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    The Cost of Doing Business Study, 2019 Edition
    The Cost of Doing Business Study, 2019 Edition
    The Cost of Doing Business Study, 2019 Edition
    Ebook132 pages56 minutes

    The Cost of Doing Business Study, 2019 Edition

    By NAHB Business Management & Information Technology Committee

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    About this ebook

    NAHB Business Management & Information Technology CommitteeProfits are increasing! How does your business measure up?NAHB's economics and business management experts collected and analyzed 2017 financial statements from builders across the country. They reported average revenue of $16.4 million, slightly over 2014's average of $16.2 million but 20% higher than in 2012. The Cost of Doing Business Study, 2019 Edition provides statistics and analysis so you can see how you compare to other builders, whether you build two homes a year or 2,000. This one-of-a-kind resource discusses financial performance according to builder type and size, as well as industry-wide averages using these key indicators:? Gross margins? Net profits? Cost of sales? Operating expenses? Financial ratios
    LanguageEnglish
    PublisherBuilderBooks
    Release dateFeb 1, 2019
    ISBN9780867187717
    The Cost of Doing Business Study, 2019 Edition

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      Book preview

      The Cost of Doing Business Study, 2019 Edition - NAHB Business Management & Information Technology Committee

      The Cost of Doing Business Study, 2019 Edition

      BuilderBooks, a Service of the National Association of Home Builders

      Disclaimer

      This publication provides accurate information on the subject matter covered. The publisher is selling it with the understanding that the publisher is not providing legal, accounting, or other professional service. If you need legal advice or other expert assistance, obtain the services of a qualified professional experienced in the subject matter involved. The NAHB has used commercially reasonable efforts to ensure that the contents of this volume are complete and appear without error; however the NAHB makes no representations or warranties regarding the accuracy and completeness of this document’s contents. The NAHB specifically disclaims any implied warranties of merchantability or fitness for a particular purpose. The NAHB shall not be liable for any loss of profit or any other commercial damages, including but not limited to incidental, special, consequential or other damages. Reference herein to any specific commercial products, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favored status by the NAHB. The views and opinions of the author expressed in this publication do not necessarily state or reflect those of the NAHB, and they shall not be used to advertise or endorse a product.

      ©2019 by NAHB. All rights reserved. This Cost of Doing Business Study, 2019 Edition is a copyrighted work owned by the National Association of Home Builders of the United States (NAHB). Without advance written permission from the copyright owner, no part of this book may be reproduced, distributed, or transmitted in any form or by any means, including, without limitation, electronic, optical or mechanical means (by way of example and not limitation, photocopying, or recording by or in an information storage retrieval system). For information on permission to copy material exceeding fair use, please contact: BuilderBooks, 1201 15th Street NW, Washington, DC 20005-2800. Phone (800) 368-5242.

      Trademarks: National Association of Home Builders, NAHB, BuilderBooks, and the NAHB logo are registered trademarks of the National Association of Home Builders of the United States.

      Published in the United States of America

      22 21 20 19 1 2 3 4 5

      ISBN-13: 978-0-86718-770-0

      eISBN-13: 978-0-86718-771-7

      For further information, please contact:

      National Association of Home Builders

      1201 15th Street, NW

      Washington, DC 20005-2800

      BuilderBooks.com

      Contents

      List of Figures

      List of Tables

      Acknowledgments

      Introduction

      1. All Survey Respondents

      2. Builders With Land Costs

      3. Builders Without Land Costs

      4. Combination Builders

      5. Small-Volume Builders

      6. Production Builders

      7. Builder Financial Performance by Region and Business Model

      8. Operations

      9. Historical Data and Trends

      Appendix I: Developing Cost Control Systems

      Appendix II: Understanding Your Income Statement

      Appendix III: Profitability Metrics: The Metrics of Home Building – The Starting Point!

      Appendix IV: The Cost of Doing Business Study Survey

      Appendix V: Detailed Tables

      Glossary

      Figures

      Chapter 1. All Survey Respondents

      1.1. Cost Of Sales, Expenses, And Net Profit

      1.2. Profit Margins And Owner’s Compensation

      Chapter 2. Builders With Land Costs

      2.1. Cost Of Sales, Expenses, And Net Profit

      Chapter 3. Builders Without Land Costs

      3.1 Cost Of Sales, Expenses, And Net Profit

      Chapter 4. Combination Builders

      4.1. Cost Of Sales, Expenses, And Net Profit

      Chapter 5. Small-Volume Builders

      5.1. Cost Of Sales, Expenses, And Net Profit

      5.2. Small-Volume Builders With Land Costs: Cost Of Sales, Expenses, And Net Profit

      Chapter 6. Production Builders

      6.1. Cost Of Sales, Expenses, And Net Profit

      Chapter 7. Builder Financial Performance By Region And Business Model

      7.1. Regional Differences In Costs And Profit Margins

      7.2. Profits And Owner’s Compensation By Business Model

      7.3. Balance Sheet By Business Model

      Chapter 8. Operations

      8.1. Main Operation

      8.2. Years In The Residential Construction Business

      8.3 Average Number Of Homes Closed In 2017 By Type Of Builder

      Tables

      Chapter 1. All Survey Respondents

      1.1. Respondents’ Profiles

      1.2. Gross Profit

      1.3. Net Profit

      1.4. Balance Sheet

      1.5. Financial Ratios

      1.6. Top And Bottom 25%

      Chapter 2. Builders With Land Costs

      2.1. Gross Profit

      2.2. Net Profit

      2.3. Balance Sheet

      2.4. Financial Ratios

      Chapter 3. Builders Without Land Costs

      3.1 Gross Profit

      3.2 Net Profit

      3.3 Balance Sheet

      3.4 Financial Ratios

      Chapter 4. Combination Builders

      4.1 Gross Profit

      4.2 Net Profit

      4.3 Balance Sheet

      4.4 Financial Ratios

      Chapter 5. Small-Volume Builders

      5.1. Gross Profit

      5.2. Net Profit

      5.3. Balance Sheet

      5.4. Financial Ratios

      5.5. Small-Volume Builders With Land Costs: Gross Profit

      5.6. Small-Volume Builders With Land Costs: Net Profit

      5.7. Small-Volume Combination Builders: Balance Sheet

      5.8. Small-Volume Combination Builders: Financial Ratios

      Chapter 6. Production Builders

      6.1. Gross Profit

      6.2. Net Profit

      6.3. Balance Sheet

      6.4. Financial Ratios

      6.5. Production Combination Builders: Balance Sheet

      6.6. Production Combination Builders: Financial Ratios

      Chapter 9. Historical Data And Trends

      9.1. Summary Data From Previous Editions Of The Cost Of Doing Business Study

      9.2. Cost Breakdown Of A Single-Family Home

      9.3. Publicly Traded Builders

      9.4. Pretax Profit Margins For Publicly Traded Builders

      Acknowledgments

      The NAHB Economics and Housing Policy Group conducted the survey and tabulated the findings. The NAHB Business Management and Information Technology Committee provided oversight because it has jurisdiction over matters relating to improving the business management skills of NAHB builder members to enhance their competitiveness, profitability, and professionalism.

      In accordance with NAHB strategic plan objectives, the committee makes policy recommendations on business management issues, develops educational programs, writes and publishes manuals, conducts business management research, and provides consulting assistance to other committees.

      The committee’s mission statement is

      "To serve as the leading resource to the building industry in the areas of management, finance, information technology, operations,

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