You achieve Builder of Choice status when suppliers and trades want to work for you over all the other builders in your market. They will send the best crews and give you the best price. This can be worth 5 to 10 percent in lower costs compared to your competition. 

The best crews can take several days off a build schedule. If you become the Builder of Choice with your suppliers and trades, you can significantly lower your direct construction costs and decrease your cycle time. 

Efficiency Reigns Supreme

Selling the efficiency of your operation should be the first thing you talk about when you meet with a supplier or trade. By the end of that meeting, they should want to work with you over any of the other builders in your market.

I have spent a lot of time working with suppliers and trades trying to understand how to help lower builders’ costs. Dry runs are by far the biggest issue. Always have your site clean and ready on the scheduled date so they can complete their job. Every date scheduled on your site should be money in the bank to a trade.

Good, detailed plans and scopes of work are critical for trades to accurately bid and perform the task timely and profitably. Plans sometimes have errors. Make sure plan errors are addressed quickly and updated plans are reissued to the trades in a timely manner.

An efficient process will help trades do their job right the first time. Start orders, purchase orders, takeoffs, and selections need to be complete, accurate, and easy to understand. Orders should be sent out with plenty of lead time.

Master schedules help trades manage crews to meet your schedules. Make sure you allow them the proper lead time and the correct duration to complete the task. The use of master schedules streamlines the construction process, enhances coordination among project participants, and helps identify and address potential issues early, ultimately resulting in reduced cycle time.

Elevate Communication, Cultivate Collaboration

Trade portals are the preferred communication method. All the information trades need should be available on your portal. If you have a portal, consider hosting a meeting and teach trades how to use it. Let them know what information is available and when you post updates. Make sure the right people in their operation have the appropriate access.

Back charges are sometimes necessary. Make sure trades know the details in advance. The best method is to create the team atmosphere on site. I like to make sure everybody knows everybody on site to increase the odds that they work well together. A pre-construction meeting with the crews can help.

Become the Builder of Choice

Believe it or not, pay can come at the bottom of the list of priorities for a trade contractor. I have heard from trades about builders who pay every week, but the trade can never complete the job so he can’t get paid. That’s why everything we just reviewed is so important. Pay process and cycle should be detailed in your contract. Make sure trades and suppliers know the submittal process so you are not wasting time for either party.

An important step in the negotiation process is convincing your suppliers and trades — who include builder inefficiencies in their cost of doing business — that you are the Builder of Choice. Then, you need to show the benefit of your efficient operation and demonstrate that working with you means they can take those costs out of the bid. If you truly are a Builder of Choice, they will make more money on your site with lower pricing.

We Are Here to Help

Our team of industry experts can help you become the Builder of Choice in your market. Our consulting and coaching packages are a cost-effective way for home builders to identify areas for improvement and discover innovative strategies to maximize performance and profitability. Contact us at 303-972-7666 or for more information.

For additional insights on becoming the Builder of Choice, listen to our Be the Builder of Choice podcast series on Spotify (or your favorite podcast platform).

Ed Hauck is a senior consultant at Shinn Group. He specializes in helping builders around the country reduce direct construction cost, streamline operations, and guide new product design towards efficiency and cost control.