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Case Study: Perfection Builders Experiences Exponential Growth After after Partnering with Franchise

Kansas Company Becomes Major Player in State after adding Epcon Homes to Suite of Offerings

Scott Lehner kept books for a home builder during college, gaining valuable insight into the home building industry. After college, he spent about 18 years as an accountant and investment banker before getting involved in building insulated concrete forms (ICF) homes. In 2004, he merged his business with the business of a talented trim carpenter and project manager, Jason Ronk, to create Perfection Builders.

Epcon Franchise Builders Scott Lehner and Jason Ronk

Co-Owners, Perfection Builders, Wichita, Kansas

Epcon Franchise Builders since 2007

Number of Homes built before joining Epcon: 120

Epcon Homes built since 2007: 400

Epcon Communities developed or in the process of completion: 6

Expected 2017 growth: 3 new communities (2 in Louisville, KY)

Background

Scott Lehner – Finance and accounting

Jason Ronk – Project management and trim carpentry

Lehner and Ronk combined their knowledge and experience to become residential builders in the greater Wichita, Kansas market. They started with spec homes, eventually expanding to add custom homes as well. The pair built their company by delivering ranch style basement homes, as is typical for their market, at a steady clip of 30 to 40 every year. In a competitive market like Wichita, they knew they needed to specialize and capitalize on a targeted market like Baby Boomers to continue their growth.

Not satisfied to rest on their laurels, Lehner and Ronk researched ways of expanding their product mix so that it would have greater appeal to the 55+ demographic, as well as a way of distinguishing themselves from the average home builder. They turned to franchising in 2007. Since then, Lehner and Ronk have added Epcon Communities to their business, and by utilizing the franchisor’s proven systems and resources, they have grown from a small and successful residential builder to one of the largest home builders in their state. The pair is also expanding into Louisville, Kentucky with the development of two new Epcon Communities.

The right target market

Lehner and Ronk wanted to grow their home building company by appealing to the increasing demographic of home buyers over the age of 55. In 2016, there were almost 75 million Baby Boomers, who accounted for 70 percent of American disposable income, according to Nielsen. Targeting this specific demographic was the growth opportunity Perfection Builders needed.

Building homes that appeal to Baby Boomers comes with a few unique requirements, though. This group is looking for ranch-style homes with features like open concept living areas, outdoor patios, natural light and sufficient storage space. The community aspect is especially important to them. In addition to some provided exterior home maintenance, Baby Boomers are looking for amenities like walking trails, clubhouses and fitness centers.

Partnering with a franchise like Epcon gave Lehner and Ronk immediate access to a selection of proven floorplans and guidelines to build communities Baby Boomers want to live in. The limited number of copyrighted floorplans with many add-on options allowed for a higher sales velocity than custom home building, too, which in turn allowed them to develop communities on shorter cycles.

Proven systems and credibility

Building a house is not rocket science. Many can do it. But creating a business focused on building houses that people want to buy? That’s an entirely different story. For Lehner and Ronk, the tools and guidelines—plus the additional name recognition and credibility—a franchise could provide made entering a new home building market much easier.

A franchise business model offers a turnkey approach to home building. Lehner and Ronk already knew how to build houses with decades of construction experience between them. The package of sales and marketing support, including virtual tours, 3D renderings and more, helped Lehner and Ronk jump right into their new market. Epcon’s systemization also shaved months off the building process for individual units, allowing Perfection Builders to close the home and reinvest gains quickly.

“It would take us I don’t know how many years to develop the package Epcon provides,” Lehner said. “I don’t think most builders have the resources, both from a financial and manpower perspective, to develop and implement a system like you could put in place if you follow the Epcon way.”

Using a community-driven system also changed Lehner and Ronk’s business. With a section of land set for development, an entire community could be pre-planned. Lehner and Ronk focused on beautiful entrances and landscaping to ensure buyers are captivated from the moment they arrive. They also brought their sales team in-house instead of using outside real estate companies, further streamlining their business.

Epcon’s ranch-style homes appeal to buyers in the 55+ market, a lucrative business segment for homebuilding companies like Perfection Builders.

“You bet Epcon helped us get into a much faster pace of home building,” Lehner said. “They helped us become more of a vertically integrated operation so now we’re not just home builders, we’re a land development company, a building company and real estate brokers all in one. Epcon’s sales and support staff helped us get here.”

Targeting a growing and wealthy demographic combined with the processes and credibility Epcon provides has allowed Lehner and Ronk to grow their business significantly since 2007. Perfection Builders went from building about 30 homes a year to more than four times that. When Perfection Builders started, they were building 80 percent spec homes and 20 percent custom homes. Now, their business is 75 percent Epcon homes. Most of those are pre-sold, too.

“We’re as efficient now as we’ve ever been,” Lehner said. “We’re lucky to have the right people, the right product, the right areas and the right systems. It just doesn’t get any better than it is right now. We went from being a small middle-of-the-road builder to one of the top builders in the state now because of Epcon. What’s more, we feel like we’re just getting started.”

Become an Epcon Franchise Builder

For in-depth details about the Epcon home building franchise opportunity, download our free franchise report. You can also learn more by visiting our research pages.

Disclaimer: The offer of a franchise can only be made through the delivery of a Franchise Disclosure Document. Certain jurisdictions require registration prior to the offer or sale of a franchise. We do not offer franchises in jurisdictions where we are not registered (or exempt from registration). Epcon Communities Franchising, Inc. 500 Stonehenge Parkway, Dublin, Ohio 43017. Minnesota Franchise Registration No. F-3531.

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Components of a Successful Marketing Strategy to Sell More Homes in Less Time

Marketing is a cornerstone of an efficient home building company and critical for selling homes.

As residential builders know, it takes more than vertical construction to maintain a healthy home building business. Marketing and sales support, both before and after a home is closed, are essential pillars of a home building company.

In today’s home construction industry, sales velocity is key. With the right systematized marketing strategy, builders can capitalize on a booming market, accelerate sales and realize faster return on investment.

The Importance of a Great Consumer-Facing Website

A web presence is important for any business today, and a robust consumer-facing website serves as an effective sales tool for builders. The website should be mobile friendly, so visitors can have a superior user experience no matter which device they use to browse. Additional features like a blog, search tool or an interactive map of where you build can improve the user experience and help ensure potential buyers find the information they need.

A builder’s website also offers the opportunity to incorporate new technology like 3D virtual tours, digital renderings of floor plans and an online portal for printed marketing materials, which can help accelerate the sales process. Digital renderings, for example, can be a critical tool in pre-selling communities where actual photographs aren’t yet available.

Professional photography has a direct impact on how quickly a home sells.

High Quality Photography vs. Mediocre Photography

  Builders can make more money and sell homes faster with high quality photography as opposed to semi-professional photography. Just because you paid a photographer doesn’t mean the photos will be high quality. A great professional home photographer will provide art direction, help stage the room and get the right angles with the right lighting, making a huge difference in the quality of the final product. In fact, an IMOTO study showed that homes using professional photography sold 50 percent faster and 39 percent closer to the original list price than homes without professional photos.

Don’t just get photos of your model home, either. Professional photographs should also emphasize lifestyle living. In the case of 55+ communities, photos of a central clubhouse, walking paths and other such amenities that appeal to buyers should also be included.

Builders can benefit from digital renderings of homes yet to be built that allow potential buyers to visualize what the final home will look like.

Additional Things to Consider

In general, marketing is a lost opportunity for many new home builders that aren’t dedicating enough resources to it. Consider how much time and effort REALTORS put in to each individual listing to get one sale, a home they will only sell once. Bountiful photography is taken and every detail of the home is listed. New home builders often fail in comparison, offering fewer details and meager images of a home they may build hundreds of times.

Marketing is typically understaffed as well. Professional architects,  accountants and lawyers are employed for various parts of the home building business, but the marketing staff is often the “least busy” person in the office. Hiring trained professionals to build a strategic marketing plan as part of your overall business strategy is money well spent and will provide greater returns.

Developing an arsenal of marketing resources that follow best practices can also get expensive. But once a new home builder has created a strategy and the necessary materials, he can reuse those materials and methods to sell an entire community—and future communities.

By partnering with a company such as Epcon that already has these tools, developers and builders of all sizes can leverage these resources without the significant investment of doing it on their own. This enables them able to focus more of their energy on developing their communities. Epcon’s systematized marketing processes can help shave time off the selling process, increasing sales velocity and speeding-up builders’ return on investment.

In a future blog post, we’ll cover new technology like virtual tours that home builders should incorporate in their marketing strategy to get a leg up on the competition. For more information on the marketing support Epcon provides, download our free franchise report.

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The Sales Velocity vs. Profitability Debate in New Home Construction

Home builders need to keep an eye on both profit margins and sales velocity.

Traditionally, home builders have focused on profit margins while ignoring sales velocity. Instead, builders can increase their overall economic returns by considering margins and velocity together, says Fletcher L. Groves III, vice president and senior consultant at SAI Consulting.

Why sales velocity matters

Increasing profit margins on new home construction is a worthy goal, but even when margins are flat, a builder can make more money by increasing sales velocity. Builders that can develop, build and sell communities faster will see greater returns than those solely focused on profit margins. They will also see accelerated returns, allowing them to move on to their next community and start the cycle again.

Groves notes that a builder with an 18 percent gross margin and an 80-day cycle time would outperform a builder with a 24 percent gross margin and a 180-day cycle time by a ratio of two to one. While profit margin is important, maximizing the speed at which homes are sold as well leads to even greater returns.

Keys to achieving high sales velocity

It goes without saying that to sell homes quickly, you have to first build them quickly without sacrificing quality. To do this, you must first look at your project management process. Greater efficiencies in every area of your business must be achieved to reduce construction time while maximizing profit potential. A scalable, repeatable building process, partnered with well executed management of time, materials and labor, is the key to reducing cycle time and increasing productivity

To do this, employing a developer/builder business model is effective at decreasing production time. With a plot of land set for development, an entire community can be pre-planned. Established home builders and homebuilding franchisors have product designs and business processes that are time-tested and well-documented, making homes easier and faster to build. Epcon floorplans, for example, can be built in as little as 100 days—twice as fast as the industry average of more than six months from start to completion.

Once the building process is accelerated, marketing campaigns and sales events can help developers sell homes quickly. With an emphasis on lifestyle, communities with great appeal to 55+ buyers sell by allowing buyers to visualize socializing with neighbors, entertainment within the community and proximity to restaurants and shopping. Sales materials and events should highlight the amenities that create the lifestyle buyers want.

Communities driven by a lifestyle focus where residents have plenty of opportunities for socialization with neighbors appeal to the 55+ demographic.

The right balance of profit margin and sales velocity is important for any type of construction, but builders with an eye towards building 55+ communities have a unique opportunity to benefit from higher sales velocity. The 55+ demographic will lead the new home building category for the first time in U.S. history, according to Metrostudy. With 52 percent of all new home purchases coming from this age group, there is plenty of room to increase sales velocity in communities offering great appeal to 55+ home buyers, leading to greater profit potential for the builder.

Profit margins will always be important in new home construction, but increasing sales velocity adds another opportunity for growth. By focusing on both profit margins and sales velocity, builders can increase their revenue without sacrificing quality.

For more information about balancing home builder profit margins and sales velocity with the Epcon homebuilding and community development franchise opportunity, download our free franchise report. You can also learn more by visiting our research pages.

Disclaimer: The offer of a franchise can only be made through the delivery of a Franchise Disclosure Document. Certain jurisdictions require registration prior to the offer or sale of a franchise. We do not offer franchises in jurisdictions where we are not registered (or exempt from registration). Epcon Communities Franchising, Inc. 500 Stonehenge Parkway, Dublin, Ohio 43017. Minnesota Franchise Registration No. F-3531.

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What the 55+ Home Buyer Is Looking For in New Home Construction

When exploring new construction business ideas keep the 55+ home buyer in mind.

Investors are finding great opportunity for new home construction business ideas in the 55+ home building industry. As Baby Boomers start to retire, the market for 55+ housing is growing. Baby Boomers are expected to make up 30 percent of home buyers this year, according to Realtor.com®, making communities that appeal to 55+ home buyers an intriguing new home construction business idea.

In “The Changing Face of Today’s 55+ Consumer,” Mollie Carmichael of real estate consumer trends research firm John Burns Consulting pointed out that more than 60 percent of people shopping for a home today are above the age of 55. That’s 62 million households with a net worth of $488 million—numbers worth paying attention to when evaluating new home construction business ideas. The sheer number of people in this demographic (especially above 65) is also increasing, according to the Joint Center for Housing Studies at Harvard University. With that many potential home buyers, the 55+ demographic is a great target for developers.

55+ home buyers are looking for smaller, ranch-style homes and communities that provide exterior home maintenance like lawn care.

How to build for the 55+ home buyer

The 55+ home buyer is looking for a specific type of home and community. This demographic increasingly focuses on lifestyle: entertaining and spending time with friends are in; endless chores are out. The choice to move into such a community, say industry experts, is lifestyle-driven, not needs-driven.

The 55+ demographic prefers ranch-style homes that emphasize functionality and offer a feeling of airiness inside. Successful home builders have developed floor plans that appeal to this group’s unique desires based on extensive market research of the demographic. Since lifestyle and entertaining is a focus, open concept living areas and features like outdoor patios are popular. A survey of the 55+ age group found that buyers are looking for high ceilings, natural light and sufficient storage space. Flex rooms are also a plus because they allow homeowners to customize their space to accommodate guests, a home office or whatever else they need.

Many 55+ new construction buyers are downsizing and looking for less square footage, fewer bedrooms and less maintenance. In addition to offering the right floor plan options, 55+ communities must provide some exterior home maintenance. This may include lawn care, snow removal, trash pickup and other landscaping services.

More than just a smaller, low-maintenance home, this group of buyers is looking for a community. Developers targeting this demographic need to build communities that feature amenities like walking trails and clubhouses. The clubhouse should have a swimming pool, fitness facilities and plenty of room to host social events, all of which facilitate the sort of lifestyle that appeals to the 55+ demographic.

Successfully appealing to 55+ home buyers requires focus on a casual and relaxed lifestyle with plenty of time and room for entertaining and socializing with friends.

Location matters for 55+ communities, too. Baby Boomers want to be near shopping, restaurants, medical services and grocery stores, not in remote areas. Warmer climates like Florida, Arizona and southern California are especially popular, as some 55+ home buyers want to relocate for their retirement home.

  Successful home development requires these kinds of features and amenities to appeal to this growing demographic. By focusing on buyer needs and wants, home building for the 55+ demographic can be a lucrative and rewarding investment.

If you’re looking for new construction business ideas targeting Baby Boomers, get in-depth details about the Epcon homebuilding franchise opportunity by downloading our free franchise report.

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