Spring 2007 issue of Horizons

knowledge. commitment. value. CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS

How Much “Overhead” Is Enough?

Many builders are struggling with “right sizing” their businesses to the level of activity that supports current sales volume. It is both a difficult financial and emotional situation to lay off key employees who have been trained and are high performers. In addition, it has been a misguided notion to keep extra overheard in anticipation of waiting for the market to improve. In today’s market, it is even more important for employees to be versatile and able to perform multiple functions. Employees in many businesses, especially those that are struggling, are asked to be even more productive. It also may result in not every function being completed to prior levels of detail. While there is not an exact formula on how many “overhead” employees to maintain, there are several benchmark sources available. Hays’ Bits n For some timely and relevant information, the NAHB.org Web site has much to offer. n Some good news – it appears that the new local projects of 2007 have generally been successful. n Similar to the trend noted here, according to a recent Builder magazine study, cycle time increased from 126.8 days in 2005 to 132.5 days in 2006 – despite the slowdown in the industry. n Spend the time you have NOW to perfect your systems and processes – while you can. . .

Questions? Contact:

Steve Hays, CPA Partner-in-Charge Home Builders Services Group 314-290-3336 steve.hays@rubinbrown.com

20 u summer 2007 issue