Thursday, July 25, 2019

Is Becoming an Independent Modular Home Builder Simply Too Hard to Do?

Becoming an entrepreneur is a dream a lot of people have especially after getting passed over for a promotion or being laid off from their job.

However not many actually take the next necessary steps to realize that dream.

One profession that sees fewer people wanting to enter is that of becoming a new home builder. There are so many financial and legal hurdles to jump over that a lot of people settle for simply much easier businesses to open like a Second Hand store or a Food Truck.

Today there are very few young people waking up in the morning thinking ‘today is the day I start building houses’ and that is the crux of the problem. Very few sons or daughters of home builders are neither encouraged to take over the family business nor actually want to take it over after watching their parents struggle with the ups and downs of homebuilding.

Even if you did want to become a new builder there is still no easy entry in becoming a custom home site or modular home builder.

As a site builder, the new business person has to learn everything on their own, even if they had worked for another builder at one time. Understanding how to market their business, work with customers, design homes, get contracts signed, hire subcontractors, have inspections completed, obtain permits, etc are lessons most site builders learn on the job.

New modular home builders have to know exactly the same things as their site builder siblings but with a twist. Since 65-80% of the house is built offsite in a modular home factory they must learn which steps affect them more than others.

For example, working with subs is really different for modular builders as there is less work to do at the jobsite. They also have to learn about delivery, crane sets and set crews. It’s a twist not for the faint of heart.

If site builders get OJT (on the job training) through self imposed lessons simply because there is nobody training them on the proper processes you would think that new modular home builders would be blessed with tons of training from the modular home factories.

But alas, that is rarely the case.

However, there are some great new ways for young people that want to become modular home builders succeed.

One is a new program being designed by the team at Modcoach that will insure every new modular builder gets the training they need directly from their factory.

Another way is for a franchiser to begin offering new modular builders a different way to enter the business.

Both ways will give the new modular home builder a step up on their site-built competitors.

Once either or both of these pathways to success are ready for the new modular home builder, the modular home industry itself must embrace them and promote it. Target Marketing to young people and others to become modular home builders is a rare commodity but what an opportunity our industry will have it we begin doing it.

Watch for future announcements about the Modcoach “Gate to Great” training system.

Gary Fleisher (the Modcoach) is a housing veteran, editor/writer of Modular Home Builder blog and industry speaker/consultant.


JD Vacey said...

Good Article Gary!
I've Been Screwed So many Times By the Process, then When I get all my Ducks in a row They Change the Rules. I'll just keep fixing the Builders Mistakes This way I don't have to work for them anyway!

Anonymous said...

I think the broader question may be: Is it worth it to be a modular home builder? Are the risks, demands and requirements worth the financial benefits? It seems like modular builder of 20 years ago got into the business through a slow, methodical progression(subcontractor-stick builder- mod builder). For the past ten years, younger individuals have not chosen to get on the first step of the ladder, thus today, there is no one progressing into the mod builder ranks.

There are some interesting efforts out there gearing up to try an address this. Time will tell if they are successful.

The real concern in this industry should be on the part of modular factory owners. The retail distribution system they have relied on for decades is eroding right in front of them.