Spring 2008 issue of Horizons

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

withholding. The industry has worked well for a variety of reasons with those treated as independent contractors. Let’s hope there are no major changes. There seems to be some clarification forthcoming on the definition of a “green builder” or a national green building standard. NAHB has accelerated its work on a National Green Building Program. It appears there will be four to five levels of “green,” starting with emerald and ending with bronze. NAHB has developed a help piece titled “Back to Basics, NAHB’s Toolkit for a Challenging Market,” which can be obtained by viewing NAHB.org – good stuff! A slightly revised NAHB Chart-of-Accounts will be published later this year. What Can Be Done Now to Survive the Crisis? Create a Business Plan and Upgrade Systems and Processes Strive to be the best you can be at your current level of activity. Use this time to upgrade and improve your systems and processes. Create a short-term (one-year) and a long-term (five-year) plan. Include both your income statement results and a period end balance sheet to monitor ratios like debt to equity. Budget at a detailed level to remain accountable and manage costs. Update your short-term plan quarterly and your long- term plan annually. Manage Your Overhead Review your staffing levels versus your current, short-term plan and long-term plan sales. Keep control of your developed lots and spec inventory levels. Review each detail income statement expense account for cost savings. • • • • • • • • • • • •

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Cross-train individuals to keep them productive and better utilize resources. Walk your job sites to identify needless waste and opportunities for savings. Remember, cash is king – treat it carefully! Work with Professionals Ensure that your relationships with your bankers are solid. Be sure to get ahead of your banker with your forecast. Remove the element of surprise in your year-end financial statements. Always work with a lawyer before signing contracts. Adjust insurance rates based on your new production levels.

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Questions? Contact:

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

Hays’ Bits I was fortunate to serve as a judge again for Builder Magazine America’s Best Builder Award. It is very interesting to see the characteristics that are consistent with these outstanding companies – mainly exceptional people, processes and systems.

Heard a new term for a punchout carpenter – “detail technician.”

24 u spring 2008 issue