Everyone in modular manufacturing and construction knows that COVID-19 will change the way we all do business.
The good news for the modular industry is that in just a matter of months after most of the COVID-19 restrictions are lifted, our industry will not only be back to normal but with labor and supply chain shortages in the site built industry, modular is in the best position its ever been to gain huge shares of housing and commercial markets.
However, something that is unique to the residential side of the modular housing industry will begin disappearing; existing and “new to modular” home builders. In fact even site builders are disappearing these days.
One big reason for the lack of new builders coming into the modular housing business is the older modular builder has never thought of putting a succession plan in place.
Another reason is very few builders, either on-site or off-site, have any notion what to do if their business is hit with a disaster. Many didn’t know how to deal with the 2008 housing recession and now don’t really know if they can survive this crisis.
A Blow to the Mid-Section
COVID-19 will cripple or close a lot of small businesses across the US and small independent modular new home builders are no exception. Many small modular home builders have their identities wrapped up in their business. That makes sense because building a small business is often the fulfillment of a dream -- a very personal kind of success and the current crisis has and will continue to erode those dreams to the point of many of them closing their doors forever.
Because a small business owner often built their company from the ground up it can be hard for him or her to discuss closing it down for whatever reason.
58% of all small business owners have no succession plan and even fewer, closer to 90%, of modular new home builders have any plan for having to close their business because of natural disaster or in the case of COVID-19, a virus. Most just worry about dwindling income hoping they will sign a couple of contracts that could help carry them through to start receiving draws.
Many modular home builders never envision retiring and definitely do not enjoy discussing closing their doors because of this crisis.
But the truth is, a wish and a prayer is not a plan.
You Need to Take Control Now
The best way to control what happens to your home building business after COVID-19 is to take the proper steps to execute a plan that allows for many contingencies including permanently closing the doors, weathering the crisis and how to improve your business. That’s the three stages available during and after this crisis.
Even if what you plan angers your family or employees, it's always better to handle it now rather than to leave it for lawyers afterwards.
One approach to not becoming one of those disappearing modular home builders is joining together with other modular new home builders or looking into alternative plans to make your business more salable.
The most important thing to do right now is realize that COVID-19 has changed business as usual and you need to get ready for the new normal that is about to change your business.
If you want some help in surviving COVID-19’s impact on your business, you need to learn some fundamental steps in marketing and selling that you’ve probably never tried or thought of before. Keep checking back for answers to help you stay in business Post COVID-19.
Gary Fleisher is a housing veteran, editor/writer of Modular Home Builder blog and Modular Construction Industry Observer and Information Gatherer