Newsletter  

October 25, 2006   

Focus On: Financial and Operational Analysis

In life, we can't afford to sweat the small stuff. But in business, it's all small stuff. Delays, rework, waste... as sales growth slows and material costs climb, targeting small inefficiencies is crucial to maintaining profits.

Knowing how others are succeeding is a great first step. On the right, you'll find symptoms that indicate when a company's spending is out of synch with their peers. We've also included some advice on the rising supply cost issue that we're all facing. Unify International has spent years compiling benchmark data on a local, regional and national basis to help you spend smartly and reduce costs.

The articles below are prime examples of "sweating the small stuff". Understanding trends, and their impact on your business, is critical to your success.

I hope you find the enclosed tips and articles helpful. Please visit our website or call us for more information.

Best Regards,
Steve McGee
President
Unify International

  

Fast Facts

 

5 Symptoms of Budget Trouble

1. Land costs exceed 20% of home sale price

2. Hard building costs total more than 50%

3. Sales costs higher than 6%

4. High land costs driving prices, diminishing customer perception of value

5. Pre-tax profit per house less than 12.5%,
house after house, year after year

 

Supply Costs on the Rise

In the past 12 months, construction costs have risen 13.2%, and they’re expected to rise an additional 17.5 to 19% in the coming year. Supply and demand are out of balance: China’s need for cement alone in the next year exceeds the entire world’s supply.

What to do? Look to:

• Alliances for greater buying power

• Alternate and green building materials

• Careful wording of contracts, including caps on escalation clauses, to share rising costs

 

Case Study

Related Links

Consumer Prices, Construction Starts Supply Good News
September construction starts were up 5.9% from August, surprising analysts. Coupled with falling fuel prices that caused a drop in consumer prices, this is encouraging news for builders and trades, as the Federal Reserve watches closely.

Inflation Fears and Housing
A differing take on inflation, consumer prices, root causes and effects on the housing market.

Predicting Trends and Economic Cycles
The housing market is cyclical by nature. Builders can best capitalize on trends by anticipating and understanding them. Tips from Steve McGee, videotaped by Big Builder at a recent presentation.

  

Through Unify's financial and operational analysis, a $100M builder grew net profits from 2% to 8%. Due to a new management process and team to oversee the expanding operation, the company revenues had experienced explosive growth to over $400 million in four years.

 

Survey

 

What are the areas you're targeting to reduce inefficiencies? What's causing you the most concern? Take our 5-minute survey, and watch for results in a future newsletter.

Unify International 1450 North Tustin Avenue Suite 110 Santa Ana, CA 92705 • 877.972.4990 • www.unifyinternational.com


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