by Gary Fleisher
I managed two of the biggest lumber yards in central PA over 30 years ago. Between the two locations, I had 5 outside sales reps, a kitchen rep and 3 inside builder salespeople at the contractor counter. Serving the builders was a fleet of 7 trucks making deliveries at least twice a day to our builder’s job sites. There were always at least 20 people in the “yard” pulling orders for those deliveries and the builders who stopped in for materials.
Each of those outside sales reps had at least 20 builders to call on, sometimes daily. They did takeoffs for their builders, visited every job site and were responsible for collecting past due accounts.
At the time there were only a couple of offsite modular or panelized home builders in the area with only a couple of houses under construction, but it wasn’t unusual for my store’s onsite builders to have more than a hundred new homes under construction at any time. Offsite was still relatively new to most builders and it seemed like only the novices that hadn’t grown up in construction were adopting offsite.
That was the “Golden Age” of new home building! Today most of those builders have stopped building new onsite homes with age and death claiming most of them.
Very few of the builders from 30 years ago had a succession plan because they wanted more for their children than just pounding nails. Their children weren’t at the job sites to see what their parents did and very few were allowed to catch the “making sawdust” fever.
Even today, the few that did follow in their parent’s footsteps are not encouraging their children to take over the business. It’s tough and the parents don’t want their children, who now get ribbons for placing 8th in an 8-person race, to enter such a tough trade as homebuilding. Better for them to become a lawyer, doctor or even a politician. They might hit their finger with a hammer or cut off the tip of their finger like their “old man” did.
There are many reasons for the lack of 25-34-year-old people entering not only the building business, but business in general with the biggest being fear of failure. A recent report by independent industry consultants stated that almost 50% of that age group are held back in starting a business by fear of failure while the over 35 age group only has a 33% fear of failure rate.
There is a slight glimmer of hope for the 25–34-year-old age bracket, however. It is becoming the norm for young Americans not to see the value of a college education. When it comes to small businesses, a lot of owners don’t have a college degree. But that glimmer of hope is reserved mostly for the digital technology and online commerce industries with young people, who have grown up living in those worlds and wanting to join those industries rather than pick up a hammer.
Financing is one of the most difficult hurdles a young entrepreneur must overcome. Because they don’t have strong credit history or savings it is that much harder to get approved for financing. Younger new home builders not only need money to start their business, but they also must have enough in reserve to live on for at least 6 months until they see any money coming in from their contract(s).
At IBS 2022 a lot of young people could be seen wandering the aisles of displays and vendors booths, listening to all the speakers and being excited just to be there. But when asked, the majority are working at entry-level positions with companies in marketing, media, CRM or Internet-based businesses with little desire to actually become any type of builder.
So, even if they have a strong desire to start a business, they will wait for a while before deciding to go into business for themselves. It probably won’t be as a builder in the offsite construction industry. Instead, they will look at becoming a vendor supplying builders with new technology or processes they started.
To further hinder young people from entering the new home building business is the lack of any formal training in construction, sales, marketing and if they would like to become a modular home builder, for example, there is no training for set and finish of a modular home being given anywhere by anybody. Not from the factory and not from any of the national building associations today.
Will we ever see the “Golden Days” of small independent new home builders again? Probably not. That ship has sailed.
The offsite housing industry is beginning to offer education programs for people wanting a pathway to become offsite home builders. It must happen if the offsite construction industry wants to bring in young people to continue selling and building single-family homes. Vo-Tech schools are once again becoming the place for people to learn the skills needed in construction. But don’t think they are just for younger people. Many over the age of 30 are signing up for classes in those skills because the offsite construction industry is offering some of the highest wages for plumbers, electricians, and finish workers.
New builders using offsite construction methods are the future of single-family custom housing in the US. That’s a Golden opportunity if there ever was one!
