BuildersOutlook2023Issue10 | Page 3

EPAB President ’ sMessage
2023Issue10 BuildersOutlook 3

EPAB President ’ sMessage

Survival tips for builders

Delton Deal
President El Paso Association of Builders
Surviving as a builder when interest rates spike very high can be challenging , but it ' s not impossible . Here are some strategies that we ’ re considering to weather the storm during periods of high-interest rates . Diversify in this environment , there may be a slowdown in new construction projects .
Diversify your services to include remodeling , renovations , and home improvement projects , which tend to be more resilient during economic downturns . Offer different financing options to your clients . This can help make your services more appealing , even when interest rates are high . Consider partnering with local banks or credit unions to offer competitive financing packages . While nobody wants to lose staff , tighten cost controls and budget management , and be diligent in managing your expenses and overhead . Find ways to be more
efficient in your operations to maintain profitability .
Cultivate and build strong relationships , with suppliers and subcontractors . In difficult economic times , having reliable partners can help you negotiate better prices and terms , which can be essential when interest rates are high . Stay informed and keep a close eye on the local housing market and economic conditions . Understanding your market can help you make informed decisions about which types of projects to pursue and when to scale back .
Here are a few other items that we are considering to buy time and wait out our government ' s non-action .
Price Strategies :
• Adjust your pricing strategies to reflect the higher interest rates . Be transparent with your clients about how the rates may affect
the cost of their project , and work with them to find solutions that fit their budgets .
Refinance Existing Debt :
• If you have existing loans , consider refinancing them to take advantage of lower rates if they become available . Reducing your debt service costs can free up cash flow for your business .
Maintain Cash Reserves :
• Keep a healthy cash reserve to cover operating expenses during lean times . Having cash on hand can help you stay afloat when there ' s a slowdown in business .
Stay Informed and Adaptive :
• Stay informed about economic trends and changes in interest rates . Be prepared to adapt your business strategy as the economic landscape evolves .
Seek Government Assistance :
• Look into government programs or grants that may be available to support small businesses during challenging economic times . These programs can provide muchneeded financial assistance .
Remember that surviving high interest rates as a custom builder requires a combination of proactive financial planning , adaptability , and a strong understanding of your local market . It ' s also a good idea to consult with financial professionals , such as accountants and financial advisors , who can offer guidance specific to your business ' s financial situation . Use your local Home Builder Association ' s knowledge and hold builder summits to discuss what ’ s working and what ’ s not .