It is past time to start your 2008 business plans! Don't just talk about the market, react to it!
In retrospect, I have just dubbed 2007 as the “Year of Knowledge Through Apathy”. Dictionary.com offers the following definition for apathy “lack of interest in or concern for things that others find moving or exciting”. Economists thrive on numbers and absorption rates and yet they typically are studying someone else’s business! I think many lenders, developers, builders and Realtors, now wish they had shown some of the economists more respect.
Unfortunately, many of the local builders and developers were a victim of their own success. For years, we prospered from the “Field of Dreams – build it and they will come” boom of the 1990’s through 2005 when it appeared that if you spent time doing a business plan and focus groups, you could have missed out on a few sales since even poor homes and quality still sold due to the veracious appetite for homes in the area.
The industry was selling product faster than ever before, so little effort was spent trying to figure out how to make it better yet. Established builders and their marketing partners (Realtors) didn’t bother to go to meetings to find out which subdivisions were being approved for next year adjacent to them, yet seemed surprised and upset if a large production builder comes to build it out. For example, this site just posted today that there were 20,786 preliminary platted lots in Ada County on the books. Think about the impact this will have on your business in 2008!
I am surprised that the mortgage industry gets all they hype about “sub-prime”; however, I can attest to a few “sub-prime agents”; “sub-prime builders”; sub-prime developments”, etc. The strength of the market kept them in the real estate business just like welfare keeps some obese unemployed people that way. Charles Darwin’s theory of “the survival of the fittest” obviously must have been based on long term trends without government intervention!
Some people think I am wasting time sitting here writing this blog in December, instead of out “selling” something. However, thanks to the power of the internet, I am positive some buyer somewhere is actually online looking at one of my listings as I do this in the comfort of my office planning for 2008. How can I be so sure, well because my website tracks my internet traffic so that I can spend my time focusing on what works, not just working. While writing this, one of my lenders called ironically to set a meeting for next week to compare business plans so we can be working toward the same objective.
I am fortunate that I learned a lot in my 5 years as an undergraduate marketing student at Boise State University. For example, I started college right out of high school in 1978 and yet my student number was already dated for 1979, looking ahead to when the school year would be ending. Think about it, Halloween stuff seems to go on sale around the 4th of July; Christmas stuff goes on sale even before Halloween is over; and automobile dealers have been selling their 2008 model year vehicles for two months already and it is still a month till 2008. Have you started working on your plan yet for 2008 and beyond or are you going to wait till after a long night of champagne and partying on New Years Eve to cloud your judgment as you make your resolutions on January 1?
I would be glad to sit down with any builders and developers to discuss in person their 2008 marketing plans! For the developers, we need to be looking at the 2009 market already since it takes up to a year to get a new community through the planning and zoning and entitlement process. We need to take a realistic look at absorption rates. Let’s take an objective review of at what your “product/service” is and how it can be “differentiated” from others in our local marketplace before you invest your money.
After all, isn’t that exactly what the consumers are doing as they decide if they want your product/service? Doesn’t it make sense to see the world through their eyes and see what they are looking for before you build/develop? I guess that is why some of the most brilliant people are referred to as Rocket Scientists; at least they know their object and plan the strategy and the vehicle to reach the destination!