Most builders — especially small firms — manage key aspects of their daily operation using the fragile database of their own memory instead of a strategic plan. But Nelson points out that this is no way to ensure profitability. Systems don't just pop out of thin air; they evolve from a company vision. For most custom builders, that means making a major change: acting instead of reacting.

Without a clear vision of where your company is headed and a strategic plan outlining in writing how to achieve that vision, small problems become crises. Operate without these tools and your company's future rests on uncertain ground.

"Only about 15 percent of builders have a bona fide strategic plan," notes Ron Huntington, a consultant and author with Executive Mentors & Trainers of Seattle. "But those who do are in better shape to manage and steward their business."

Not only does a plan help builders survive, it allows them to thrive in times of what he calls OPM — other people's misery.

"One of the key aspects of a strategic plan is taking advantage of down times," he notes. "When land is suddenly available, you have cash on hand. You're the hero. [A plan] allows you to take a balanced approach to risk."

"You may have heard the expression, 'Bulls make money; bears make money — but pigs often get slaughtered,'" Huntington says. "That's true of builders as well."

He notes that the market chill settling over new housing has been most devastating to companies that lack a plan for adversity.

"A lot of these small businesses did not know how to deal with the rapid growth we've had in recent years. Many have bet the farm and overextended. But in the last 12 to 18 months, they've fallen prey to consumer reserve."

These builders are now caught in a perilous position, with excessive inventory and bloated labor costs. Hindsight may be 20/20, but Huntington says the impact of lack of planning was easy to predict.

"Those that had a strategic plan in place have included contingencies," he notes. Unlike their less-prepared peers, they're not stunned into paralysis the minute [downturns] arrive."

Strategic plans deal with the "now" as well as the future.

"The reality is that in most businesses," he says. "You can only control two time frames: the next 90 days and where you want to be at the end of the year. Everything else is speculative. Chances are that things won't shift so dramatically that you can't make a course correction to meet your annual goals. At the same time, you should be looking out three to five years and developing your plan toward those goals."

Even very small building firms, Huntington adds, gain from having a plan. Employees can use the company's long-term goals as a rallying point — a way to keep everybody aligned and focused on the same priorities. Determining that goal is key to understanding the framework of your strategic plan.

"One of the key questions you'll have to ask is: 'Am I in a growth business or a lifestyle business?' If you answer the latter, your planning should reflect a more moderate pace. We're running into this scenario more and more. Builders have been working very hard, trying to take advantage of the good times to put some extra (income) away. They've sacrificed a lot, and now they're looking for a way to find balance again."

If technophobia is one of the reasons you've put off strategic planning, rest easy, Huntington says. A good plan focuses on communication — not the gadgets you use to make it happen. Your information exchanges can be low-tech, as long as everyone understands the "rhythms" of communication outlined in the plan.

"For example," he says, "do you have a regular get together where you go through a set agenda rather than constantly interrupting each other all day long?"

If goals are clear, superintendents and other staffers may not need handheld PDAs and other gadgets.

"If you have an effective communication rhythm, you only need about seven to 12 minutes a day and one 30-minute meeting each week to keep things running smoothly."

A builder without a plan, Huntington says, is "reacting constantly," rather than taking control of his future.

He notes that it's easy to spot the builders who "get it." You can find them, for example, sharing secrets with their Builder 20 partners. And they have something many entrepreneurs lack — a willingness to self-reflect — to ask basic questions about where the company is going.

"My thinking is 'Why not?'" says Huntington. "If a plan gives you any edge at all, that's enough. All you need is a reasonable edge over other companies in your market."