby Boomer Generation, captures the opinions of more than 4,300 prospective home buyers and compares the wants of Boomers (born between 1946 and 1964) to those of seniors (born before 1946), GenXers (born 1965 to 1979), and Millennials (born after 1979). Though the priority rankings vary slightly between generations, the results of the study reveal these different age groups actually have very similar tastes. Among the top four most-wanted amenities, three were the same for every age group: They all desire to live in a community that’s typically suburban, with close proximity to a park area, and that has access to walking/jogging trails. All of the groups – except Millennials – ranked being located near retail space in their top four. Millennials, instead, chose playgrounds 16

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as their fourth-most-wanted community amenity. (Gen-Xers ranked playgrounds at No. 8.) The other most desirable community amenities listed by all of the age groups included: a swimming pool, lake and exercise room. When comparing the groups’ lists of their top eight amenities, only two items varied: • Playgrounds – not surprisingly, these have minimal significance to the majority of seniors and boomers. • Outdoor maintenance service – apparently, not very popular among either of the younger two generations. In addition to community amenities, the survey covered many other items, including preferences in home size, layout, features, technology and environmental impact. It also looked at preferences in street design.

53 Annual Golf Outing

Tuesday, June 7, 2016

Sponsored by

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12:00 pm Shotgun Start @ Summit Hills Country Club 36 Dudley Road, Crestview Hills, KY Contact Jane at 859-331-9500 for Sponsorship Opportunities

Only $150 Per Golfer, Sign Up Now - 144 Player Maximum Call 859-331-9500 or Stop by the HBA... No Faxes or Emails

VISA/MAstercard or other payment required with reservation. Credit Card will be charged if payment in fiull is not received on or before May 6th.

3/2016

Northern Kentucky BUILDER

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WE FOCUS ON THE INSURANCE AND FINANCIAL NEEDS OF YOUR BUILDING INDUSTRY LLH has been providing insurance and financial services to Kentucky’s building industry for over 50 years. Today, with all the challenges your business faces, it’s a good time to talk with us to create a plan that will put your company’s insurance, benefits and wealth management programs in order.

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2016

MILLENNIUM CLUB All-Rite Ready Mix Arlinghaus Builders Ash Insurance, C.K. Barnes Dennig & Co., Ltd Boone Ready Mix, Inc. Bray Trucking. Inc. Budget Blinds and Tailored Living Cincinnati Closets LLC. Cutter Construction Drees Company Dudley Construction Co., Inc.

The Enzweiler Building Institute will hold its 2016 graduation on Thursday the 14th of April at the HBA Events Center. Commencement will begin at 6 pm with a guest speaker and then the presentation of certificates to our graduates. Show your support for our graduates, enjoy a catered meal and be among the first to meet and congratulate the newest additions to our workforce. Please RSVP at (859) 331- 9500 with reservations or if your company would like to be a sponsor for this yearâ&#x20AC;&#x2122;s graduation.

Ernst Concrete Fischer Homes Florida Tile Forcht Bank Granite & Quartz Wholesale Grant County/Gallatin County Concrete Hummel Hatfield Insurance Janell Concrete & Masonry Equipment, Inc. Kelly Bros. Home & Design Center Kentucky Federal Savings & Loan Kentucky FluidAir, Inc. L & N Federal Credit Union Logan Lavelle Hunt M & W Excavation Co. Inc. Nisbet Brower Sims-Lohman Tri- City Insurance Service, Inc. Valley View Temporary Furnished Living VonLehman & Company, Inc. Wiseway Supply The Millennium Club is an elite group of companies whose contributions pay for the refreshments and entertainment at events like the Annual Golf Outing, Tabletop Night, Elk Creek Outing and the Holiday Party. 3/2016

Northern Kentucky BUILDER

SALES & MARKETING COUNCIL SMC PREVIEW PARTY WRAP UP

he Sales & Marketing Council recently held a Preview Party for the Annual SAM Awards. Realtors which were eligible to enter the sales category awards were invited to attend. According to Nick Smith, SMC President, attendance was the best he has seen. Attendees represented the top 3% of sales agents in Northern Kentucky. The SAM Awards will be held on March 18 at the Radisson Cincinnati Riverfront from 11 am to 2 pm. Thank you to the Sponsors - Drees Homes, Huntington Bank Mortgage, Northwest Title, Roeding Insurance, Stockton Mortgage and Victory Mortgage.

Plenty of food, drink, and talk about the upcoming SAM Awards made for a good time.

Dan Scherff, Roeding Insurance; Melanie Millson, Drees Homes & SMC Vice President; and Jennifer Hennessey, Northwest Title

Nick Smith, Keller Williams & SMC President, and Michelle Dâ&#x20AC;&#x2122;Amico, Victory Mortgage

Thanks to our sponsors!

Michelle caldwell, Huntington Bank; Cindy Shetterly, Keller Williams; and John Lorms, RE/MAX Affiliates

Northern Kentucky BUILDER

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3168 CRESCENT AVENUE, ERLANGER, KY 41018 • www.RJINSULATIoN.Com

CRAFTSMANSHIP ONE OF THE MANY THINGS ON DISPLAY TO THE BUYING PUBLIC AND ONLY AT CALVACADE AND HOMEFEST

HBA MEMBERS, BE A PART OF IT. START PLANNING NOW FOR THE 2016 HOME SHOWS HBA’s Cavalcade of Homes! May 7-8, 14-15, 21-22

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CONTACT MELANIE MEYER AT THE HOME BUILDERS ASSOCIATION OF NORTHERN KENTUCKY FOR MORE INFO 859.331.9500 OR MELANIEM@HBANKY.COM

HOMEFEST at Crown Point

Presented by Florida Tile August 13-28 Participating Builders: Tim Burks, Gustin Construction, Drees, and Fischer vendor space and other opportunities available!

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LIST YOUR HOMES FOR FREE AT HBANKY.COM!

New homesource.com has partnered with the HBA to bring you free listings on our website at www.hbanky.com. Tap into the power of over 3,000 unique visitors a month on the HBA’s site. To see the builders already taking advantage of free listings go to newhomesource.com/hbanky. This service is provided to you as a member and managed by the staff at newhomesource.com.

Brian Jones

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Watson Jones

Contractors Insurance Specialist

Agent for HBA Workers Comp Program, up to 40% discounts available

3/2016

Northern Kentucky BUILDER

Are You Charging Enough?

Northern Kentucky BUILDER

3/2016

If you’re unsure about how much you should be charging for your services, you’re not alone. Pricing- and profit-focused educational sessions were among the most popular at the 2016 International Builders’ Show.

common question many builders said they (hate to) get from their clients is: “How much are you trying to make on this?” At that point, doubts about your markup may start to creep in. But the fundamentals to creating a successful pricing strategy – and subsequently larger profits – are quite simple, said Bob Peterson, CGR, CAPS, CGP, owner and founder ofAssociates in Building + Design in Fort Collins, Colo. It all starts by acknowledging that home building isn’t just a hobby for you. “You’re in this business to make money. Don’t be ashamed to admit to the client that you will be making a profit from the project,” Peterson said. “Sure, some of your competitors might try to undercut you, but many of them probably won’t be your competitors for long because that type of business model is less sustainable.” The unique skills of qualified builders have value, Peterson explained, so it’s up to you as the business owner to determine what those skills are worth. Peterson said to focus more on determining your own value – rather than letting your competition or industry standards define what you’re worth – and to be prepared to validate that worth by educating the client about what exactly you bring to the table. “I’ve known many builders throughout my career who frequently sell themselves short, even though they are talented professionals with unique skill sets,” said Daniel Aukeman, president of Aukeman Development Co. in Hudsonville, Mich. “They fear they’ll lose business to the [cheaper] competition, but by doing higher-quality work, they have a right to make a profit and deserve to be compensated accordingly.”

business-is-good budget, a break-even budget, and a we’re-in-trouble budget. (To determine your break-even point, divide your fixed costs by gross margin.) • Refine your client management skills. Sticker shock is increasingly common among clients who enjoy watching do-it-yourself and homeshopping shows. It takes great skill to bring some clients back to the reality of their current market and budget. Many will require extra help to realize they are the ones who may need to make compromises to stay within their budget, not you. • Don’t forget to pay yourself. With so many other expenses to pay for, you may sometimes overlook the fact that you’re the one taking on all of the risk. Paying yourself isn’t a luxury – it’s a necessity for the livelihood of your business. If you’re not a new business owner and you’re still not making enough to pay yourself, your pricing strategy needs further refinement. If you’re curious about what other builders like you are earning and how much you should be making, join NAHB for a free webinar called The Cost of Doing Business. Attendees will get an opportunity to better understand key metrics to accurately gauge the health of their business against the competition. The free webinar will be held on Tuesday, March 22, from 2-3 p.m. ET. Here’s the link to register - http://www.nahbclassic.org/form. aspx?formID=18700&_ga=1.219249881.1535110528.1455918159

After establishing the value of your work, Peterson suggests the following to determine how to reach your magic markup number: • Stop guessing on costs. Know your exact overhead. If the phones suddenly stop ringing, you need to know exactly how much it will cost to open your doors each day. Factor in all fixed, general and administrative costs, including rent, supplies, auto maintenance, phones, computers, marketing, training, and salaries (including yours). • Determine your minimum markup. Before you take on a project, know exactly how low you can go and still maintain a healthy gross profit margin. (Remember, there’s a difference between gross margin and net margin: Gross margin is the portion of revenue that remains after deducting the cost of goods sold, and does not include overheard. Net margin, rather, is the true percentage amount left over after all other costs and overhead have been paid, before taxes.) • Create a budget. Sounds simple, but for many, budgets seem more intimidating than scaling a high-rise condominium or wielding a 5,000-RPM circular saw. Experienced business owners can use history as their guide. New business owners, however, are better off seeking advice from a trusted peer who has industry experience, rather than from an accountant. Go a step further by creating three budgets: a 3/2016

Northern Kentucky BUILDER

DO BUSINESS WITH A MEMBER

NORTHERN KENTUCKY BUILDING PERMITS NOVEMBER ‘15

SINGLE FAMILY

MODULAR HOMES

MULTI FAMILY

CONDOS

COMMERCIAL

COMMERCIAL REMODELING

RESIDENTIAL REMODELING

BOONE

$3,127,894.00

$6,440,645.00

$1,399,962.00

CAMPBELL

$2,917,355.00

$216,443.00

KENTON

$966,123.00

$260,539.00

$2,423,613.00

GRANT

$138,000.00

MASON

TOTAL

$23,386,127

$145,000

$58,976

$50,000

108

$44,347,710

102

$3,915,033

NOVEMBER ‘14

SINGLE FAMILY

MODULAR HOMES

MULTI FAMILY

CONDOS

COMMERCIAL

COMMERCIAL REMODELING

RESIDENTIAL REMODELING

BOONE

$4,664,241.00

$3,474,000.00

$1,121,054.00

$871,595.00

CAMPBELL

$952,782.00

$742,000.00

$197,380.00

KENTON

$3,246,623.00

$1,000,000.00

$620,709.00

$718,371.00

GRANT

$310,000.00

MASON

TOTAL

$6,810,278

$999,630

$1,195,000

$27,841,376

$1,069,643

JAN-JAN 2015

$9,173,646

$1,742,000

$3,474,000

$1,741,763

$1,787,346

JAN-JAN 2014

$7,632,303

$972,510

$764,000

$20,184,691

$8,783,767

$1,068,326

Northern Kentucky BUILDER

3/2016

HBANKY BUSINESS MEETINGS AT A GLANCE. GO TO HBANKY.COM OR CALL 331-9500 FOR RESERVATIONS AND CONFIRM DATES

March - Get Involved 3

Remodelers Issues Committee Meeting, 12:00 PM - 1:00 PM at the HBA.

Sales and Marketing Council Board of Governors Meeting. Monthly meeting of the Sales and Marketing Council Board of Governors. Past SMC Presidents are encouraged to attend. 12:00 PM - 1:00 PM at the HBA.

Table Top Night, 5:30 PM - 8:00 PM at the Horseshoe Casino Cincinnati

Land Development Council Board of Governors. Monthly meeting of the Land Development Council Board of Governors. All Council Past Presidents are welcome and encouraged to attend this meeting. 10:30 AM - 12:00 PM at the HBA.

2015 SAM Awards, 11:00 AM - 2:00 PM at the Covington Radisson Hotel

Work Site General Safety Guidlines, presented by NKEMS, AGC/SIF Compliant Course, 10:00 AM - 12:00 PM at the HBA. ($50)

New Member Orientation, 12:00 PM - 1:00 PM at the HBA.

Good Friday - HBA Office Closed

State & Local Government/PAC Committee. The committee will discuss legislative issues and engage an elected or appointed official in dialogue over issues concerning the construction industry. All members are welcome to attend this meeting. 11:30 AM - 1:00 PM at the HBA.

Executive Committee at Northern Kentucky Chamber of Commerce. Monthly meeting of the Executive Committee. Only Executive Committee

members may attend this meeting. 2:30 PM - 4:00 PM at the HBA.

Board of Directors at Northern Kentucky Chamber of Commerce, Bi-Monthly Meeting of the Home Builders Association Board of Directors

Meeting. Past Presidents are welcome and encouraged to attend this meeting. 4:00 PM - 5:00 PM.

DO BUSINESS WITH A MEMBER For a list of current members of the Home Builders Association of Northern Kentucky call 859.331.9500, download the HBAâ&#x20AC;&#x2122;s APP or visit www.homebuildersnky.com.

April - A Look Ahead 7

Remodelers Issues Committee Meeting, 12:00 PM - 1:00 PM at the HBA.

Enzweiler BI Graduation, 5:30 PM - 8:00 PM at the HBA.

LDC Annual Event at the Metropolitan Club in Covington, 4:00 - 6:00 PM.

First Aid & Bloodborne Pathogens Class, presented by NKEMS, AGC/SIF compliant course, 2:00 PM - 4:00 PM at the HBA. ($50)

Executive Committee at Northern Kentucky Chamber of Commerce. Monthly meeting of the Executive Committee. Only Executive Committee

members may attend this meeting. 2:30 PM - 4:00 PM at the HBA.

RTH

ERN KENTUC

RTH

ERN KENTUC

RTH

ERN KENTUC

3/2016

Northern Kentucky BUILDER

PRSRT STD US POSTAGE NO

MEMBER RTH

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CINCINANTI OH PERMIT 5400

2751 Circleport Drive Erlanger, Kentucky 41018

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