NAHB Business Management Training

One of the interesting parts about NAHB (National Association of Home Builders) as compared to most other certification or organizational entities is an emphasis on Business Management.  For many of their “entry-level” (for better lack of a term) courses one must take Business Management for Building Professionals.  Thus in order to receive the CGP designation I am required to get, I was back in class for one final day.

As I mentioned in yesterday’s article, our instructor was John Allen of Southern Construction & Design Inc. He started his business back in 1997, and was quite open about some of their earlier mistakes and how his attitude has changed over time as it relates to this course. One of the best statements I have heard on the subject was one he made today – one must communicate or disintegrate. If you fail to communicate with clients – no sales, fail to communicate with employees or trade partners – expensive mistakes, and the list goes on.

This class could be easily summed up as an introductory class to all phases of managing your business & starts off with some business basics and how many functions (or hats) are involved. They broke out over 15 different “hats” and placed them into three main groups; Sales, Administration, and Production. (Pick 2 – you generally won’t be good in all three) During this introduction, they introduced us to the 5 P’s; Planning, Purpose, People, Performance, and Progress reporting that we would be covering in depth.  

• Planning:
  • what is a business plan, what’s involved, and why is it important
  • creating a budget, how to figure markup & margins required to make a profit
• Purpose:
  • What is the purpose of each individual – creating org. charts & job descriptions
  • Setting up workflow & procedure manuals for Sales, Admin, and Production
• People:
  • Employees – Hiring, training, retaining, compensation, benefit packages
  • Trade Contractors – Finding, retaining, etc…
• Performance: How to increase via tools & specific examples
• Progress (reporting & monitoring): How are we doing, how do we measure, the balance sheet, cash flow, etc…

Overall I think NAHB is doing a great service for its members (or even non-members that may choose to take the course) with this requirement. One main reason is a common statistic that is thrown around quite regularly, and that is how 95% of most construction companies go under within 5 years. Many of the questions I see & help answer on some of the forums involve a lot of the information covered in this course. Now this course does not dig fully into all the things required, but it should be enough for many to go, hmmm, maybe I should look into that some more. (Assuming the resources available online or at the back of the book don’t get them there)

Now I can see a few people asking, well should NARI or others follow this example? I would have to say it depends on the organization. As a NARI member, I don’t see how it would be applicable to their programs as most individuals seeking one of their certifications is either a Crew Leader or has been in business for 5+ years already. As for groups like BPI, or other “get trained as… & start tomorrow as a certified…” companies – I would say they should seriously consider adding it in.

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