Defend Your Turf

By Bob Sperber, Senior Editor
January 1, 2005
Professional Builder

Smaller builders voice justifiable concerns that GIANTS will buy higher and drive up land costs in an effort to churn ever-more product and keep the cash flowing. Here are a few tips to stay in the game:

• Leverage your assets with option arrangements or partners and look at value/profit opportunities, not costs. Profitability does not depend on volume growth.
• Buy already-entitled lots from a larger master-plan developer-builder.
• Partner with other builders for greater synergy and architectural control of multi-lot projects.
• Nurture relationships with all business partners, including local officials, realtors and bankers.
• Formalize "sell us land" programs, from your business processes to direct marketing and Web promotions for collecting leads.
• Go where the big guys won't. Larger builders need larger parcels, so seek unique spots too small to interest them.
• Capitalize on your local roots and reputation with community outreach, and preempt even as the larger builders — often local builders acquired by nationals — do the same.
• Be more flexible. The big guys have more layers of bureaucracy than small builders whose knowledge and experience can slash research time and cost.