Wednesday, March 3, 2021

A Disappearing Commodity in the Modular Housing Industry

Everyone in the modular housing industry knows that business hasn’t been this good in years, even decades for some. They also know that it is getting harder to find skilled labor for their production lines, management, and sales teams. Good people to fill these positions are disappearing faster than a cold beer on a hot day.

Something that is unique to the residential modular housing industry is also disappearing; the “new to modular” home builder. The question we should be asking is "why?"

Is it the cost to enter the business or the skill sets needed? Or is it that not many young people are stepping up to enter the business that for years had been crippled by the 2008 housing recession?

Another 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.

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.

Because a small business owner often built their company from the ground up it can be hard for him or her to discuss succession. In fact, more than 60% of all small business owners have no succession plan.

Many modular home builders never envision retiring and definitely do not enjoy discussing their own potential demise. Their family members, especially sons and daughters, were not brought up swinging a hammer and really don’t understand what is involved in running a successful modular home building company.

Actually, the builder wants more for their kids than enduring the ups and downs home construction is known for. They want their little tykes to go to college and “make something of themselves.”

But when the modular home builder is ready to retire, lessen their involvement in their business or God forbid, dies, there is nobody ready to step in and take over. That happens to almost 70% of the modular home builders in this country.

“I'm not planning on dying any time soon” is the mantra of most modular home builders.
Everyone dies and many people retire to enjoy the fruits of their labor. Succession is not an easy topic for a variety of reasons. It's hard to confront your own mortality and not fun to tell a family member or trusted employee that they won't be taking the reins as your replacement.

The best way to control what happens to your home building business; in many cases, your life's work; is to take the proper steps to execute your plan. Even if what you want may anger your family or employees, it's always better to handle it now when it can be discussed than to leave it for lawyers after you're gone.

Over the past few years, the modular industry has seen more new factories open dedicated to huge projects like hotels, affordable housing and medical centers while leaving the single-family home builders to fend for themselves.

Recently we've seen trade schools getting a lot of attention for their role in teaching the skills needed by modular factories but we have never seen is a program teaching people how to become successful modular home builders.

Many modular factories, especially in the East, are so busy today they don't have much time to think about the next 10 years replenishing their builder base when their current modular home builders retire or pass away.

The challenge I'm throwing down for the residential modular housing industry is "how to we acquire and train new modular home builders?" And the answer has never been having the factories do it.

Gary Fleisher, the Modcoach, writes Modcoach News and Modular Home Coach blogs as well as the best site for off-site consultants, Modcoach Connects

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1 comment:

  1. Very good article. The modular home builders have not done in my opinion a good job of communicating as a group. Yes each builder likely has its own circle of friends that they might reach out to from time to time but as a whole not so much. There is not a good source of sharing information and ideas or even sharing talent. Lets get better together...