Epcon was building two communities in Columbus that were 20-some units and 30-some units, only 2 or 3 miles apart.
“We finally made a business decision. Instead of doing one first alone so it didn’t compete with the second one, we concluded that the two, because of their size and location, going at the same time would garner more sales than either one by themselves,” he says.
Before they even started building, nearly all of the units were sold.
“When you experience that, that affirms to you what I’m reading in the paper is really happening for us,” Bacome says.
Overcoming the unknowns
Every business has its uncertainties — in fact homebuilding is like a manufacturing process that’s subject to weather elements — so planning is an ongoing challenge.
“You just have to do your best to look ahead, to talk to people, to read trade publications, to see what your experience is and just monitor it,” Bacome says.
But there will always be some element of risk.
“At some point, you’re rolling the dice a little bit,” he says.
Fankhauser says you can try to protect your company with good business practices. For example, Epcon doesn’t buy land years in advance or gamble on future sales.
“We’ll build a model in a community and then we’ll presell homes of our model home,” he says. “So we are not a builder that speculates a lot on homes, betting that buyers will follow to scoop them up.
“We prefer to take a more conservative approach — most of our homes are built only when we have a committed buyer ready for them.”
Another good business practice is patience. At Epcon, Bacome says site selection is a good example.
It’s a democratic process where at least a half a dozen people weigh in. If management isn’t sure, he says they do their research by picking the brains of realtors who specialize in that part of town.
“We’d rather pay a little extra for a really good site, than somebody who has got a bargain site,” Bacome says. “There’s a reason that it’s a bargain site.”
Focused and flexible
Part of good planning is how you position your business. You want to be where there’s a need and you’re effective, while staying current and in touch with your customers.
Bacome says during previous downturns in both the economy and housing industry, Epcon wasn’t impacted much due to its singular focus. It was building in areas that are economically strong for a growing population — baby boomers.
“We have had multiple opportunities over the years to branch into something that’s building related, but not our exact product,” he says. “But we’ve stayed focused, even when we’re tempted occasionally to think of something else.”
That focus cannot be stagnant, though.
Years ago as the Eisenhower generation was replaced by baby boomers, Bacome says he and Fankhauser didn’t catch on as quickly as some of their employees that the market was changing.
Buyers wanted options like granite counters or hardwood floors.
“Our first reaction was, ‘We don’t do options,’” he says. “And finally we came to realize the market was going to leave us behind if we didn’t stay up-to-date.”
