Custom Home Builder Business Plan and SWOT Analysis

Custom Home Builder Business Plan, Marketing Plan, How To Guide, and Funding Directory

The Custom Home Builder Business Plan and Business Development toolkit features 18 different documents that you can use for capital raising or general business planning purposes. Our product line also features comprehensive information regarding to how to start a Custom Home Builder business. All business planning packages come with easy-to-use instructions so that you can reduce the time needed to create a professional business plan and presentation.

Your Business Planning Package will be immediately emailed to you after you make your purchase.

Product Specifications (please see images below):

  • Bank/Investor Ready
  • Complete Industry Research for the Industry
  • 3 Year Excel Financial Model
  • Business Plan (26 to 30 pages)
  • Marketing Plan (24 to 28 pages)
  • 425+ Page Funding Directory
  • PowerPoint Presentation
  • Loan Amortization and ROI Tools
  • Three SWOT Analysis Templates
  • How to Start a Business Guide
  • Easy to Use Instructions
  • All Documents Delivered in Word, Excel, and PowerPoint Format
  • Meets SBA Requirements

Custom home builders are in a unique business that allows them to generate substantial revenues by developing homes that have been architecturally designed specific for one individual or one family. One of the nice things about this business is that they are able to ensure that their revenues are generated in any economic climate given that the people that develop custom homes typically are higher net worth individuals are less swayed by an economic recession. Additionally, the operations of a custom home builder can be expanded or contracted depending on the overall nature of the housing market. Usually, a spike in interest rates does have a modest downward pressure on the revenues generated by a custom home building business. However, and again – these businesses are almost always able to produce revenues given at the high net worth individuals are helping homes are always going to be able to afford them even when the interest rates spike. Additionally, many custom home builders often operate in a general contracting capacity when they are not developing a new home. This general contracting work can provide a highly predictable revenue for the business as it relates to making general repairs to any home that has been developed by the custom homebuilder as well as by the general public at large.

One of the most difficult things of owning and operating this type of business is that there are a number of inputs that need to be dealt with via the construction of a home specific for one individual. Foremost, there are going to be a need for the homebuilder to maintain relationships with a number of specialty subcontractors. Given that these businesses operate on a per project basis, most custom home builders do not maintain a large staff of employees but rather use independent contractors and third-party subcontractors to render the services to the general public.

The operational expenses for this type of business are considered to be very high. However, the barriers to entry are considered to be moderately low given that any general contractor can operate in a custom home building capacity. Typically, the startup costs that are associated with a new custom home building business range anywhere from $100,000 all the way to $1 million depending on whether or not the construction equipment to be used for custom home building is going to be acquired.

Given that this is a real estate focus business, almost all financial institutions are willing to put up the necessary capital in order to start a new custom home building business. A business plan featuring a three year profit and loss statement, cash flow analysis, balance sheet, breakeven analysis, and business ratios paid should be developed. Within the financial model a special discussion should be had as it relates to the month-to-month revenue generation. In areas such as the Northeast where there are changes in seasons, it is important that the real estate developer or custom homebuilder properly showcased to financial institution that the bulk of revenues will be occurring during spring, summer,, and fall months. As such, it should be noted that the custom homebuilder will be required to continue to make any type of loan payment that may have been undertaken even when a project is not occurring. During these times, many custom home builders will provide general contracting services to the general public in order to satisfy any underlying financial obligation.

The only properly developed financial model, a full demographic analysis outlining the target market needs to be included as well. This includes not only a discussion regarding population density, median household income, and median family income but also a thorough examination of the value of the local or regional real estate market. This needs to include tables and charts that properly focus on land value as well as with the comparables home sales have been over the past 12 months. This will allow the custom homebuilder to understand his target market and the types of people that we targeted for these types of services.

A custom homebuilder marketing plan needs to be developed as well. This marketing plan should include a discussion regarding how to develop ongoing relationships with subcontractors within the market as well as with third-party real estate developers that may call on the business for specialized construction needs. A website that thoroughly showcases previous homes developed by the company, pricing information, and contact information needs to be included as well. One of the other ways that many custom home builders generate revenues from the onset of operations is to develop strong relationships with referring real estate agents as well as real estate brokerages. In some cases, a wealthy individual that is seeking to purchase an existing home may forgo this purchase if they do not find a home that they want and rather decide to build it. As such, the strong relationships with real estate brokerages and real estate agents can greatly increase the revenues of the business from the onset of operations. A presence.

Presence in social media is also important given that many people now view photos online on platforms such as FaceBook, Instagram, Google+, and Twitter. Of special importance to a custom home builder should be to maintain profiles on platforms such as FaceBook and Instagram given that these are image intensive websites. This will allow the business to develop a strong reputation among the general public as it relates to the quality of work. There has been a huge trend among custom homebuilders and real estate developers to maintain extensive social media marketing campaigns.

A custom homebuilder SWOT analysis should be produced as well. As it relates to strengths, most custom homebuilders are able to control their underlying operating costs given that the majority of these businesses operate on a per project basis. As such, in times of economic recession or spiking interest rates these businesses are able to effectively contract their operations in order to remain profitable. The general contracting services that may be rendered by this type of business can also offset any risks as it relates to taking on per project work. For opportunities, these businesses can readily expand into additional markets by establishing additional locations and by furthering relationships with referring real estate agents and brokerages. For weaknesses, this business is somewhat subject to fluctuations in the economy. As such, there are going to be years that are very good as well as years are not so great. As such, a custom homebuilder on for newer needs to be aware of these fluctuations and properly prepare for them at all times. For threats, really the only threat faced by these businesses are substantial and negative changes in the economy. A spike in interest rate often creates a much higher cost for housing. As such, if the custom homebuilder specializes in working with people that are more middle income this may hurt the business substantially. However, again – most of these businesses deal specifically with higher net worth individuals that are less swayed by a spike in interest rates, economic decline, or other deleterious economic activities.

Provided that the owner operator has a significant amount of experience in construction and general contracting, a custom homebuilder can be a highly profitable small to medium-size business to own and operate. As always, the entrepreneur needs to have a full understanding of the underlying input and operating costs related to this business in order to ensure that they are able to remain profitable on a year-to-year basis. These businesses are popular among banks and lenders in regards to capital given the fact that there is a substantial amount of collateral involved and it is real estate focused.