Friday, October 18, 2019

The Next Major Concern for Modular Home Factories

If trying to meet new building codes every year, finding skilled production workers and rising transportation costs weren’t enough for the average modular home factory to worry about, finding “new to modular” builders is rapidly becoming the next big concern.

Over the past year I have been contacted by modular home builders that want to get out of the home building business for all sorts of reasons. Some want to retire while others simply want to go into another type of business. These builders all share one common problem. Nobody wants to buy their business. It’s not because they aren’t profitable, it’s simply that being a home builder, either site or modular, is not something many people want to do.

30 years ago I managed a lumber yard where I needed three outside sales reps to handle all the home builders that bought lumber and building materials from us. Each rep had about 30 site builders. Today there aren’t 20 site builders in that same sales territory.

Home builders 40 years ago brought their son or daughter into the business and many had business names like “Fred Block and Son Home Builders”. Fast forward to today and a lot of those sons and daughters don’t want their children to join the family business. They want them to become lawyers, doctors and just about anything but home builders.

The why is a mystery but the end result is fewer young people entering the home building industry as a builder.

And even if a young person with an interest in becoming a modular home builder were to knock on a modular factory’s door, there is absolutely no training available from the factory explaining how to become a modular builder.

No sales training, no construction training, no anything other than what the sales rep tells them and we all know most reps have neither the time nor the training to teach newbie modular home builders about the business.

Many experts and consultants in the modular construction industry talk about all the IT advances and automation coming our way but nobody is preparing our industry for “the day the music died” for the lack of ‘new to modular’ builders.

When that day comes and it won’t be much longer, a modular factory will either be building commercial projects only or become one of a dying breed selling homes to a rapidly dwindling single family builder base.

Being a modular home builder is not a bad choice for anybody but our industry must step up and begin formal training programs to bring them in.

That training needs to be developed right now and it can’t be just one factory doing it and not sharing with the other children. No, it has to be a concerted effort by someone in the industry and an organization or association that truly wants to see single family modular housing become what everyone says it can be…”The leader in housing!”

But training alone is not quite enough. We need to promote modular home building as a profession to get younger people to at least give us a look.

Sorry Charlie, there is no fairy Godmother that can wave her wand and make all this happen. It will take hard work, lots of time and monetary support by the entire network of modular housing factories in the US to bring this about.

If you would like to be part of this effort, I'm taking names and making a list. Let's see what we can do together.

Maybe then we will have a different concern, too many builders and not enough factories! But that is a problem we would all love to see.

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


Anonymous said...

Gary, another great article about a problem that is quickly becoming the elephant in the room for modular factories. Without a steady stream of new builders many factories will be forced into cookie cutter, very low profit affordable housing projects and commercial work like hotels.

If we don't begin doing something very soon there will be no small independent small modular home builders left, the only ones that remain will buy from the few factory that will still be building custom homes.

I have a couple of ideas how to begin a training course like you mentioned and will be emailing them to you soon. Good luck Gary, we need more people like you to help keep the single family home a real part of modular construction.

Neither the BSC nor the MHBA have any plans to do a strictly modular construction training course for builders so it's up to us builders to do it. Hell, the factories would never do it.

JC said...

One voice in the wilderness....

Anonymous said...

Maybe when the hype matches the delivery more will enter the business. Delayed deliveries; questionable quality control; lack of service support; and clear definition with a new builder of scopes of work required by them result in the one and done builder. When you consider that the mean deliverable by a small builder is 8-10 homes a year with plant delivery represented as 8 weeks turning into 16+ plus 4-5 weeks to complete on site NO WAY competitive

Ken Semler said...

There are lots of people that are interested in custom modular home construction. However, as an industry, we just haven't made it easy. In general, home construction is a hyper-fragmented industry. Modular home construction has been worse - until now. We created Express Modular Franchising to address many of the issues you raise in this article. We are providing the training and support for new entrants to off-site modular construction.

One of the things that we suspected and that we are finding to be true is that a surprising number of existing modular builders are interested in become part of the franchise effort. As a small builder with no systems, no brand, and inconsistent marketing/sales their business is hard to sell. We have hundreds of modular builders in the northeast alone that are in their late 50's and early 60's that want to plan for an exit. They are contacting Express Modular Franchising as a method to be a part of a brand, to get the marketing leads and systems that they wish they have always had, and to be positioned in 3-5 years to have a business that can actually be sold as a franchise location which will reward all of the hard work they put into building their business!

Our goal is to strengthen existing modular builders that join us and to provide a success path for entrepreneurs and new-to-modular builders. That makes them successful and builds a stronger industry for everyone!

Anonymous said...

I keep hearing about the franchise Ken is offering but I don't see any $$$$ staying the cost