A Think Tank Exclusively for Builders
The National Association of Homebuilders (NAHB) created the Builder 20 Club network with the mission to ensure the highest professional standards are met among elite builders across the country. Custom homebuilders face extraordinary challenges in meeting the expectations of high-end clients and needed a platform to share advances in construction techniques and practices, finance, insurance, engineering and architecture.
The NAHB accepts applications for membership from qualified luxury homebuilders nationwide. NAHB profiles the company based on company type, product, sales volume, and closings, looking for a good fit with like builders. NAHB limits each club to no more than 20 members, all of whom must operate in markets no less than 150 miles from each other.
Membership chairpersons of existing clubs review the applications to determine whether to extend an invitation for a “get acquainted” meeting. “It’s almost like a first date, where they’re sort of seeing if they like each other,” says Kimberly Bailey, the NAHB’s assistant vice president of customized member services. If all agree, the new builder will join. If not, NAHB will assist in finding a more suitable match.
Lain and Barbara Chappell are members of a Builder 20 Club called The Pacesetters. The club “acts as a de facto board of directors for members.” said Lain Chappell. “They develop, share and critique each other’s business, strategic and marketing plans. They cooperate in continuing education and share the latest industry innovations and information.” The Builder 20 Clubs are the only nationwide platform that allows CEOs to meet with other CEOs; Lain and Barbara Chappell travel to meet face-to-face with their club peers at least twice a year, usually in the home market of one of the members.
Homebuilders who are understandably reluctant to share their challenges and knowledge with their competitors can freely share them with builders from other markets. Barbara Chappell said, “Local association meetings aren’t very helpful; it feels like everyone is in competition with one another. With the Pacesetters, we can be honest and vulnerable with one another without any risk. We put it all on the table and ask, ‘How do we improve this? How can we do better? The other members are always glad to weigh in.”
Membership not only entitles builders to unique advantages, it also requires them to meet rigorous standards of excellence. They engage with other members in constructive criticism, holding each other accountable in every area of their business. “You don’t want to travel to those meetings without having most of your ducks in a row,” admits Lain.
For example, NAHB distributes a financial template with more than 100 line items for members to complete. Builder 20 members will spend a day of their biannual meetings reviewing the numbers, sometimes hiring a financial consultant to drill even deeper. NAHB compares more than 400 submissions in a confidential report to members so they can benchmark their results against top builders nationwide, highlighting areas they can improve.
As clients compare custom homebuilders, membership in one of the NAHB’s Builder 20 clubs should be a consideration. Such membership prequalifies builders and helps weed out contractors who are less experienced and/or competent. Lain refers to membership in The Pacesetters as “iron sharpening iron,” and those about to make a significant investment in a custom home are going to want the sharpest knife in the drawer on their side.