The State of Residential Construction Industry (SORCI) Report 2024 by APB

ANNUAL
REPORT
STATE O& RES#ENTA CONSTRUCTON N#USTR"
Commissioned By: SPONSORS:

FREE BOOK:
PROFESSIONAL
BUILDERS SECRETS
Just cover shipping (USD $12.95)
Amazon #1 International Best Seller
THREE Special Bonuses Valued at USD $494 Absolutely FREE
AD
BONUS 1 BONUS 2 BONUS 3

Online Training: Online Training: A Bundle Of APB's Best
Systemizing a Residential Construction Financials Templates, Checklists and
Building Company Benchmarks Cheat Sheets
SCAN HERE TO GET YOUR FREE COPY

SORCI 2024 CONTENTS MENU
Contents
WHAT’S
INSIDE
04 Executive Summary
06 Key Issues & Snapshots
08 Profile of Participants
2 The Association of Professional Builders
SORCI 2024 CONTENTS MENU
18 Sales
28 Marketing
36 Advertising
47 Projects
56 Technology
66 Financials
82 Planning
87 Team
95 Training
104 Glossary
SORCI 2024 EXECUTIVE SUMMARY MENU
Executive
Summary
The State of Residential
Construction Industry (SORCI) The United States residential construction industry
Report was prepared by the exhibited resilience in 2023 with a steady demand for new
housing, particularly in suburban and rural areas. However,
Association of Professional rising interest rates led to a slight cooling in the housing
market by mid-year. Technological advancements,
Builders (APB) who surveyed particularly in modular and prefabricated construction,
residential home builders gained traction, reflecting a growing interest in innovation
and efficiency.
operating in the United States,
The industry also witnessed a trend towards multi-
Australia, Canada and New generational housing, catering to changing demographic
Zealand. needs. Builders faced a slowdown in lead flow and
sales, particularly affecting custom home builders, who
increasingly pivoted towards renovations and smaller
APB works exclusively with the owners and directors
projects.
of medium-sized residential home building companies
that focus on new homes or large renovation/remodeling The Canadian residential construction sector saw a
projects. APB’s goal is to improve the construction significant shift towards renovation and retrofitting
industry for both builders and consumers by helping more existing homes in 2023. This trend was driven by an
building companies become systemized. increased interest in energy efficiency and green building
practices among consumers.
By systemizing their businesses, using the processes
and templates provided by APB, builders can grow The market for new home construction remained stable,
their margins and/or sales revenue and deliver a better but the high cost of living and stringent mortgage rules
experience to their clients. slightly dampened demand. Labor shortages, though
less severe than in previous years, continued to pose
This report was commissioned to gather a deeper insight
a challenge. Builders responded by diversifying their
into the residential construction industry and spot
offerings and exploring new market segments, including
emerging trends so that building company owners can
remodeling and energy-efficient upgrades.
benchmark their businesses against industry standards.

Builders faced a slowdown in Across all four countries, 2023 marked a significant
lead flow and sales, particularly focus on mental health and work-life balance within
the industry. Companies that invested in employee
affecting custom home builders, well-being and adopted flexible work policies saw lower
who increasingly pivoted towards turnover rates, indicating a shift in workplace culture. The
challenges of previous years, including the pandemic and
renovations and smaller projects. economic uncertainties, had underscored the importance
of addressing mental health in the workplace.
Australia experienced a year of cautious optimism
in residential construction throughout 2023. The Labor shortages, though less
stabilization of material prices provided some relief, but
the sector continued to struggle with financing challenges, severe than in previous years,
especially for lower-end projects. Labor shortages
remained a persistent issue, hampering recruitment
continued to pose a challenge.
efforts and pushing wages upward. As the year progressed, the industry showed signs
Despite these challenges, niche builders experienced of adaptation and resilience. A notable shift towards
relative success, adapting to the market by focusing on sustainability and technological innovation was observed
renovation projects and custom builds. Government across the board. While some challenges from 2022
investment in infrastructure and housing projects lingered, such as supply chain disruptions and labor
offered some support, but the overall market confidence shortages, there was a cautious optimism for gradual
remained low, with clients hesitant to commit to new improvement and growth in the sector.
contracts. Builders who had adopted efficient practices This optimism was tempered by the realization that
and sustainable building methods reported moderate the industry would need to continue evolving to meet
growth, indicating a shift towards more resilient business changing market demands and navigate economic
models. uncertainties.
In New Zealand, the focus for 2023 was on sustainable In conclusion, the residential construction industry in
and affordable housing. The government’s initiatives to Australia, New Zealand, Canada and the United States in
encourage first-time home buyers and the construction 2023 was defined by a complex interplay of economic,
of eco-friendly homes positively impacted the industry. regulatory and market factors. Each country faced its
However, builders faced ongoing challenges with own unique set of challenges and opportunities, but the
supply chain disruptions, leading to delays in project overarching themes of resilience, adaptation, and a focus
completions. Despite these hurdles, there was a clear on sustainability and mental health were prevalent across
commitment from both the government and private the board. The industry’s response to these challenges
sector to address housing affordability and sustainability, will likely shape its trajectory in the future.
which may set a precedent for future developments in the
industry.

SORCI 2024 KEY ISSUES & SNAPSHOTS MENU
Key Issues
& Snapshots
Key Optimism is back!
Points Marketing remains a missed opportunity.
92.4% of builders are looking

at inaccurate financial reports.
Optimism is back! Despite a general optimism for the future, this wasn’t
Despite continued uncertainty in the world with rising always reflected in the tangible actions of building
interest rates, labor shortages and war, residential home company owners, with 64.1% of respondents neglecting to
builders are increasingly optimistic about the year ahead, have a business plan in place for the next three years!
with 76.9% of company owners expecting to grow their
As many builders in New Zealand discovered this year,
businesses in 2024.
complacency in planning and not investing in their
More importantly, almost half (49.8%) of all builders building company’s future can be catastrophic. When the
surveyed expect to achieve 10% or more in net profit from market shifts, it can swiftly impact a building company’s
the projects they deliver over the next 12 months, which sustainability.
is quite incredible given the ongoing profit challenges
experienced by their larger rivals in the industry. Similarly,
52% of builders also plan to pay themselves more in 2024.
Marketing remains a missed
The 2023 SORCI Report highlighted the increased opportunity
adoption of technology by the sector, enabling builders The SORCI survey revealed a continued decline in
to streamline their operations and deliver the majority marketing efforts, particularly social media engagement
of projects on time despite ongoing supply chain issues. and content creation. Alarmingly, 43.5% of builders still
This trend is expected to continue, with 31% of builders neglect Facebook, an increase from the previous year’s
anticipating an increase in their technology budget in 41.2%. Instagram and YouTube also see low activity from
2024. builders, especially in New Zealand and the United States.
The mental health of 79.1% of respondents either Content creation for blogs is another missed opportunity,
improved or stayed the same in 2023, highlighting a with two-thirds (66.5%) of builders not writing a single
positive shift in mindset among builders with an optimistic article over the year. Interestingly, there’s a direct
future on the horizon. correlation between marketing and profit margins.

SORCI 2024 KEY ISSUES & SNAPSHOTS MENU
92.4% of builders are looking at

inaccurate financial reports
The survey also revealed concerning trends in the
financial literacy of builders, exposing a significant gap
in the understanding of crucial financial concepts. While
68.3% of builders correctly understand the difference
between markup and margin—an improvement from
38%
previous years—there’s still a lack of regular monitoring
of gross margins on projects. This oversight impacts
builders’ abilities to identify problems and manage cost
overruns effectively.
More than a third of builders Despite a promising trend of increasing net profit
margins, with 49.8% of companies expecting double-
don’t advertise, creating digit profits in 2024, the industry’s grasp on construction
a missed opportunity to financials remains inadequate. Only about half (52.3%)
of the builders surveyed produce monthly reports, and
produce better quality leads. worryingly, just 7.6% accurately understand the work in
progress (WIP) calculation. This misunderstanding is more
pronounced in the United States, with only 4.1% of builders
answering correctly, compared to 13.5% in Australia.
Builders who frequently blog, The majority of builders, 92.4%, are potentially looking
at inaccurate financial reports due to this critical gap
posting at least 12 articles annually, in understanding WIP. This miscalculation could lead
show significantly higher markups to significant financial discrepancies, impacting both
tax obligations and overall business health. Regular WIP
(33%-plus in contracts) compared calculations are essential for accurate financial reporting,
to those who only contribute, at yet only 30.7% of builders do this monthly.
Overall, the data points to an urgent need for improved
most, one article annually. financial literacy among builders, particularly in areas
like the WIP calculation, to ensure accurate reporting
Despite 45.9% of building companies stating that
and sustainable business practices. This improvement
generating quality leads was a major problem in 2023,
is crucial for the industry’s long-term health, given the
38% of respondents do not engage in paid advertising.
direct impact of financial management on a company’s
Those who do advertise mainly use Facebook, Instagram,
profitability and viability.
and Google Ads, with a declining trend in radio, TV, and
print media.
Customer Relationship Management (CRM) usage also
remains low, with only 45.4% of builders using systems to
automatically follow up leads. Without paid advertising
to attract new leads and technology to capture their
information and nurture those leads, it’s no wonder that
builders are facing lead-quality challenges. Marketing
can’t simply be turned on and off whenever it’s needed.
The data underscored a critical insight: builders investing
3% of their revenue in marketing see better gross and net
profit margins. Yet, more than a third of builders (38%)
92.4%
don’t advertise, creating a missed opportunity to produce
better quality leads. of builders are potentially
Interestingly, many of the builders that invested in looking at inaccurate
marketing spent more than they expected. This is likely
due to a softening market and sales challenges from financial reports due to a
mid-year onwards. So, there is an understanding of the
importance of marketing, but there still remains a need
critical gap in understanding
for more strategic budget planning and consistency work in progress.
in investing in marketing strategies, which reduces its
effectiveness.

SORCI 2024 Profile of participants MENU
Profile of
Participants
The 2023 SORCI survey revealed Australian and New Zealand builders still lag behind
the United States and Canada in terms of how many
detailed insights into 1,817 building companies follow the recommended, and certainly, the
most profitable business model, which is Design and Build,
companies from the United compared to quoting clients’ plans.
States, Australia, Canada and In both Australia and New Zealand, around 44% (44.7%
New Zealand. and 44.4% respectively) of builders still quote plans
rather than controlling the design process. This number
is even higher for remodelers when compared with new
This was a significant increase on the 1,110 builders that
home builders. By comparison, only 16.3% of builders in
took part in the 2022 survey, largely due to the efforts
the United States follow this business model. Quoting
of our industry partners including Buildertrend, Houzz
plans results in builders giving their time away for free and
Pro, CBUSA, Buildxact and BuildTools who all played an
cutting margins to win jobs.
important part in the data collection process.
A big opportunity awaits those builders who are prepared
All of the information compiled in this report has been
to learn from their counterparts across the Pacific Ocean.
provided by owners, directors, presidents and senior
managers with access to detailed information across
marketing, sales, operations and the financials of their
respective building companies. The data also supported
Almost two-thirds (63.1%) of the respondents that Design and Build is more
predominantly focused on building new homes, while
around one-third (36.9%) focused on large scale
profitable, with 65.5% more
renovation projects, all with an average contract value in builders applying markups of
excess of $100,000.
25% or more, compared with the
There was a change in the mix of building companies
representing Canada. Last year, Canadian respondents builders quoting clients’ plans.
were closer to a 50/50 split between new homes and
renovations (52.9% and 47.1%). This year, the number of
builders focusing on new homes increased to 60.4%. Staying on the business model, a big swing was observed
in New Zealand with builders moving away from cost plus
In terms of the business model being used by residential to fixed price contracts, bringing it in line with the other
home builders, there was an increase in the number of countries studied.
builders doing spec homes which now stands at 6.6% of
respondents versus 4.7% a year ago—a 40.4% rise. Australian builders continue to lead the way, with 85.7% of
builders using fixed price contracts, a slight increase from
However, the reverse was seen in Canada and New last year.
Zealand where economic conditions have been far
tougher and there was a decrease in builders focusing on
spec homes.

Again, the data supported the use of fixed price contracts

by revealing that over four times as many builders using
this type of contract were able to apply a markup of 33%-
plus to their contracts compared to builders using cost
plus contracts.
A new question for 2023 explored the number of family
businesses in the industry. Almost half (48.1%) of all
building companies are either in partnership with a family
member or directly employ family members.
48.1%
This percentage does appear quite high. However, at this Almost half of all building
stage, APB does not have any supporting data from other
industries to provide a comparison. companies are either in
A drop in association membership was observed across partnership with a family
all four countries. The change was most apparent in North
America, where the number of building companies not
member or directly employ
members of any association increased by 52.7% in the family members.
United States and by 146.6% in Canada!
This could be linked to builders experiencing increased This could be because there are two very established
cash flow challenges and therefore looking to reduce their associations operating in Australia (Master Builders and
fixed expenses. the Housing Industry Association) compared to just one in
the United States (National Association of Home Builders)
However, despite the drop in membership across the
and one in Canada (Canadian Home Builders Association).
United States, Canada, and even New Zealand, this trend
was not seen in Australia, where 91% of Australian building There appears to be a big opportunity for the
companies still belong to an association compared to just associations in North America and New Zealand to
32.1% of Canadian builders and 57.5% of United States increase membership based on the success enjoyed by
builders. the Australian associations.

Essential Data &
Trends for Home
Builders
— Rich Binsacca, Editorial Director, Custom Builder and Pro Builder Media
Welcome to the 2024 edition of the SORCI Report, a Do you have a documented sales process? Over 40% of
comprehensive study of current business practices your peers do. Are you among the 50.3% of builders that
among home builders in the United States, Canada, post to Facebook at least once a week as part of their
Australia, and New Zealand. marketing efforts? Do you use cost escalation clauses in
your contracts? Half of the surveyed builders don’t. How
Custom Builder and Pro Builder Media are proud to
much did you invest in business software in 2023? Nearly
support APB in its annual research study, as it provides an
74.7% of builders spent up to $10,000 on software. What
important and impactful opportunity for home builders
are your greatest challenges to be profitable? What’s the
to benchmark their building company against their
number one thing you want to improve upon in 2024?
peers across multiple operational activities, from sales
and marketing to financials, business software, strategic All that and much, much more is in this report. We
planning, and training. hope you not only read it but really dive into the details
to uncover its value as a business tool for any home-
Offering highly detailed, data-driven insights, the
building business.
SORCI Report is a must-have for any home-building
executive and a key component to improving awareness,
consideration, and implementation of best business
practices for our industry.

Which country What is

do you operate in? Your age?
New Zealand
3.8% Under 25 0.1%
Canada
7.5%
25 - 29 4.2%
United States
30 - 39 25.9%
54.4%
40 - 55 41.7%
Australia Over 55
28.0%
34.4%
What is your role in the business?

OWNER/DIRECTOR/
PRESIDENT
87.6%
SENIOR
MANAGEMENT
12.4%
ANSWERS BY LOCATION:
OWNER/DIRECTOR/PRESIDENT
CHOICES UNITED STATES AUSTRALIA CANADA NEW ZEALAND

New homes 85.8% 88.4% 75.0% 88.2%
Remodeling / renovations 86.4% 94.3% 90.5% 100.0%
SENIOR MANAGEMENT

New homes 14.2% 11.6% 25.0% 11.8%

What type of work do you primarily target?
New homes
63.1%
Remodeling/
renovations
36.9%
Choices UNITED STATES AUSTRALIA CANADA NEW ZEALAND

New homes 67.6% 56.6% 60.4% 63.0%

What is your business model?
64.2%
27.7%
6.6%
1.4%
DESIGN & BUILD QUOTING PLANS SPEC HOMES I DON’T KNOW
ANSWERS BY LOCATION
NEW HOMES
Choices: UNITED STATES AUSTRALIA CANADA NEW ZEALAND
Design & build 67.4% 67.4% 71.9% 52.9%
Quoting plans 16.1% 29.7% 25.0% 41.2%
Spec homes 14.9% 2.9% 3.1% 5.9%
I don’t know 1.5% 0.0% 0.0% 0.0%
REMODELING / RENOVATIONS
Design & build 79.2% 34.0% 76.2% 40.0%
Quoting plans 16.8% 64.2% 23.8% 50.0%
Spec homes 1.6% 0.0% 0.0% 0.0%
I don’t know 2.4% 1.9% 0.0% 10.0%

What type 67.6%

of building
contract
do you use?
29.7%
2.7%
COST PLUS /
FIXED PRICE I DON’T KNOW
OPEN BOOK
NEW HOMES

Fixed price 57.1% 87.0% 56.3% 70.6%
Cost plus / open book 38.7% 13.0% 40.6% 29.4%
I don’t know 4.2% 0.0% 3.1% 0.0%

Fixed price 58.4% 84.0% 66.7% 50.0%
Cost plus / open book 36.8% 16.0% 28.6% 50.0%
I don’t know 4.8% 0.0% 4.8% 0.0%
Do you belong NO 97.5%

to a franchise?
YES 2.5%

How many projects do What is the contract value

you start each year of those jobs each year
(on average)? (on average)?
1-5 39.3% $100K -

$299K
25.1%
6 - 12 29.4% $300K -
$599K
24.9%
13 - 25 15.6% $600K -
$999K
23.5%
26 - 49 7.3% $1M+ 25.2%
I DON’T
50 - 99 5.4% KNOW
1.3%
100+ 2.3%
I DON’T
KNOW
0.7%
Are you in business with a family member

(ie your spouse, parent, sibling, child)?
NO 51.7%
I’M IN A PARTNERSHIP
WITH FAMILY MEMBERS 28.7%
I EMPLOY
FAMILY MEMBERS 19.4%
I DON’T KNOW 0.1%

What associations are you a member of?*

®
OTHER
27.3% 25.9% 21.7% 16.8% 2.0% 1.8% 1.1% 10.0% 24.2% 2.3%

National Association of Home Builders (NAHB) 50.3% 0.0% 0.0% 0.0%
Association of Professional Builders (APB) 14.5% 42.6% 28.3% 33.3%
Master Builders Australia (MBA) 0.0% 63.1% 0.0% 0.0%
Housing Industry Association (HIA) 0.0% 48.8% 0.0% 0.0%
Canadian Home Builders’ Association (CHBA) 0.0% 0.0% 26.4% 0.0%
New Zealand Certified Builders Association (NZCB) 0.0% 0.0% 0.0% 48.1%
Registered Master Builders (New Zealand) 0.0% 0.0% 0.0% 29.6%
Other 14.5% 3.7% 9.4% 3.7%
None 33.9% 5.3% 43.4% 18.5%
I don’t know 3.1% 0.4% 5.7% 0.0%
*Respondents were able to select more than one option in this question so results will not equal 100% when doing calculations.

Does your business

have a website?
https://www.yourbusiness.com
YES 87.9%
https://www.yourbusiness.com
NO 12.1%

Yes 87.6% 88.9% 86.8% 85.2%
No 12.4% 11.1% 13.2% 14.8%

SORCI 2024 SALES MENU
Sales
Sales
One alarming trend from this year’s survey was that the There was also a significant drop in the number of building
number of builders with a documented sales process companies that chose to charge for their time when
dropped for the second year, with only 43.9% of building quoting jobs.
companies now following a repeatable process.
In 2023, only 45.6% of builders charged for quotes
The exception to this trend was in New Zealand where compared to 52.2% in 2022. The exception to this trend
builders have experienced a much more challenging year was amongst the builders belonging to the Association
than builders in other countries. This may explain the of Professional Builders, where 65.8% of companies now
increase from 40.3% last year to 48.1% this year as they charge to provide a quote compared to just 38.6% of non-
sought to optimize every single sales opportunity. member companies.
Interestingly, the value of contracts being targeted makes
The importance of having a no difference to whether builders choose to charge for
quotes or not. The split is equally similar for builders
documented and repeatable targeting $1 million-plus contracts as those builders
targeting contracts below $300,000, demonstrating that
sales process was demonstrated the opportunity exists for all residential builders to avoid
by the fact that almost twice as giving away their time for free.
many builders markup their jobs However, what was different was the margin being
achieved by both sets of builders. Companies that
by 33% or more when they have charged for quotes enjoyed significantly higher margins
a sales process compared to than those that quoted for free.
The number of builders holding sales training also
those who do not. declined over the past year from 20.2% in 2022 to 18.2%
in 2023, as did the use of an objections manual, with
Another concerning statistic is that 65.4% of the builders just 7.7% of building companies utilizing this sales tool
who are not using a documented sales process also do compared with 8.2% in 2022.
not know their net profit margins.
Generating quality leads is considered the biggest sales
After seeing the decline in the number of builders roadblock with 45.5% of builders citing this as their
operating a sales process, it was unsurprising to also see number one challenge. This is more than the number of
a decline in the number of builders using sales scripts, builders that pointed to qualifying or closing leads as their
which dropped from 25% last year to just 19.6% this year. biggest challenge, which suggests that a lot of builders
Even in New Zealand, where sales have been difficult, perceive their lack of sales to be a marketing issue.
builders have still not taken advantage of this opportunity Perhaps why so few have been looking to improve their
to close more deals, with just 18.5% of companies using sales systems and processes in the past 12 months.
scripts.

One intriguing statistic revealed that a will be unable to maintain both their gross and net
staggering 86% of respondents who identified margins when the number of new leads fluctuates.
closing sales as their primary sales challenge
Meanwhile, builders with an established paid
did not possess an objections manual.
advertising strategy are always able to increase
It was a similar story for those respondents the number of inquiries they receive each week
who pointed to qualifying leads as their biggest as and when required.
sales challenge, with 57.7% of those respondents
At the end of 2022, despite the threat of interest
not having a documented sales process.
rate rises, 46.2% of builders still expected to sign
The problems businesses face have often been solved, more contracts in 2023 than they did in 2022.
and it’s just a matter of applying the correct solution. Unfortunately, the softening demand throughout
the year resulted in those expectations not being
met, particularly in New Zealand where 48.4%
Almost half (48.7%) of builders expected an increase but only 25.9% achieved it.
still rely on referrals for more Over half (51.9%) of New Zealand’s builders
experienced a decline in sales during 2023 compared
than 50% of their sales, which to the average of 32.4% of builders in other countries.
is very risky, especially as the This was further evidence that the construction
industry in New Zealand was hit far harder than
market continues to cool. other countries over the past 12 months. However, a
recent change in government has sparked renewed
This figure is slightly down from 51.1% last year, optimism in New Zealand, with a staggering 70.4%
however, it still poses a significant threat to of building companies expecting 2024 to be a much
a large number of building companies. better year than the one they just experienced.
Supply and demand is the key to profitability, so Across Australia, Canada and the United States,
generating excess demand through paid advertising expectations are similar with around 58% of building
is an important strategy for every building companies expecting growth, meaning the industry
company, if they want to survive in the long term. is much more confident about the future than it was
12 months ago. Only 9.4% of respondents across all
There is no question that referrals are great
four countries expect tougher times ahead, which
leads that enjoy extremely high conversion rates
compares favorably to last year when 20.4% of
compared to cold leads. However, builders that rely
builders were preparing themselves for lower sales.
on referrals for a large percentage of their sales
Do you charge for quotes (either as part of a

design process, or as a standalone service)?
YES 45.6%
NO 53.5%
I DON’T KNOW 0.8%

Yes 38.9% 56.1% 37.7% 63.0%
No 59.8% 43.9% 60.4% 37.0%
I don’t know 1.3% 0.0% 1.9% 0.0%

AD
Do you have a documented Do you use sales scripts?

sales process?
I DON’T KNOW I DON’T KNOW
2.1% 2.5%
YES YES
43.9% 19.6%
No NO
53.9% 77.9%

Do you hold and/or Do you have an objections

participate in regular manual?
sales training?
0.6% 2.4%
YES YES
18.2% 7.7%
NO NO
81.3% 89.9%
What is your biggest sales challenge?

GENERATING
QUALITY LEADS
45.5%
QUALIFYING
LEADS/INQUIRIES
18.3%
CLOSING
SALES 17.0%
I DON’T KNOW 15.6%
OTHER 3.5%

What percentage of your sales

are from referrals?
38.9%
21.5%
12.3% 9.9%
6.6% 6.1%
4.8%
0% 6% 11% 21% 51% I DON’T

100%
- 5% - 10% - 20% - 50% - 99% KNOW
How many referrals do you need

in order to sign one contract?
61.5%
21.4%
11.8%
4.1% 0.8% 0.3%
I DON’T
1-3 4-9 10 - 24 25 - 99 100+
KNOW

What percentage of your leads

are sales qualified leads?
7.3% 3.0% 4.5% 8.3%
< 1% 1% - 3% 4% - 9% 10% - 15%
14.8% 34.2% 2.7% 25.2%
16% - 24% 25% - 99% 100% I DON’T KNOW

< 1% 6.7% 7.8% 5.7% 14.8%
1% - 3% 3.1% 3.3% 0.0% 3.7%
4% - 9% 3.9% 5.7% 3.8% 3.7%
10% - 15% 8.5% 7.4% 7.5% 14.8%
16% - 24% 13.7% 15.2% 18.9% 18.5%
25% - 99% 36.3% 31.6% 34.0% 29.6%
100% 2.3% 3.7% 1.9% 0.0%
I don’t know 25.4% 25.4% 28.3% 14.8%

How many paid leads do you need

in order to sign one contract?
53.1%
41.1%
3.7%
1.4% 0.7%
1 - 50 51 - 100 101 - 200 201+ I don’t know
25
Did you sign more or less contracts

in 2023 compared to 2022?
38.5% 32.7% 25.8% 3.1%

I DON’T
MORE LESS SAME
KNOW

More 39.4% 39.3% 34.0% 25.9%
Less 32.4% 30.7% 34.0% 51.9%
Same 25.1% 27.0% 26.4% 22.2%
I don’t know 3.1% 2.9% 5.7% 0.0%
Do you expect to sign more or less

contracts in 2024 compared to 2023?
58.2% 9.4% 23.7% 8.7%

I DON’T
MORE LESS SAME
KNOW

Builders Continue
to Ignore the Low-
Hanging Fruit
— Rick Storlie, Chief Lead Converter, Builder Lead Converter
As we peer into how builders are feeling about 2024, we
see a lot of similarities to 2023. The number one marketing
Your roadmap
challenge continues to be generating quality leads If you’re ready to start investing back into your company,
(45.9%), and when combined with the goal of generating start with a roadmap. A marketing roadmap should
enough leads, 58% of builders rate these two issues as include:
their top two marketing challenges. • your offer (the compelling reason a lead would engage
with your company)
• follow-up plan (the process you will follow to convert a
Where to start? captured lead to a phone appointment)
Consider this, 54.6% of builders don’t use a Customer • an if/then plan (if the lead does/does not take a specific
Relationship Management (CRM) system (meaning they action, then you will/will not do this)
don’t have a meaningful database of unsold leads), • database management (how you’ll nurture and re-
and only 17.7% communicate to their database at least engage cold leads to establish trust and value for your
monthly. services).
In my 30 years of tracking conversions based on lead
sources, here is where I’ve found the most buyers: Crawl, walk and then run
• client referrals and repeat customers Every successful marketing initiative starts with a great
• professional referrals (Realtors, Architects, Lenders, foundation. Putting a marketing roadmap in place is
Trade Partners, etc.) essential for any builder looking for more and better
• organic website traffic (through search rankings, not quality leads.
paid placement)
• walk-in traffic/sign calls
• paid advertising (online and print). Scan here to view
Builder Lead Converter’s
I regularly see builders selling leads they captured months APB Rewards Offer
and even years prior to signing a contract. Trust and value
were established through a nurturing program where the
builder strategically established themselves as the ‘go-to’
choice in their local market. They not only made the sale,
but they did it with higher margins.

SORCI 2024 MARKETING MENU
Marketing
Marketing
One of the key insights from the 2023 SORCI Report
was the decline in marketing activity, with social media
posting, email usage, and content creation all declining.
Of the building companies that posted at least 12 articles
per year, 32.4% achieved a markup of 33% or more on
their contracts. In contrast, only 6.5% of companies that
published just one blog post per year managed to attain
Unfortunately, that trend has not reversed in the 2024
such high profit levels. Yet, two-thirds (66.5%) of builders
SORCI Report despite 45.9% of building companies saying
did not create a single article during the year!
that generating quality leads was their biggest challenge.
CRM usage also remained low in 2023, with only 45.4%
Facebook is still being neglected with 43.5% of builders
of builders using a system to follow up their leads
admitting they never post on the platform, which is
automatically. Of the builders using a CRM system, the
up from 41.2% the year prior. It was a similar story on
most popular choice was Buildertrend, which was used by
Instagram, with more than half (50.8%) of builders in the
13% of those builders, closely followed by Houzz Pro and
United States completely overlooking it, and YouTube
HubSpot with 12.1% each.
experiencing extremely low uptake by residential building
companies across all countries. Overall, there is continued underutilization of digital
marketing among builders, directly impacting their
There’s a well-known saying in profitability. Despite the proven benefits of consistent
online engagement and CRM usage, many builders
business, “Margins are linked to remain hesitant to adopt these strategies. This highlights
marketing.” The data substantiated a significant opportunity for builders who are willing to
invest more in marketing.
this adage, showing a strong
correlation between the number
of blog articles published by
builders and their profit margins.

How frequently do you post on the

following social media platforms?
Facebook:

Never 42.7% 45.1% 45.3% 37.0%
Once per week 30.3% 29.5% 15.1% 44.4%
Between 2 - 6 times per week 18.1% 18.4% 28.3% 14.8%
7 or more times per week 2.1% 2.0% 1.9% 0.0%
I don’t know 6.7% 4.9% 9.4% 3.7%
Instagram:

Never 50.8% 36.5% 35.8% 51.9%
Once per week 25.4% 33.6% 24.5% 33.3%
Between 2 - 6 times per week 15.8% 22.5% 28.3% 7.4%
7 or more times per week 2.3% 2.0% 3.8% 0.0%
I don’t know 5.7% 5.3% 7.5% 7.4%
YouTube:

Never 85.8% 88.9% 88.7% 92.6%
Once per month 6.0% 7.0% 3.8% 3.7%
Between 2 - 3 times per month 1.3% 1.2% 3.8% 0.0%
4 or more times per month 1.6% 1.2% 0.0% 3.7%
I don’t know 5.4% 1.6% 3.8% 0.0%

How frequently do you publish Who writes your

a new content article/blog articles/blogs?
post each year?
NEVER 66.5%
1 4.4% 65.0%
IN-HOUSE
2-6 15.5%
5.5% 34.6%
7 - 11
0.5% OUTSOURCED
I DON’T KNOW
12+ 5.2%
I DON’T
KNOW 3.0%

What Customer Relationship Management

(CRM) system do you use?
54.6% 15.2% 5.9% 5.5% 5.5% 4.8% 3.2% 3.1% 1.3% 0.8%
NONE
OTHER
BUILDERTREND
HOUZZ PRO
HUBSPOT
I DON’T KNOW
MAILCHIMP
SMARTER CRM
ACTIVECAMPAIGN
LASSO (ECI)

None 53.9% 57.0% 54.7% 44.4%
Other 13.7% 16.3% 20.8% 14.8%
Buildertrend 6.7% 4.1% 9.4% 3.7%
Houzz Pro 8.5% 1.2% 3.8% 3.7%
HubSpot 7.5% 3.3% 1.9% 3.7%
I don't know 4.9% 4.9% 3.8% 3.7%
Mailchimp 2.6% 2.0% 5.7% 18.5%
Smarter CRM 0.0% 8.6% 0.0% 3.7%
ActiveCampaign 0.5% 2.5% 0.0% 3.7%
Lasso (ECI) 1.6% 0.0% 0.0% 0.0%

How frequently do you

email your database?
58.7%
16.2%
10.1%
4.2% 2.0% 1.4% 7.3%
ONCE PER ONCE PER 2 - 6 TIMES

NEVER SOMETIMES DAILY I DON’T KNOW
MONTH WEEK PER WEEK
What is your biggest

marketing challenge?
45.9%
12.1% 11.0% 6.8% 3.0% 21.3%
GENERATING GENERATING RETURN ON WASTED OTHER I DON’T
ENOUGH LEADS QUALITY LEADS INVESTMENT ADVERTISING KNOW
(ROI) SPEND

Generating enough leads 11.4% 11.1% 17.0% 22.2%
Generating quality leads 46.6% 44.3% 49.1% 44.4%
Return on investment (ROI) 11.1% 11.5% 9.4% 7.4%
Wasted advertising spend 6.7% 7.4% 5.7% 3.7%
Other 3.4% 1.6% 3.8% 7.4%
I don’t know 20.7% 24.2% 15.1% 14.8%

What is your primary marketing strategy

(eg your lead magnet) for generating new leads?
CONSULTATION 22.1%
CONTACT US
PAGE
22.0%
FREE QUOTE 7.9%
FREE GUIDE 6.2%
PLAN RANGE 3.4%
OTHER 13.1%
I DON’T KNOW 25.4%

The Referral Trap:
A Comfortable Path
to Mediocre Margins
— Peter Butler, Managing Director, Smarter Websites
& Scott Bywater, Founder, Copywriting That Sells
In the ever-evolving landscape of the residential A key component of this success is a robust digital
construction industry, the ability to generate quality leads presence underpinned by content marketing and social
is paramount. The 2024 SORCI Report reveals a startling media engagement. Despite the proven effectiveness
statistic: 45.9% of builders identify generating quality of these platforms, 44.8% of builders never post on
leads as their primary marketing challenge. This is a Instagram, 87.3% never post on YouTube, 66.5% don’t
significant hurdle, especially considering 48.4% of builders engage in sharing articles or blogs, and 58.7% never email
primarily rely on referrals, a method that, while effective, their database. This inactivity is a missed opportunity, as
lacks predictability and scalability. the Content Marketing Institute highlights that content
marketing can generate three times as many leads as
Referrals can be a double-edged sword. They offer a
traditional outbound marketing and at 62% less cost1.
clear path to contract signings, with 61.5% of builders
needing just 1-3 referrals to secure a deal. However, HubSpot’s research further underscores the power
their unpredictable nature can lead builders to accept of blogging, revealing that businesses engaging in this
contracts at lower margins. practice see a 165% increase in lead growth2. In an
era marked by rising inflation and interest rates, the
APB challenges this status quo. Even though 65.6% of
builders set to thrive in 2024 are those who recognize
builders spent 1% or less of their revenue on marketing
a strong digital footprint is not just a tool; it’s a frontline
in 2023, the APB advocates for an investment of between
salesperson, distinguishing them from competitors.
1-3% of revenue into marketing and advertising, a strategy
proven successful time and time again. Embracing this
approach, many building companies have been able to Scan here to access the free
markup their projects by 33% or more. report “Set Yourself Up as an
Authority: Close More High-
Value Building Contracts”
1 Mizrachi, Sophie. “10 Statistics to Get Your Board On-Board With Content Marketing.” Semetrical, 15 June 2023, www.semetrical.com/content-marketing-
statistics/#:~:text=Content%20marketing%20generates%203x%20the,generate%20the%20highest%20ROI%20possible.
2 Zhu, Lily. “Blogging Businesses Experience 126% Higher Lead Growth Than Non-Blogging Businesses.” HubSpot, 18 Oct. 2015, blog.hubspot.com/blog/tabid/6307/bid/5519/blogging-
businesses-experience-126-higher-lead-growth-than-non-blogging-businesses.aspx. Accessed 6 Feb. 2024.

Win High Margin Building Contracts With a
Website Engineered forLead Generation
In the competitive world of residential construction, having a website that merely
showcases your projects is no longer enough.
Smarter Websites, led by digital maestro Peter Butler, goes beyond the norm to create
websites that don’t just impress – they perform.
Unlike typical web agencies fixated on branding and aesthetics, Smarter Websites focuses
on what truly matters – generating and qualifying new leads. Their approach is not about
creating an online brochure; it’s about building a dynamic, interactive platform that
actively works to grow your business.
Smarter
W E B S I T E S
Online Brochure vs. a Lead Generation Website
An online brochure is a passive display, a digital version of a printed brochure that
waits to be seen. In contrast, a Smarter Website is a lead generation engine designed to
WEB SEO CRM engage visitors, capture their interest, and convert them into qualified leads. With our
strategic design and copywriting partners, your website becomes a proactive participant
in business growth, attracting more leads, filtering out tire-kickers, and connecting you with
quality clients.
The Importance of Integrating a CRM

In the residential building industry, trust is paramount. Smarter Websites can be integrated
with advanced CRM systems (with builder reports and email templates already included),
ensuring every visitor’s journey is tracked, nurtured, and personalized.
This integration builds trust over time, transforming casual visitors into loyal clients.
AD
With Smarter Websites, you’re not just getting
a website; you’re getting a comprehensive digital An invitation for APB members to
ecosystem that understands the nuances of the e-Meet Smarter Websites
residential construction industry. build your building business.
Ready for an easier workday with a website

that works as hard as you do?
Discover the Smarter CRM difference. Book a demo
+61 481 613 997 today to see a live website and CRM integration
Peter Butler, Director of Smarter Websites in action, including the speed to lead system -
and how responding within the first minute can
“Peter Butler is the most systemized, organized and increase your conversion rate by 391%.
structured digital operator I’ve met. If you’re looking
for someone to help you ‘connect the dots’ online Make no mistake, a whopping 30% of your leads
- including your website, SEO, content marketing will go to your competitors if you don’t respond
and CRM, I can’t recommend him highly enough.” quickly enough. Don’t let this happen - leverage
Peter and the team at Smarter Websites to nurture
Russ Stephens leads, scale personal relationships, and elevate
Co-Founder | APB your business.
https://www.smarterwebsites.com.au/apb/ Use your phone’s camera to scan
Ryan Stannard Jackson Digney Keiron Moore David Prior

Stannard Family Homes Enduro Builders CKS Projects David Prior Homes
“Smarter Websites relaunched our web- “We engaged Smarter CRM because we “Smarter Websites are truly the best in the “This new website has given potential
site. We love it, but what is most noticeable saw a lot more potential and functionality business, from our initial brief right through clients so much information about how
is between the new design layout and with their system than the one we were using. to the completion of the website was we work. It’s not just photos of houses
The team made the whole process a very seamless, we were well informed through- but they can follow a process through to
smooth transition and worked through all out this process and are extremely happy signing up - all in one place. Great service
higher calibre of enquiry...” of the normal stumbling blocks quickly and with the new website and its performance.” from all the techs and speedy replies to our
questions.”
Google review Google review Google review Google review
SORCI 2024 Advertising MENU
Advertising
Advertising
Given that so many building The survey indicated that builders allocating 3% of their
revenue to marketing achieve notably higher net profit
companies are finding it hard to margins of over 15%. This suggests a direct correlation
between strategic marketing investment and financial
attract quality leads, it is surprising success.
that so few builders are investing Investing in paid marketing is particularly crucial in a
in paid advertising campaigns, competitive market, where visibility and brand presence
can significantly impact a builder’s ability to attract and
with 38% of respondents claiming retain the best clients. Digital channels provide cost-
effective visibility and granular targeting, making them a
they do not advertise. critical component of a builder’s marketing budget.
The most popular channels remained the same as The reluctance of residential builders to engage in paid
the findings in the 2023 SORCI Report, with Facebook, advertising reflects a cautious approach in an evolving
Instagram, and Google Ads topping the rankings and radio, market.
TV and print continuing their decline in popularity. Hesitance could stem from budget constraints, a lack
A trend in outsourcing advertising among residential of understanding of the digital landscape, or skepticism
builders signifies a strategic shift towards specialized about the return on investment of advertising.
expertise. As digital marketing becomes more complex, The industry’s cyclical nature and regional variability
builders recognize the benefits of engaging experts who also influence marketing decisions. Builders in a booming
can navigate the nuances of platforms like Google and market might rely more on word of mouth and existing
Facebook. reputation, while those in a competitive or declining
Outsourcing ensures more effective and targeted market might recognize the need for more aggressive
campaigns and allows builders to focus on their core marketing strategies to attract clients.
competencies. With 42.2% of builders outsourcing Understanding these dynamics is vital for builders to
Facebook campaigns and an even higher 60% for Google, adapt their marketing strategies effectively.
it’s clear that builders value the efficiency and expertise
these third-party services offer.

AD
The #1 Checklist For
Eliminating Price Checkers
& Time Wasters
SCAN HERE TO
DOWNLOAD FOR FREE
Where do you spend money

on advertising?*
29.4% FACEBOOK
20.3% INSTAGRAM
GOOGLE ADS (SEARCH &

26.1% DISPLAY CAMPAIGNS)
1.8% YOUTUBE
9.3% HOUZZ
2.8% RADIO
1.5% TV
NEWS/
13.9% MAGAZINES
14.8% SPONSORSHIPS
9.6% OTHER
I DON’T
38.0% ADVERTISE

Facebook 25.9% 31.6% 30.2% 59.3%
Instagram 14.5% 26.6% 32.1% 22.2%
Google Ads (search and display campaigns) 25.4% 24.6% 30.2% 40.7%
YouTube 1.8% 2.0% 0.0% 3.7%
Houzz 14.8% 1.6% 9.4% 0.0%
Radio 2.3% 2.9% 3.8% 7.4%
TV 1.8% 1.2% 1.9% 0.0%
News/magazines 16.6% 6.6% 20.8% 29.6%
Sponsorships 16.3% 11.5% 15.1% 22.2%
Other 10.9% 7.0% 7.5% 18.5%
I don’t advertise 35.8% 42.6% 43.4% 18.5%
*This question is referring to paid advertising campaigns and not signage or website design.
Respondents were able to select more than one option in this question so results will not equal 100% when doing calculations

Who does your paid 51.2%

advertising on
Facebook?* 42.2%
6.6%
In-house Outsourced I don’t know
*This data excludes respondents who did not select ‘Facebook’ in the
question, “Where do you spend money on advertising?”.

advertising on Google
Ads (search and display 38.4%
campaigns)?*
1.6%
In-house Outsourced I don’t know
*This data excludes respondents who did not select ‘Google Ads (search and display
campaigns)’ in the question, “Where do you spend money on advertising?”.

advertising on
YouTube?* 53.8%
In-house Outsourced
*This data excludes respondents who did not select ‘YouTube’ in the question,
“Where do you spend money on advertising?”.

What percentage of your revenuE

did you spend on marketing in 2023?
0% 1% 2% 3% 4%+ I DON’T
KNOW
28.3% 5.1%
13.1% 5.5%
10.7%
37.3%

0% 23.8% 37.7% 26.4% 11.1%
1% 38.9% 33.6% 37.7% 48.1%
2% 13.0% 13.5% 11.3% 14.8%
3% 6.0% 3.7% 1.9% 11.1%
4%+ 5.7% 4.1% 9.4% 7.4%
I don’t know 12.7% 7.4% 13.2% 7.4%

Did you spend more money on marketing

in 2023 than you did in 2022?
29.0% MORE
8.6% LESS
53.2% SAME
9.2% I DON’T KNOW
What percentage of revenue do you plan to

spend on paid advertising in 2024?
26.1%
20.1%
16.8%
15.2%
11.4% 10.4%
0% 1% 2% 3% 4%+ I DON’T
KNOW

What is your target/ What is your actual cost

budgeted cost per lead? per lead?
$1 - $24 16.3% $1 - $24 13.5%
$25 - $49 8.3% $25 - $49 5.1%
$50 - $74 5.4% $50 - $74 4.9%
$75 - $99 3.1% $75 - $99 2.5%
$100+ 6.8% $100+ 9.2%

I DON’T
KNOW 60.1% I DON’T
KNOW 64.8%
How many leads did you

Generate in 2023?
51.0%
16.1% 16.1%
9.4%
6.1%
1.0% 0.1% 0.3%
0 - 50 51 - 120 121 - 300 301 - 1,001 - 2,501 - I DON’T
5,001+
1,000 2,500 5,000 KNOW

How much do you spend on SEO (Search

Engine OptimiZation) services per month?
56.8%
14.2% 14.9%
5.9% 3.7% 4.5%
$1 - $350 - $750 - I DON’T

$0 $1,250+
$349 $749 $1,249 KNOW
What is your #1 strategy for increasing

the number of referrals you generate?
WORD OF
MOUTH 52.8%
ARCHITECTS 14.5% GIFTING 1.4%
REALTORS 11.0% OTHER OTHER 3.8%
EVENTS I DON’T
(EITHER HOLDING
OR ATTENDING)
5.4% KNOW 11.1%

What percentage of your

leads are from referrals?
0% - 4%
I DON’T KNOW
8.5%
9.4%
5% - 9%
6.1%
80%+
32.5% 10% - 19%
11.1%
20% - 49%
16.5%
50% - 79%
15.9%

0% - 4% 10.6% 5.3% 7.5% 7.4%
5% - 9% 6.5% 5.7% 1.9% 11.1%
10% - 19% 10.6% 12.3% 9.4% 11.1%
20% - 49% 16.1% 16.8% 22.6% 7.4%
50% - 79% 15.3% 14.8% 24.5% 18.5%
80%+ 30.6% 35.7% 28.3% 40.7%
I don’t know 10.4% 9.4% 5.7% 3.7%

How Builders Can Maximize
Profitability On Higher
Revenue Goals In 2024
— Robert Cain, Residential Construction Business Unit Leader, ECI Solutions, BuildTools and Bolt Software
As the residential construction landscape evolves, Implementing strict budget controls with a process in
understanding trends and challenges that are relevant to place will be critical to overcome this challenge. Running
our industry is pivotal for sustainable growth in 2024. The a tight budget driven by trade contractor bids and
2024 SORCI Report revealed key findings that showcase controlled with purchase order agreements to suppliers
how our industry is on the path to success. and trade contractors should be a primary focus for those
who want to improve profit margins and prevent profit
First, an astonishing 57.7% of respondents were uncertain
detractors in 2024.
about calculating the Work In Progress Accounting
Adjustment (WIPAA). This knowledge gap highlights Alarmingly, 61.4% of respondents allocate less than 25%
the need for a system to ensure builders are properly of their time to work on their business rather than in it.
accounting for their costs throughout the project. By This imbalance emphasizes the critical need for strategic
addressing this knowledge gap and investing in financial planning, delegation, and technology systems designed
expertise and purpose-built tools, builders can streamline based on industry-specific best practices to foster long-
their operations and make informed decisions at every term sustainability and scalability.
stage of the project.
In conclusion, to overcome the biggest challenges and
On a very positive note, 76.9% of builders have set increase profitability from higher revenue goals in 2024,
higher revenue targets in 2024 compared to 2023. This builders need to invest in technology designed exclusively
optimistic outlook demonstrates the industry’s resilience for residential construction and, more importantly, their
and growth potential despite prevalent challenges. specific niche. Maximizing the right software will help
Subcontractor delays, client selection decisions and cost builders overcome obstacles, scale profitability, and drive
overruns emerged as the foremost challenges in running sustainable growth in 2024.
projects in 2023. To address these challenges, builders
must prioritize enhanced communication, leverage
appropriate technology solutions, and establish internal Scan here to view
processes tailored to their specific business needs. the ECI BuildTools
Managing budgets was challenging for many builders in APB Rewards Offer
2023, with a concerning 33.9% of respondents reporting
that they exceeded their project budgets consistently.

Project Management
Software Built by
AD
Builders, For Builders

Software for custom home builders and
remodelers that works the way you do
Gain more control over every aspect of ■ Project management and job costing
your business and keep all your project ■ All project communications
information—bids, budgets, schedules, ■ Real-time scheduling updates
photos, documents and communications ■ Estimates/proposals/change orders
available 24/7 from any mobile device. ■ Financial billing statements
Scan the code or visit

the link to schedule
a meeting today!
www2.ecisolutions.com/apb2024
SORCI 2024 PROJECTS MENU
Projects
Projects
In 2023, the residential construction industry witnessed
a significant improvement in supply chain fluidity, which
positively impacted the timely delivery of projects.
The ongoing challenge with subcontractors points to
deeper issues in the industry, such as labor shortages,
coordination complexities, and the need for better quality
control measures.
The easing of supply chain For builders, this highlights the importance of not only
constraints meant more projects focusing on supply chain improvements but also investing
in stronger subcontractor management practices to
were completed on schedule or ensure project success.
ahead of time, marking a notable A notable ease in material sourcing marked a positive
shift from previous years where change from previous years. This logistical relief, however,
was replaced with a new challenge: the decision-making
delays were more common. process of client selections, affecting 16.6% of builders
and nearly doubling from 8.5% in 2022.
Despite this progress, challenges persisted in project Concurrently, a stabilization in market pricing influenced
management, primarily due to issues related to contractual practices. The use of rise and fall clauses or
subcontractors. cost escalation clauses in contracts witnessed a decline
A considerable 28.6% of projects still faced delays, from 52.6% in 2022 to 44.2% in 2023. This trend indicates
underscoring subcontractor-related challenges as a a more stable pricing environment, leading to a shift in
persistent and significant hurdle for builders, indicating how builders approach contract terms.
a need for more robust strategies in managing The combined effect of these changes outlines a
subcontractor relationships and performance. dynamic period in the industry, where builders are
adapting to evolving market conditions and client-related
complexities.

What Clients Want in
2024: Communication
and Visibility
— Marine Sargsyan, Houzz Staff Economist
Builders are resilient. Despite the many industry Understanding what today’s client wants and putting
headwinds, almost two in five builders report signing more in place tools to deliver that successfully will be critical
contracts in 2023 (38.5%) than in 2022, and more than half to builders’ success in 2024. Homeowners in the Houzz
anticipate signing more contracts in 2024 (58.2%). Plus, community tell us that they want more visibility and
nearly two-thirds report that they’re delivering projects better communication from design and construction
on time (63.5%), showing that builders are successfully professionals. Houzz research also shows that nearly two-
navigating challenges such as supply chain issues and thirds of homeowners say poor communication, a lack of
delivery delays. financial visibility in estimates, and difficulty visualizing a
project can create challenges in the process1.
Looking forward to 2024, the importance of generating
new leads and maintaining excellent customer service is Construction management software, such as Houzz Pro,
undeniable for sustaining the lead pipeline, with 45.9% can fill this need, where builders can keep homeowners
of builders reporting that generating quality leads is up to date on the latest schedule, communication history,
their greatest marketing challenge and nearly half (48.4%) payments and more significantly, reduce homeowner
saying that over half of their leads come from referrals. stress throughout the project.
So, it’s not surprising that 52.8% of builders say word
of mouth is their number one strategy for increasing
the number of referrals they generated in 2023. Client
satisfaction should also be top of mind, and knowing what
homeowners want is the key to achieving 2024 goals.
1 “2023 U.S. Houzz and Home Study: Renovation Trends.” Houzz, www.houzz.com/magazine/2023-u-s-houzz-and-home-study-renovation-trends-stsetivw-vs~166887998.

Project efficiencies
Are the majority of your projects
delivered by the agreed finish date?
I DON’T KNOW
2.3%
OVERTIME (LATE) ON TIME
28.6%
63.5%
AHEAD OF TIME
(EARLY)
5.6%

On time 62.7% 63.5% 64.2% 74.1%
Ahead of time (early) 5.4% 6.6% 1.9% 7.4%
Overtime (late) 29.5% 28.3% 28.3% 18.5%
I don’t know 2.3% 1.6% 5.7% 0.0%

Do you know your fixed Do the majority of your

expenses per job per day? projects meet the budget?
I don’t know
7.3%
No
40.4%
48.6% ON BUDGET
33.9%
YES
OVER BUDGET
52.3% 12.4% UNDER BUDGET
5.1% I DON’T KNOW

What is your biggest challenge in terms

of running projects?
31.1% 16.5% 16.6% 12.0%
SUBCONTRACTOR COST OVERRUNS CLIENT SELECTIONS CASH FLOW

DELAYS DECISIONS
8.0% 3.7% 0.9%

2.4% 9.5%
1.8%
BUILDING APPROVALS/ SOURCING MATERIALS WEATHER EMPLOYEE

PERMITS DELAYS ABSENTEEISM
2.4%
1.0%
2.1% 11.2%
0.3% 2.7%
2.4%
2.1% 3.9%
2.1%
RECRUITMENT / OTHER NONE I DON’T KNOW

STAFFING / LABOR

Subcontractor delays 30.1% 36.1% 22.6% 18.5%
Cost overruns 15.0% 18.4% 15.1% 22.2%
Client selections decisions 19.7% 11.1% 15.1% 25.9%
Cash flow 9.8% 14.3% 17.0% 11.1%
Building approvals/permits 7.8% 8.6% 7.5% 7.4%
Sourcing materials delays 4.7% 1.6% 7.5% 0.0%
Weather 2.1% 1.6% 3.8% 11.1%
Employee absenteeism 1.8% 1.6% 3.8% 0.0%
Recruitment / staffing / labor 0.5% 1.6% 1.9% 0.0%
Other 0.5% 0.0% 0.0% 0.0%
None 3.1% 2.0% 1.9% 3.7%
I don’t know 4.9% 2.9% 3.8% 0.0%

Do you include rise and fall clauses or cost escalation (CE)

clauses in your building contracts either as standard or as
special conditions?
NO
50.0%
YES
44.2%
I DON’T KNOW
5.8%
In 2023 have you signed a contract on

‘mates rates’ for family, friends or staff?
YES NO I DON’T KNOW
20.1% 75.5% 4.4%

Client Processes
Do you have a documented Do you perform post project
completed home handover/ completion audits?
final walkthrough process?
1.4% 3.0%
NO No
46.3% 43.0%
YES YES
52.3% 54.1%
Do you ask your clients for

a Net Promoter Score (NPS)?
I DON’T KNOW
YES 5.8%
8.5%
NO
85.8%

RECRUITMENT, SIMPLIFIED
AD
Build Your
Team Beyond
Borders with the
Ultimate Construction,
Remote Staffing Partner,
GoRecruit
"As a family owned agency, we've mastered the art of Construction Recruitment for
25+ years. Unearth top talent with us it's in our DNA!"
Why Work With Us?
Bespoke Service Industry Expertise Access Top Talent
Save on Costs Simple and Fast Checks and balances
How it Works
AD
STEP 1..... STEP 2..... STEP 3.....
We Help We Recruit We Support
We work closely with you to understand We launch a comprehensive marketing With your new remote team member on
your specific business needs. Together, campaign to attract top talent, both board, our ongoing support doesn't
we identify the exact skills, qualifica- actively and passively searching stop. We handle HR, basic monitoring,
tions, and experiences needed to established talent in the industry. Our and payroll, ensuring that assistance for
create a customized staffing solution thorough screening process ensures you and your remote team is just a call
that matches your business goals you receive the best-qualified candidates. away.
perfectly. You have the final say in selecting the
perfect fit for your needs.
HTTPS://GORECRUIT.IO/
GoRecruit.io Schedule Your
+HTTPS://GORECRUIT.IO/
61 2 9034 4333
Hiring Strategy
info@gorecruit.io
linkedin.com/company/gorecruitio/ Call Today
SORCI 2024 Technology MENU
Technology
Technology
tools with 74.8% utilizing software for the task. At the other
Buildertrend continues to end of the scale, only 34.7% of Canadian builders use
dominate the market for project software to complete their takeoffs.
management software in both the Health and Safety (H&S) continued highlighting big
differences in how building companies operate across the
United States and Canada, with four countries.
Buildxact the preferred choice in New Zealand leads the way with 74.1% using software to
manage their legal obligations compared to just 3.4% of
Australia and Builda Price leading building companies in the United States.
the way in New Zealand. There was a big increase in the number of Canadian
building companies implementing technology to manage
It’s good to see the use of spreadsheets for project their H&S requirements at 26.4% compared to just 6.7% in
management continue to decline with only 12.5% of 2022.
builders using them in 2023 compared to 16.9% in 2022
and 21.6% in 2021.
Alarmingly 67.4% of builders
Raymond R Panko’s research indicates that approximately
86% of spreadsheets contain errors1. This likely explains
in the United States do not
why builders who rely on spreadsheets for project have any established system in
management encounter challenges.
place compared to just 7.4% of
It was a similar story regarding dedicated estimating
software, with Buildertrend leading the way in the United companies in New Zealand.
States and Canada, Buildxact excelling in Australia and
Builda Price the number one choice in New Zealand. This could be related to both enforcement and the
availability of a dedicated solution for builders.
Again, it was good to see fewer builders relying on
spreadsheets for their estimating, with 25.8% continuing The standout system in Australia and New Zealand was
to use Google Sheets or Excel compared to 36.4% in 2022. HazardCo with SiteDocs leading the way in Canada and
Buildertrend in the United States.
Errors in estimates carry severe consequences, therefore
spreadsheets present a huge risk for the builders that use Overall, there was a noticeable increase in the amount of
them for estimating construction costs. money builders invested in software in 2023 with 43.8%
increasing their budget versus just 6.9% who reduced it.
One of the most underutilized software solutions in the
construction industry is takeoff software with 43% of Looking ahead to 2024, 31% of builders expect to continue
builders not using a dedicated tool. that trend by investing more money into technology
systems than what they invested in 2023.
Australian builders were the most likely to use takeoff
1 Panko, Raymond R. “Spreadsheet Errors: What We Know. What We Think We Can Do.” ResearchGate, Mar. 2008, www.researchgate.net/publication/1912352_Spreadsheet_Errors_
What_We_Know_What_We_Think_We_Can_Do.

A Smarter Way to
Guarantee Better
Margins
— Ahmed Yusuf, Partnerships Director, Wunderbuild
Recent findings from the 2023 SORCI survey underscore The benefits extend to the payment process, wherein
the prevalent challenges builders face in the construction the system automatically generates payment receipts
industry. While 48.7% of construction projects have when bills or claims are settled. This empowers builders
a contract value exceeding $600,000, 47.7% of all with readily accessible receipts, eliminating the need for
respondents lack clarity on their daily fixed costs. Cost multiple logins or third-party assistance. The result is
overruns affect a broad range of builders, with 33.9% enhanced accessibility and real-time financial insights,
finding that their invoiced costs are over budget at the facilitating informed decision-making.
end of a project. In an era marked by numerous business
In an industry where managing diverse datasets amid
closures, these statistics highlight areas for potential
tight margins and deadlines can lead to errors and
improvement.
revenue loss, adopting smarter business practices
An encouraging revelation is the widespread adoption becomes paramount. The integration of project
of dedicated project management software, utilized by management and accounting systems emerges as a key
59.9% of respondents. However, a crucial observation strategy for builders aiming to navigate challenges and
emerged—the lack of seamless integration between enhance profitability.
project management and accounting systems. It ensures
that any financial transaction recorded in either system
instantaneously reflects in the other, eliminating the need
for redundant data entry.
Scan here to view
This multi-directional integration serves to streamline the the Wunderbuild
financial workflow, minimizing errors and optimizing time APB Rewards Offer
utilization. Manual entry of data into multiple systems
becomes obsolete, mitigating the risk of discrepancies
and maintaining accurate and current financial
information across platforms.

a software that is a partner for success
Wunderbuild makes
construction project
planning and
management simple.
AD
Experience efficiency
like never before!
Contact us at:
Email: info@wunderbuild.com
Phone: 1300 16 16 26 (AUS)
What project management software do you use?

26.6% 12.5% 12.3% 6.9%
BUILDERTREND SPREADSHEETS BUILDXACT COCONSTRUCT
2.1% 2.0% 1.7% 1.5%
BUILDTOOLS PROCORE HOUZZ PRO BUILDA PRICE
1.5% 17.7% 14.5% 0.6%
WUNDERBUILD OTHER NONE I DON’T KNOW

Buildertrend 35.5% 13.5% 28.3% 14.8%
Spreadsheets 13.5% 9.4% 22.6% 7.4%
Buildxact 1.0% 32.0% 3.8% 11.1%
CoConstruct 8.0% 4.9% 9.4% 3.7%
BuildTools 3.9% 0.0% 0.0% 0.0%
Procore 1.8% 2.0% 0.0% 7.4%
Houzz Pro 2.6% 0.4% 1.9% 0.0%
Builda Price 0.3% 0.4% 0.0% 33.3%
Wunderbuild 0.0% 4.5% 0.0% 0.0%
Other 16.3% 19.7% 18.9% 18.5%
None 16.6% 12.7% 13.2% 3.7%
I don't know 0.5% 0.4% 1.9% 0.0%

Who does your estimations?
OUTSOURCED
IN-HOUSE
6.5%
91.8% I DON’T KNOW
1.7%

What estimating software do you use?*

25.8% 13.7% 10.9% 4.1%
SPREADSHEETS BUILDXACT BUILDERTREND COCONSTRUCT
2.9% 1.1% 1.1% 0.9%
PLANSWIFT BUILDA PRICE HOUZZ PRO WUNDERBUILD
0.6% 22.4% 15.8% 0.8%
BUILDTOOLS OTHER NONE I DON’T KNOW

Spreadsheets 30.5% 16.7% 30.8% 25.0%
Buildxact 1.4% 37.0% 3.8% 10.0%
Buildertrend 15.7% 2.8% 15.4% 0.0%
CoConstruct 5.2% 1.9% 7.7% 0.0%
PlanSwift 3.8% 1.9% 0.0% 5.0%
Builda Price 0.0% 0.0% 0.0% 35.0%
Houzz Pro 1.6% 0.0% 1.9% 0.0%
Wunderbuild 0.0% 2.8% 0.0% 0.0%
BuildTools 1.1% 0.0% 0.0% 0.0%
Other 20.1% 27.8% 17.3% 20.0%
None 19.5% 9.3% 21.2% 5.0%
I don't know 1.1% 0.0% 1.9% 0.0%

Who does your takeoffs?
OUTSOURCED
IN-HOUSE
9.7%
1.8%

What takeoff software do you use?*

14.2% 7.8% 6.1% 3.5%
BUILDXACT BUILDERTREND PLANSWIFT BLUEBEAM
2.1% 1.8% 1.4% 1.1%
COCONSTRUCT SOLOASSIST HOUZZ PRO/CONX WUNDERBUILD
0.6% 17% 43.0% 1.4%
BUILDA PRICE OTHER NONE I DON’T KNOW

Buildxact 1.8% 35.0% 6.1% 5.3%
Buildertrend 12.6% 1.8% 6.1% 0.0%
PlanSwift 6.9% 6.2% 0.0% 5.3%
Bluebeam (Revu) 4.5% 2.7% 2.0% 0.0%
CoConstruct 2.7% 0.4% 6.1% 0.0%
SoloAssist 0.0% 4.9% 0.0% 0.0%
Houzz Pro / ConX 1.2% 1.8% 2.0% 0.0%
Wunderbuild 0.0% 3.1% 0.0% 0.0%
Builda Price 0.3% 0.0% 0.0% 15.8%
Other 16.5% 19.0% 10.2% 21.1%
None 51.2% 25.2% 65.3% 52.6%
I don't know 2.4% 0.0% 2.0% 0.0%

Do you use software to manage health

and safety in the workplace?
YES 20.1%
NO - I
OUTSOURCE 3.7%
NO - I USE A
PAPER SYSTEM 25.2%
NO - I DON’T HAVE
AN ESTABLISHED
SYSTEM
47.6%
I DON’T KNOW 3.4%
What health and safety software do you use?
HAZARDCO 45.8%
SITEBOOK 6.9%
BUILDERTREND 5.6%
SITEDOCS 5.6%
OTHER 28.4%
NONE 4.2%
I DON’T KNOW 3.5%

How much did you invest

in software in 2023?
30.3%
24.1%
20.3%
14.1%
4.6%
3.5% 3.1%
$0 - $2K - $5K - $10K - $20K - I DON’T

$36K+
$2K $5K $10K $20K $36K KNOW
How did your software spend How much do you plan to

in 2023 compare with your invest in software in 2024?
software spend in 2022?
MORE THAN
43.8% MORE 31.0% 2023
LESS THAN
6.9% LESS 5.9% 2023
SAME AS
44.6% SAME 50.0% 2023
4.6% I DON’T KNOW 13.1% I DON’T KNOW

SORCI 2024 Financials MENU
Financials
Financials
The percentage of builders earning a salary exceeding
$180,000 increased in 2023 up to 18.3%. With builders
in the United States being the most likely and Canadian
More builders are achieving higher markups and planning
to increase their markup again in 2024, which is good to
see.
builders the least likely to do so. Overall, Canadian
Net profit margins also increased for builders with 49.8%
builders appeared to be the most underpaid across the
of building companies predicting double digit net profits
four countries.
for 2024.
Builders that paid themselves more, unsurprisingly also
However, there are still not enough builders monitoring
had the highest margins and were more likely to record
their gross margins on projects on a monthly basis
their salaries in the company’s fixed expenses as opposed
and only 52.3% of builders produced monthly financial
to drawing down a loan or taking an end-of-year dividend.
reports.
Further proof that paying yourself first is the way to go!
Performing a monthly audit on every project under
Only 38.9% of builders gave construction allows a builder to identify problem jobs and
cost overruns a lot earlier and potentially reduce their tax
themselves a pay rise in 2023. obligations at the same time.
While this was an improvement Even more concerning is that only 7.6% understand how
on 2022, it still meant that 61.1% to calculate WIP compared to 42.3% of builders who think
they understand this little known calculation.
of builders suffered a decrease Builders in Australia are noticeably more advanced on this
in real income after factoring in topic than builders in other countries. However, the figures
are still alarming with only 13.5% of Australian builders
inflation. passing the related test question compared to just 4.1%
of builders who answered correctly in the United States.
Looking ahead, 52% of builders plan to increase their
pay in 2024, which again means that almost half (48%) Across the board, only 30.7% of builders calculated this
of builders will experience a decrease in pay once they number monthly, which is a required component of a
consider inflation. building company’s monthly financial reports. Without it,
reports are inaccurate and builders can get caught out
Sales revenue looked slightly better than 2022 with 49.2% paying taxes on profits they never actually made.
of builders reporting an increase in revenue in 2023.
However, the exception was New Zealand, where only The accounting software builders used to manage their
25.9% of building companies grew. finances was once again linked to geography, with builders
in Australia and New Zealand preferring Xero while
With that being said, the outlook for 2024 is very positive builders in North America choosing QuickBooks.
with 76.9% of builders expecting to grow and a staggering
88.9% of building companies in New Zealand expecting to There was a slight increase in the number of builders
increase their revenue. belonging to a buying group, however the overwhelming
majority (81.3%) still prefer to do their own price
The number of builders that truly understand the negotiations.
difference between markup and margin continued to
increase with 68.3% answering the related question In summary, the industry remains optimistic about
correctly compared to 66% in 2022. revenue growth, but the data highlights the need for
improved financial practices.

The Importance of Financial
Control & Why Profit Margins
Shouldn’t Take a Backseat In
Your Business
— Dan Houghton, CEO and Co-founder of Buildertrend
For nearly two decades, I’ve witnessed countless

residential builders grow their businesses beyond
Financial success beyond
what they ever thought possible. In an industry once project completion
dependent on notepads, spreadsheets and manual
Building a sustainable business means extending your
processes, technology has played a pivotal role in
focus beyond the completion of individual projects. By
fostering efficiency and systemization, contributing to the
integrating financial management into your strategy,
growth of new and established businesses.
you’re better positioned to navigate market fluctuations
However, as the industry faces challenges like the ongoing and ensure long-term success.
labor shortage and the tightest credit environment since
the Great Recession, it’s essential to shift our focus
beyond technology as the sole hero. Builders need to Higher client satisfaction
gain better financial control to see more profitable years Clients are at the heart of every business. So being
ahead. Insights from this year’s report prove that builders transparent with your financials and keeping not just your
can’t continue to scale if they’re only running their job revenue top of mind, but their dollars as well, allows you
sites and not their businesses as a whole. to deliver a better experience. Happy customers are more
• 76.9% of builders expect to make more sales revenue likely to become repeat clients and refer your services,
in 2024. contributing to sustained growth.
• 40% don’t monitor the target gross margin on their
projects every month.
• 33.9% report invoiced costs over budget
Adaptability in a changing landscape
after a project. The construction industry is dynamic, with trends and
challenges continuously evolving. Focusing on the entire
business, rather than individual jobs, equips you with
These survey results highlight that without true visibility the ability to stay ahead. This includes addressing labor
into job costs and business expenses, more revenue won’t shortages, market shifts and other factors that impact
necessarily lead to more profits. In fact, a lack of financial profitability.
transparency makes achieving company goals that much
harder for business owners. This year’s report also shows that one of the top goals
builders have for their business in 2024 is increasing profit
This signals a broader industry need for recognizing the margins.
connection between running the entire business versus
merely focusing on the success of singular jobs. This If you’re always asking, ‘Am I making more than I’m
matters for three main reasons: spending?’ there’s a disconnect in your business. Using
funds from a previous job to pay for the next isn’t going to
cut it anymore. The industry is changing, and it’s time to
embrace a new way to work—so you can make 2024 your
most profitable year yet.

Construction accounting
you’ll actually trust.
Affordable Accounting, Payroll, and
CFO Services Exclusively for Ambitious
Builders and Remodelers
AD
STOP FLYING BLIND
CONTROL YOUR COSTS
MAKE MORE MONEY
Unlock the true potential of your construction business.

Email stevek@apparatusteam.com
to schedule your free consultation today.
ApparatusTeam.com
Salary/wages
How much did you pay yourself in 2023

(ie your total drawings)?
$0 - $60K 16.6%
$60K - $120K 37.0%
$120K - $180K 23.4%
$180K - $240K 10.1%
$240K+ 8.2%
I DON’T KNOW 4.6%

$0 - $60K 16.8% 14.8% 26.4% 11.1%
$60K - $120K 32.9% 41.4% 50.9% 29.6%
$120K - $180K 21.2% 27.0% 11.3% 44.4%
$180K - $240K 11.4% 10.2% 1.9% 7.4%
$240K+ 11.1% 4.5% 3.8% 7.4%
I don’t know 6.5% 2.0% 5.7% 0.0%

Were your drawings How did your total

included as a salary in drawings in 2023 compare
your fixed expenses? with 2022?
YES
71.0% 38.9% MORE
8.7% LESS
NO
21.8%
47.0% SAME
I DON’T KNOW
7.2%
5.4% I DON’T KNOW
How much do you plan to pay yourself

in 2024 (ie your total drawings)?
52.0% MORE
THAN 2023
LESS
2.7% THAN 2023
SAME
38.5% AS 2023
6.9% I DON’T KNOW

REVENUE
What was your sales revenue for 2023?
$0 - $1M 20.8%
$1M - $3M 33.9%
$3M - $6M 18.9%
$6M - $12M 11.3%
$12M - $20M 6.8%
$20M - $50M 3.9%
$50M+ 1.5%
I DON’T
KNOW
2.8%

$0 - $1M 20.5% 21.3% 22.6% 18.5%
$1M - $3M 27.5% 41.8% 43.4% 37.0%
$3M - $6M 19.2% 18.0% 13.2% 33.3%
$6M - $12M 14.0% 8.2% 11.3% 0.0%
$12M - $20M 8.3% 4.9% 5.7% 3.7%
$20M - $50M 5.4% 2.5% 0.0% 3.7%
$50M+ 2.3% 0.4% 1.9% 0.0%
I don’t know 2.8% 2.9% 1.9% 3.7%

How did your sales revenue What is your revenue

for 2023 compare with 2022? target for 2024?
MORE THAN
49.2% MORE 76.9% 2023
LESS THAN
18.2% LESS 4.6% 2023
SAME AS
28.9% SAME 16.2% 2023
3.8% I DON’T KNOW 2.3% I DON’T KNOW
Do you understand the

difference between
markup and margin?
YES
NOT SURE
8.2%
84.2%
NO
7.6%

To achieve a gross margin of 25%,

how much will you mark up your project by?*
CORRECT ANSWER: 33%

81.1%
25%
7.9% 100%
20%
1.2%
5.5%
0% I DON’T KNOW
0.5% 3.8%

0% 0.9% 0.0% 0.0% 0.0%
20% 6.1% 4.3% 2.4% 15.0%
25% 8.5% 7.2% 7.3% 5.0%
33% 77.4% 87.6% 78.0% 80.0%
100% 1.5% 0.0% 4.9% 0.0%
I don’t know 5.5% 1.0% 7.3% 0.0%
*This data excludes respondents who selected ‘No’ in the question, “Do you understand the difference between markup and margin?”

What was your

gross markup for 2023?
23.7%
22.0%
21.1%
13.4%
9.9%
7.3%
2.7%
I DON’T
0% - 15% 15% - 20% 20% - 25% 25% - 33% 33% - 50% 50%+
KNOW

0% - 15% 12.2% 14.3% 17.0% 14.8%
15% - 20% 23.8% 23.0% 24.5% 25.9%
20% - 25% 17.9% 28.3% 11.3% 22.2%
25% - 33% 21.2% 23.4% 20.8% 22.2%
33% - 50% 13.0% 5.3% 11.3% 3.7%
50%+ 4.1% 0.4% 3.8% 0.0%
I don’t know 7.8% 5.3% 11.3% 11.1%

What is your target

gross markup for 2024?
30.7%
22.4%
17.7%
13.9%
7.0%
3.8% 4.4%
I DON’T
0% - 15% 15% - 20% 20% - 25% 25% - 33% 33% - 50% 50%+
KNOW
Do you monitor the gross margin

on your projects every month?
YES 56.6%
NO 40.0%
I DON’t KNOW 3.4%

What was your NET profit margin

during 2023 (after all expenses
and your own drawings)? 17.7%
14.6% 15.1%
14.4%
13.1%
10.7%
8.6%
5.8%
I DON’T
<0% 0% - 2.5% 2.5% - 5% 5% - 7.5% 7.5% - 10% 10% - 15% 15%+
KNOW

<0% 4.7% 6.6% 11.3% 3.7%
0% - 2.5% 7.3% 11.1% 9.4% 3.7%
2.5% - 5% 14.0% 13.1% 7.5% 11.1%
5% - 7.5% 15.0% 13.9% 9.4% 18.5%
7.5% - 10% 14.0% 15.2% 15.1% 18.5%
10% - 15% 16.8% 17.2% 24.5% 22.2%
15%+ 13.2% 9.0% 3.8% 3.7%
I don’t know 15.0% 13.9% 18.9% 18.5%
What is your target NET 27.3%

profit margin in 2024 21.0%
22.5%
(after all expenses and
your own drawings)?
12.5%
9.7%
5.6%
0.1% 1.1%
I DON’T
<0% 0% - 2.5% 2.5% - 5% 5% - 7.5% 7.5% - 10% 10% - 15% 15%+
KNOW

Expenses
What percentage of your revenue did you spend on
fixed expenses in 2023 (including your drawings)?
<5% 5% - 10% 10% - 13% 13% - 17% 17% - 20% 20%+
I DON’T KNOW
5.5% 18.2% 12.4% 13.7% 9.9% 14.4% 26.1%

<5% 7.0% 3.3% 3.8% 7.4%
5% - 10% 17.9% 19.3% 11.3% 25.9%
10% - 13% 12.4% 13.1% 5.7% 18.5%
13% - 17% 10.9% 17.6% 20.8% 3.7%
17% - 20% 9.3% 11.9% 7.5% 3.7%
20%+ 16.3% 10.7% 15.1% 18.5%
I don’t know 26.2% 24.2% 35.8% 22.2%
What is your budget for fixed Financial Reports

expenses in 2024 (including Do you produce monthly
your drawings)? financial reports?
0% - 5% 5.5% I DON’T KNOW
3.4%
NO
5% - 10% 17.3% 44.4%
10% - 13% 17.5%
13% - 17% 15.2%

YES
17% - 20% 9.4%
52.3%
20%+ 7.9%
I DON’T 27.2%
KNOW

Do you know how to calculate

your Work In Progress Accounting
Adjustment (WIPAA) figure?
YES 42.3%
NO 43.5%
Not sure 14.2%
The WIPAA figure is:* CORRECT

ANSWER
7.3% 36.3% 34.3% 18.0% 3.3% 0.7%

THE
UN-INVOICED
THE AMOUNT THE VALUE
AMOUNT NONE OF I DON’T THE VALUE OF
OF WORK IN OF WORK
REMAINING THE ABOVE KNOW GOODWILL
THE PIPELINE COMPLETED
ON ALL
CONTRACTS
*This data excludes respondents who did not select ‘Yes’ in the question, “Do you know how to calculate your Work In Progress Accounting Adjustment (WIPAA) figure?”.

How often do you calculate your WIPAA?*

MY ACCOUNTANT
DOES IT
YEARLY
8.0% 13.7%
MONTHLY NEVER
29.9%
30.7%
I DON’T
KNOW
17.7%
BREAKDOWN OF BUILDERS WHO DO NOT REGULARLY CALCULATE WIPAA:

NEW HOMES
My accountant does it 21.3% 28.6% 17.4% 75.0%
Never 46.1% 42.9% 52.2% 0.0%
I don’t know 32.6% 28.6% 30.4% 25.0%
My accountant does it 17.2% 17.2% 28.6% 50.0%
Never 55.2% 58.6% 57.1% 25.0%
I don’t know 27.6% 24.1% 14.3% 25.0%

What accounting software do you use?
50.8% 28.9% 4.2% 8.8% 5.2% 2.1%
QUICKBOOKS XERO MYOB OTHER NONE I DON’T KNOW
How much Net Working Capital

do you have in your building company?
32.0%
19.4%
13.5%
8.7% 11.3%
6.8% 8.3%
$0 - $100K - $250K - $500K - I DON’T

<$0 $1M+
$100K $250K $500K $1M KNOW

How much cash do you have in

your building company?
38.0%
22.4%
11.3%
6.5% 7.7% 8.3%
5.8%
$0 $100K - $250K - $500K - I DON’T

<$0 $1M+
- $100K $250K $500K $1M KNOW
Are you a member of a buying group?
YES 15.8%
NO 81.3%
I DON’t KNOW 3.0%

SORCI 2024 PLANNING MENU
PLANNING
PLANNING
Builders are often heavily involved in the hands-on
construction process—the ‘in’ aspect of their business.
However, a concerning 61.4% of builders allocate less than
25% of their time to work on the business. This hinders
However, their company’s overall success and growth strategic planning and innovation, ultimately limiting the
requires focused attention ‘on’ the business, which potential for growth and competitive advantage in an
includes strategic planning, marketing, managing finances, increasingly dynamic industry.
streamlining operations, and improving business systems.
The number of building companies with organizational
While their expertise may lie in building homes, without charts also declined in 2023 and 64.1% of respondents
healthy operational performance, even the most talented stated that they didn’t have a business plan in place for
builders may find their businesses stagnating, or worse, the next three years!
failing.
A business plan is an essential tool that provides
direction and clarity, setting tangible goals and outlining
The data showed a significant the strategies to achieve them. Without a plan, building
increase in the number of builders companies risk missing prime growth opportunities, not
preparing for potential challenges, and failing to secure
working more than 50 hours a their financial stability.
week, with 12.3% of respondents Complacency to focus on the strategic future of a building
now working over 60 hours weekly. company is a silent killer that can result in impulsive
decisions and fast decline in a challenging market.

Navigating Market
Headwinds: Custom Builders
Prepare For Homebuilding
Challenges In 2024
— Julian Krishnan Nair, Senior Partner Manager, Buildxact
For custom builders, 2023 is a year most are happy to Builders also use software to identify unprofitable jobs
have in the rear-view mirror as they look ahead to 2024 to avoid. With software, builders can create detailed line
with cautious optimism. Rising interest rates have kept items for materials, labor and overhead. These details help
first-time home buyers on the sidelines and haven’t builders decide if they can markup jobs sufficiently to
spared the market for larger and more expensive custom- make them profitable.
built homes.
Competitive builders are increasingly aware of the
In the United States, custom housing starts in the past importance of markup for overall business growth.
four quarters are down 14% compared to the prior period, Roughly two thirds (66.8%) of builders marked up their
and other major markets, like Australia, while still working projects between 15% and 33% in 2023.
through a backlog of home construction projects in some
With software, builders can accurately set markup for
regions, expect to see an overall slowdown in residential
each project, specify in their bid how much markup
construction activity in 20241.
detail the customer sees, and save their most successful
Despite the projections, a short supply of homes offers bids and project schedules as templates to be used to
future opportunities for home builders. estimate, bid and manage future jobs.
From the 2023 SORCI survey, we know that 76.9% of
builders say they plan to grow their sales revenue in 2024.
Doing so requires new strategies and tools. More builders Scan here to view
are investing in software to perform takeoffs, estimates the Buildxact
and onsite health and safety programs every year. This APB Rewards Offer
kind of trend means even small builders can’t afford to
be left behind when it comes to learning new software.
Fortunately, affordable solutions are available. Cloud-
based software for quick material takeoffs and estimates
help builders bid on more jobs with less effort. Getting
bids out the door fast is critical as more builders chase
quality customers.
1 U.S. Census Bureau and U.S. Department of Housing and Urban Development. “Quarterly Starts Completions.” New Residential Construction, Nov. 2023, www.census.gov/
construction/nrc/pdf/quarterly_starts_completions.pdf.

AD
The #1 Checklist For

Understanding Construction
Financials & Increasing Margins
SCAN HERE TO
DOWNLOAD FOR FREE
Do you have an organizational

chart of your business?
I DON’T KNOW
2.1%
NO
55.4%
YES
42.5%
Do you have a business plan

covering the next three years? NO
64.1%
YES
34.5%
I DON’T KNOW
1.4%

Yes 31.3% 36.1% 43.4% 48.1%
No 66.8% 62.7% 56.6% 51.9%
I don’t know 1.8% 1.2% 0.0% 0.0%

How much time do you allocate in your calendar

to work on the business rather than in it?
25% - 49%
LESS THAN 25%
17.0%
61.4% 50% - 79%
6.6%
80% - 99%
2.1%
100%
1.4%
I DON’T KNOW
11.4%
Less than 25% 59.1% 65.2% 52.8% 77.8%
25% - 49% 16.6% 16.4% 24.5% 14.8%
50% - 79% 8.8% 4.5% 3.8% 0.0%
80% - 99% 2.3% 1.2% 5.7% 0.0%
100% 1.0% 1.6% 3.8% 0.0%
I don’t know 12.2% 11.1% 9.4% 7.4%
How many hours a week do you work on average?

0 - 30 5.4%
31 - 40 12.7%
41 - 45 16.8%
46 - 50 22.3%
51 - 55 15.5%
56 - 60 14.5%
61+ 12.3%
I DON’T KNOW 0.7%

SORCI 2024 TEAM MENU
Team
Team
Throughout the year, builders faced significant challenges
in recruiting staff, yet only 20.6% had a formal process
While daily huddles and annual
for hiring. This suggests a lack of structured recruitment staff appraisals are not common
strategies in the industry, highlighting a potential area for
improvement. among many building companies,
Developing a clear, documented recruitment process a significant majority, 59.4% of
could streamline hiring, ensuring the selection of skilled
and suitable candidates and potentially alleviating some
respondents, now conduct weekly
of the challenges faced in this area. It’s an opportunity for meetings.
construction companies to optimize their workforce and
address staffing issues more effectively. This increase in weekly meetings signifies a growing
recognition of the importance of frequent team
Similarly, the survey revealed that just 31.3% of builders
interactions, which can foster better collaboration,
have a structured onboarding process for new employees.
alignment with project goals and quicker issue resolution.
This indicates a potential gap in human resources (HR)
to ensure new staff members are efficiently integrated It suggests that builders value ongoing communication
into the company, likely impacting their productivity and as an essential tool for enhancing project efficiency, staff
engagement. engagement, and overall business performance in an
industry where coordination is paramount.
Only 26.3% of builders have In summary, the findings suggest that building companies
documented job descriptions, have a substantial opportunity to gain a competitive edge
by investing in the development of robust HR strategies.
which can lead to role
These strategies, encompassing elements such as
ambiguities and inefficiencies effective recruitment processes, comprehensive
in task allocation. onboarding procedures, job descriptions and employee
handbooks, can significantly enhance the company’s
ability to attract, engage and retain top-tier talent in the
Additionally, a mere 37% of respondents have an
industry.
employee handbook or manual, which serves as a
valuable resource for both employees and employers, By embracing these practices, builders can create a
setting clear expectations and guidelines. The absence of workplace culture that not only attracts the best staff but
these essential tools in the majority of builders’ practices also ensures their long-term satisfaction and productivity.
may result in higher staff turnover rates, highlighting This investment in HR has the potential to yield long-term
the need for more comprehensive HR practices in the benefits, including improved project outcomes, enhanced
industry. customer satisfaction and a stronger position in a highly
competitive market.
Although the construction industry traditionally hasn’t
prioritized regular communication and feedback
mechanisms, the survey findings indicate a positive shift
in certain areas.

Embracing Diversity &
Technology to Overcome
Labor Challenges
— Karen Walshe, Chief Operating Officer, GoRecruit
In 2023, the construction industry faced persistent labor Interestingly, 31.3% of respondents have implemented
challenges and rising wages, prompting the need for onboarding processes and 37% provide detailed
strategic initiatives. Engaging subcontractors, leveraging employee handbooks, establishing a promising foundation
migrant workforces, empowering women in construction to refine and enhance the onboarding experience for
roles, offshoring administrative and skilled professions, greater success.
and integrating artificial intelligence became pivotal in
With approximately 22.8% holding daily meetings, 59.4%
addressing these hurdles.
holding weekly meetings and 38.9% conducting regular
The increase of subcontracted carpentry work from performance appraisals, there’s an exciting opportunity
40.2% in 2022 to 43.4% in 2023 demonstrates the to formalize these practices. This proactive approach can
industry’s adaptability to cope with labor shortages. elevate operational efficiency and anticipate potential
However, it’s now more evident than ever that cultivating risks, such as budget overruns or staffing challenges.
and sustaining an exceptional team is paramount for Structured meetings not only encourage a vibrant
achieving success. The results from the 2023 SORCI team culture but also serve as a catalyst, sparking
survey emphasize specific areas needing focus: staff engagement and fostering collaboration toward
standardizing recruitment, refining onboarding, and collective goals.
enhancing performance evaluations.
These insights underscore the significance of strategic
Business recruitment methods currently lack adaptation and continual improvement in recruitment,
documentation, with only 20.6% having established team development and operational practices to navigate
procedures and 26.3% having job descriptions and thrive in a dynamic business landscape.
incorporating key performance indicators. Utilizing this
data not only uncovers growth opportunities but also Scan here to view
amplifies operational efficiency, which is crucial for the GoRecruit
successful talent recruitment and retention. APB Rewards Offer

EXCLUSIVE
FOR APB
MEMBERS
Get cash paid back to you AD
All committed to serving
the APB community
worldwide.
In order to be eligible to receive an APB
on the services you use in Reward (cash rebate) you must be a
current member of the Association of
your building company! Professional Builders and a new
customer of the APB Rewards Preferred
Think software providers, marketing
Partner.
services, lawyers, insurance, safety
and more.
At the end of each quarter, APB will pay
your rewards into your nominated bank
We have curated a network of preferred
account.
partners that provide services to help
you run your building company more
It's that easy!
efficiently and more profitably.
IT'S NEVER BEEN A BETTER

THE BEST PART? TIME TO BE A MEMBER OF APB!
They all follow APB best practices!
Website designers that follow the APB

process, insurance services that will help
you increase your Home Owners
Warranty Insurance and state of the art
software providers.
How many staff does your company employ?*

1-5
58.3%
6 - 10
20.4%
11 - 49
18.0%
50+
1.7%
1.5%
I DON’T
KNOW
*The data includes site supervisors/superintendents, but excludes contractors, carpenters, apprentices and other onsite workers.
Is your carpentry work completed by

subcontractors or in-house employees?*
43.4% 33.5% 22.4%
BOTH EMPLOYEES
SUBCONTRACTORS SUBCONTRACTORS & (IE ON YOUR PAYROLL)
EMPLOYEES
*Employee refers to anyone on the company payroll. I DON’T KNOW 0.7%

Do you have a documented What is your revenue

process for recruiting new per employee?
staff? 1.4%
I DON’T KNOW
27.6%
$0 -
YES $250K
20.6% $251K - 16.1%

$500K
$501K - 7.7%
$750K
NO $751K - $1M 5.4%
78.0% $1M -
$1.5M
6.5%
$1.5M+ 5.5%
I DON’T 31.3%
KNOW
Do you have an onboarding Do you have an employee

process for new staff? handbook/company manual?
2.8% 0.7%
YES YES
31.3% 37.0%
NO NO
65.9% 62.3%

Do you have written job descriptions with clear Key

Performance Indicators (KPIs) for every team member?
I DON’T KNOW
YES
1.5%
26.3%
No
72.1%

Yes 24.9% 25.4% 24.5% 59.3%
No 72.8% 73.8% 75.5% 40.7%
I don’t know 2.3% 0.8% 0.0% 0.0%

Do you hold daily huddles/ Do you hold weekly

meetings? huddles/meetings?
1.0% 0.7%
NO NO
76.2% 39.9%
YES YES
22.8% 59.4%
Do you conduct 6-monthly or annual

performance appraisals?
I DON’T KNOW
1.7%
NO
59.4%
YES
38.9%

Systemizing the
Business is still
a top priority
— Darren Wallbank, Director, Builda Price
In reviewing the results of the 2023 SORCI survey, the One of the statistics in the 2023 survey results was
need to systemize the business is still one of the top two the percentage of cost-plus contracts in each country.
priorities for the next twelve months for builders. This type of contract is a great example of where smart
systems are needed. These systems should ensure
This is not surprising given the nature of compliance and
nothing is missed, the forecast position is up to date
reporting requirements we are now seeing from clients,
for clients, and the reporting facilitates timely, accurate
bankers, insurance companies and accountants.
claims.
Everything is speeding up and the expectations of
Being able to do this using smooth integration and
stakeholders are increasing in terms of real-time reporting
smart artificial intelligence (AI) is something we are
of where projects and results are sitting. This area is not
focusing strongly on at Builda Price, as we see effective
going to lessen but, in fact, increase as governments and
administration and reporting as key to keeping customers
industry institutions up their requirements.
aware of what is happening.
This means your business software needs to be able
Software that meets the wider needs of builders will be a
to systemize operational components along with
key element of systemizing the business moving forward.
administrative and reporting requirements to meet all
Watch and participate in this trend to get ahead.
parties’ needs.
To systemize your residential building company
Scan here to view
effectively, your software either needs to include all the
the Builda Price
elements you need within its solution (this nirvana doesn’t
exist yet) or have very smooth integrations in place.
APB Rewards Offer

SORCI 2024 Training MENU
Training
Training
There has been a continual year-on-year decline in
the commitment to self-improvement for builders.
This was evidenced by a reduction in the amount of
A positive trend is the slight improvement in builders’
mental health amidst the industry’s challenges, with
20.8% reporting a deterioration in 2023, down from 26.2%
business books read and investment in training, with in 2022.
81% of builders dedicating six hours or less per month
to personal development. While almost one in five (20.8%)
An underwhelming 34.2% increased their investment builders struggling to cope
in training in 2023, even though 49.2% experienced an
increase in revenue. mentally is still a figure that is way
Expected future trends follow a similar trajectory, with too high, it is good to see the trend
only 39.6% planning to increase their training investment
in 2024—significantly lower than the 76.9% of builders
heading in the right direction, at
forecasting growth in the coming year. least for now.
Regional differences also emerged. Builders in the
The data also showed that builders undergoing coaching
United States and Australia are predominantly aiming to
or mentorship, particularly those paying for these
systemize their business operations, while their Canadian
services, are more than twice as likely to achieve a 33%-
and New Zealand counterparts are prioritizing the signing
plus markup on their jobs with a staggering 120.4% more
of more contracts.
builders reaching the industry benchmark for gross profit.
Regardless of geography, the overall strategic focus While this may appear self-serving, considering that APB
is gradually shifting away from pricing and margins is a coaching company, these outcomes underline the
and gearing toward sales and lead generation, a trend undeniable value of an impartial third-party advisor given
reminiscent of pre-COVID times. the isolating nature of running a building company.
As mentioned earlier in the report, 64.1% of builders do While the decline in self-improvement efforts is
not have a business plan for the next three years. A lack concerning, the positive shifts in mental health and the
of planning could suggest gaps in budgeting for additional advantages of coaching and mentorship offer promising
staff training and hiring, potentially impacting the focus areas. Comprehensive planning and continued
efficiency of business operations. support are essential to enhance builders’ personal
development and business growth in this demanding
industry.

Strategy
Selections: It’s not just about your
clients—expand your choices
When it comes to selections, the obvious first step is
For The
considering the brands your clients want, and then
making it easy for them to choose the pieces for their
dream home.
The best builders take it even further. They delve into
Future:
the vast market of available materials, uncovering
opportunities for cost-effectiveness and expanding the
array of client choices. While builders often feel stretched
thin (this year’s survey found 61.4% of builders allocate
less than 25% of their time to work on their business
The Benefit of rather than in it), investing time in exploring options

can pay off in client satisfaction and project success.
Prioritizing Profit
Organizations like CBUSA help builders do this by setting
up programs with great brands that protect members
from inevitable price increases.
and Community It’s also critical for suppliers to expand exposure to more
teams, especially the custom independent builders
— Brian Pavlick, President of CBUSA CBUSA represents. We help build those connections
between builder and manufacturer and provide resources
to instill client confidence in the selection process.
I’ve witnessed countless market shifts during my 20
years in this industry. As president of the largest group
purchasing network, here’s my advice to overcome the Cashflow: Prepare for price increases
biggest challenges facing residential construction in 2024.
by tapping into the community
Cost overruns: Navigate the financial Even though there are some concerns about affordability,
there’s still optimism industrywide. A majority (76.9%) of
maze with strategic planning builders expect to make more sales revenue in 2024—
higher than the 2022 survey results.
Given the spike in interest rates over 2023, we’ve seen
builders in our network struggle with material costs. The Depending on how fast this growth happens, there may
2023 SORCI survey reflects that with 33.9% of builders be an increase in costs as demand could force raw
reporting invoiced costs over budget. Today, more than materials and commodities higher. But you don’t have to
ever, builders are sensitive to material cost variances go at it alone.
eating into profitability.
By working with fellow builders in a network like CBUSA,
This is something the CBUSA team is laser-focused on and builders can share and learn practical advice—the kind of
tactical budgeting is crucial. But what does that really tips only another builder would know.
look like?
In an industry where changes happen in an instant,
Allocate resources wisely, monitor expenses closely and success lies in strategically thinking ahead, streamlining
remain adaptable to navigate the unexpected. The best processes and fostering a supportive community. As
builders regularly adjust budgets to align with market we confront challenges head-on, I’m confident in our
fluctuations, too. That’s where partners like CBUSA and industry’s ability to find solutions and build a future where
construction software can help. the best not only survive, but thrive.

Listen here:
AD
#1 Podcast For The Professional Builders Secrets podcast

is the #1 resource for builders operating
a professional building company. Host Will
Professional Blunt brings together some of the best

minds in the residential construction
Builders
industry, including Co-Founders of the
Association of Professional Builders Russ
Stephens and Sky Kolade.
On this show, professional builders

share their experiences in residential
Now streaming on: construction and provide insightful tips
on operating and growing their businesses.
Episodes are released weekly, each

packed with helpful recommendations from
industry experts on how to run a successful
building company, covering various topics,
including sales, marketing, financials and
operations.
How many business books do

you read in a year?
41.4%
24.5%
22.5%
5.8%
3.4% 2.4%
0 1-2 3-6 7 - 12 13+ I DON’T KNOW
How much time do you allocate

to training each month?
0
HOURS
24.2%
1-2
HOURS 31.4%
3-6
HOURS 25.4%
7 - 12
HOURS 7.5%
13+
HOURS 6.3%
I DON’T
KNOW 5.2%

What is THE #1 thing you would like to improve

in your business in the next 12 months?
SYSTEMIZE
THE BUSINESS 37.3%
SIGN MORE
CONTRACTS 20.6%
INCREASE
MARGINS
20.6%
MYSELF
8.2%
GET MORE
LEADS 7.7%
OTHER 0.8%
I DON’T
KNOW 4.8%

Systemize the business 39.1% 38.1% 32.1% 14.8%
Sign more contracts 20.5% 16.8% 34.0% 29.6%
Increase margins 20.5% 21.3% 15.1% 25.9%
Myself 7.5% 10.7% 0.0% 11.1%
Get more leads 7.8% 5.3% 15.1% 14.8%
Other 0.3% 1.6% 1.9% 0.0%
I don’t know 4.4% 6.1% 1.9% 3.7%

How much did your company

Invest in training in 2023?
26.3%
22.0%
18.6%
13.0%
7.5%
6.6%
4.8%
1.3%
$1 - $2,000 - $5,000 - $12,000 - $25,000 - I DON’T

$0 $60,000+
$1,999 $4,999 $11,999 $24,999 $59,999 KNOW

$0 26.4% 15.6% 24.5% 11.1%
$1 - $1,999 25.1% 26.2% 30.2% 37.0%
$2,000 - $4,999 18.4% 19.7% 15.1% 18.5%
$5,000 - $11,999 10.4% 16.4% 15.1% 14.8%
$12,000 - $24,999 6.7% 9.4% 1.9% 11.1%
$25,000 - $59,999 6.7% 6.6% 5.7% 7.4%
$60,000+ 0.8% 1.6% 3.8% 0.0%
I don’t know 5.4% 4.5% 3.8% 0.0%

How did the amount you invested in

training in 2023 compare with 2022?
34.2% MORE
6.1% LESS
51.8% SAME
7.9% I DON’T KNOW
How much do you plan to

invest in training in 2024?
MORE
39.6% THAN 2023
LESS
3.2% THAN 2023
40.3% SAME
AS 2023

Do you have a Do you pay for

coach or mentor? coaching or mentoring?
1.0% 0.7%
YES YES
35.4% 29.6%
NO NO
63.7% 69.7%
Do you have a succession plan?

I DON’T KNOW
YES 2.7%
19.2%
NO
78.2%

How has your mental health been

in 2023 compared to 2022?
25.9%
STAYED
THE SAME 53.2%
IT IMPROVED DETERIORATED
20.8%

SORCI 2024 GLOSSARY MENU
GLOSSARY
ARTIFICIAL INTELLIGENCE (AI) Artificial Intelligence (AI) refers to the creation of computer systems that can perform
tasks usually requiring human intelligence. This includes tasks like seeing and recognizing
images, understanding and speaking languages, making decisions, and translating
between different languages. Additionally, a key aspect of AI is its ability to learn from
data, improving its performance and decision-making over time without direct human
guidance.
COST PER LEAD (CPL) The cost per lead (CPL) is a metric that measures the cost or dollar value of how much it
costs to acquire a lead from your marketing campaign (refer to the definition of a lead).
The CPL can help in further calculations to establish the return on investment (ROI) for a
marketing campaign.
CPL = [CAMPAIGN SPEND/LEADS GENERATED]
By comparing CPL to the value of your product or service you can determine whether
the CPL on your campaign is too high in which case you may decide to end the
campaign. However, if the CPL is low, then the organization may wish to scale the
campaign up to generate more leads.
CUSTOMER RELATIONSHIP Customer Relationship Management (CRM) is a technology that is used to manage
MANAGEMENT (CRM) SYSTEM dealings with contacts, customers, prospective clients and clients. It’s a system that
enables organizations to build, maintain and manage relationships and streamlines
processes and interactions in an effort to increase sales, improve customer service and
inevitably boost profitability.
DRAWINGS Drawings are the amount of remuneration paid to the company owners.
FIXED EXPENSES Fixed expenses (also known as fixed costs, indirect costs or overhead costs) are the
expenses that cannot be directly attributed to a particular project (eg cost of sales).
HANDOVER A handover is when a home has reached practical completion and there are no major
defects. It is possible at the handover stage that some items remain outstanding but
they must not be considered major defects and the home is considered suitable to
move into, or in the instance of a remodel/renovation, be suitable for living.
This is also the point in the project where the client must make the final payment.

HUDDLES DAILY HUDDLE
A daily huddle is a short daily meeting, generally no longer than 15 minutes conducted
by a team leader to discuss tasks or plans for the day. The meetings maintain a
consistent format with the purpose of maintaining alignment and keeping the team
focused on the bigger picture and to help remove any stuck items that may be
preventing someone from progressing with their assignment or task.
WEEKLY HUDDLE
A weekly huddle is typically longer than a daily huddle, generally 30 minutes and not
longer than one hour to evaluate progress and discuss the strategy for the week ahead
and to ask for help if needed. Typically the weekly huddles address one or two main
topics.
KEY PERFORMANCE INDICATOR A key performance indicator (KPI) is a value that illustrates if a company is achieving
(KPI) its business objectives or not. KPIs must be measurable values so that organizations
can assess and calculate how effective their performance has been in achieving their
targets.
Many organizations measure high-level KPIs and low-level KPIs. High-level KPIs often
focus on overall performance of the business for a definite period of time, whilst
low-level KPIs often tend to focus on processes in business units, service lines or
departments.
LEAD A lead is a person that has expressed interest in your building company’s products or
services.
A lead is typically a contact at the first stage in the buyer’s journey that has entered
your sales process but has not been qualified.
LEAD GENERATION As an extension of the definition provided above for a ‘lead’, lead generation is the
(AKA LEAD GEN) process of creating interest and attracting consumers who express an interest in your
organization’s products or services. It is a marketing process or strategy that is utilized
in an effort to generate sales by drawing in a consumer, converting them into a lead and
eventually converting the lead into a customer or client.
It’s a strategy that is used to create awareness in your target market in an effort to raise
your organization’s profile making it more likely that you’re top of mind so that your leads
will eventually make a purchase from your company.
MARKETING QUALIFIED LEAD A marketing qualified lead (MQL) is a lead who is considered to be most likely to ascend
(MQL) into a sales qualified lead (see definition of sales qualified lead) compared with other
leads. This is typically assessed on certain criteria, such as having a phone number,
which enables them to be passed over to the sales team for further qualification.
SALES QUALIFIED LEAD A sales qualified lead (SQL) is an MQL that has been qualified by the sales team,
(SQL) typically after a phone conversation or an in-person meeting.
MARGIN GROSS MARGIN
Gross margin is your gross profit as a percentage of revenue.

NET MARGIN
Net margin is your net profit as a percentage of revenue.
MARKUP Markup is the percentage added to the cost of sale (eg labor and materials).

NET PROMOTER SCORE (NPS) A net promoter score (NPS) is a metric that measures your customer’s experience as a
percentage of ratings. The NPS also provides an indication of the organization’s growth
potential by rating the likelihood of your customer recommending your business to a
friend or colleague via their response to a key question.
How likely is it that you would recommend [your company] to a friend or colleague? The
responses will then fall into one of the following three categories:
Promoters – score range 9 – 10 – these are the raving fans who are the most likely
to continue business with you and also refer others to your business which increases
growth.
Passives – score range 7 – 8 – these are satisfied or neutral customers who are
susceptible to defecting to your competitors.
Detractors – score range 0 – 6 – these are unsatisfied customers who may be
potentially detrimental to your brand and reputation and hinder growth.
To calculate your NPS score, subtract the percentage of detractors from the percentage
of promoters.
NET WORKING CAPITAL Net Working Capital is the difference between your company’s current assets and
current liabilities on the balance sheet.
I.e. = Current Assets - Current Liabilities
OBJECTIONS MANUAL An objections manual is a document that captures the common reasons why prospects
either can’t or won’t sign a building contract. The objections manual would typically
outline the objections and then provide a method or strategy for the sales person to
overcome those objections in an effort to close the sale.
Objections form a roadblock for sales teams and therefore an objections manual helps
to guide the sales person through the recommended steps to take when a prospect
raises an objection/concern. Usually this is in the form of asking the prospect a series of
questions in an effort to uncover the real problem that is preventing the prospect from
moving ahead with the purchase. Typically the objections manual will then outline the
best possible response or action the sales person can take that provides a solution to
the prospect’s concern in an attempt to progress the sale.
ONBOARDING PROCESS Onboarding is the process of introducing employees to the processes, culture and
expectations of the business. The onboarding process familiarizes employees with
the organization with the purpose of providing them with the necessary tools and
information required so that they’re able to adjust to their new job as quickly and
smoothly as possible. Onboarding helps new employees become comfortable and
confident enabling them to perform at an optimal level as early as possible.
ORGANIZATIONAL CHART An organizational chart is a diagram that visually illustrates the company’s structure by
outlining the reporting relationships of departments/business units/service lines and
ranks of positions/jobs.
It’s a visual tool that explains the chain of command within the organization.

PERFORMANCE APPRAISALS A performance appraisal is a process that helps to manage employee performance by
identifying, assessing and developing a pathway to progression for employees to help
them achieve the goals and objectives of the organization. It is a meeting to review an
employee’s job performance and contribution to the organization by evaluating their
skills, achievements and growth. On the contrary, performance appraisals may uncover
gaps in knowledge, a lack of skills and growth that may have affected job performance.
A performance appraisal is a forum to provide employees with recognition, feedback,
career guidance and a development plan.
POST PROJECT COMPLETION Post project completion audits evaluate the budgeting and efficiency after the building
AUDITS project has been completed. It is a process that assesses the financial outcomes of the
project by comparing the planned or budgeted outcome versus the actual outcome.
These audits typically take into consideration costs, use of resources and results. In
most cases it assesses whether the project was completed on time and on budget.
If not, then the process works to identify where the problems occurred that steered
the project off course. It is a process that promotes ongoing and continuous learning
to foster improvement for delivering future construction projects effectively and
efficiently.
PRELIMINARY BUILDING A preliminary building agreement (PBA) is a contract that comes before the actual
AGREEMENT (PBA) / PRELIMS building contract. PBAs enable the builder to undertake an information gathering
process to be able to provide the client with a fixed price for the construction project.
Construction projects are complex and in most cases there are many steps involved
prior to commencement. Such steps include obtaining mandatory information,
for example, soil tests, development approvals, efficiency reports, certificates and
engineering reports.
A PBA enables the builder to obtain this necessary information to be able to provide an
accurate price and offers benefits to both parties in that it protects both the builder and
the client from unexpected or hidden costs throughout the building process.
REMUNERATION Remuneration is payment or compensation for work performed or services provided.

Typically remuneration includes wages, salaries or commissions but can also include
non-monetary allowances including, but not limited to, company cars, medical plans or
meal allowances.
SEARCH ENGINE OPTIMIZATION Search engine optimization (SEO) is the process of improving your website/site to
(SEO) increase your visibility in search engine results. The ultimate goal of SEO is to achieve a
high enough ranking in the search results in an effort to direct traffic to your website or
page. Good visibility in search results means you’re more likely to increase awareness
and therefore the attention of prospects. For example, when a user searches for
particular words or a phrase in a search engine such as Google, Bing or Yahoo, the results
that appear are the best matches for those particular words in order of ranking.
Many organizations may focus their SEO efforts on ranking highly for only specific words
or phrases that they deem crucial in attracting the right prospects to their site.

SUCCESSION PLAN A succession plan is a document or process that identifies the critical positions or
leaders within the organization and aims to develop and prepare staff in order to qualify
for those identified positions.
It is a strategy or process that endeavors to groom staff in an effort to replace leaders or
fill the organization’s critical positions.
It’s a workforce planning process that is designed to increase the availability, capability
and experience of employees to undertake these key roles as and when they become
available.
WORKFLOW Workflow is the balance of contracts that have not been invoiced. Not to be confused
with work in progress, or the sales opportunities currently in the pipeline. It is the
un-invoiced contract value for the existing signed contracts. To put simply, it can be
thought of as guaranteed sales. For example, consider you have $1,000,000 worth of
total contracts, and to date you’ve claimed/invoiced $400,000. The workflow figure is
$600,000; it’s the un-invoiced contract value.
WORK IN PROGRESS Work in progress is the difference between the forecast cost to complete, as a
ACCOUNTING ADJUSTMENT percentage of completion, and the amount actually invoiced. It is applied to a
construction company’s accounts at month-end as a journal entry.
(WIPAA)

The State of Residential Construction Industry (SORCI) Report 2024 by APB

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

The State of Residential Construction Industry (SORCI) Report 2024 by APB

Uploaded by

Copyright:

Available Formats

ANNUAL

Commissioned By: SPONSORS:

BONUS 1 BONUS 2 BONUS 3

SCAN HERE TO GET YOUR FREE COPY

06 Key Issues & Snapshots

4 The Association of Professional Builders

5 The Association of Professional Builders

Points Marketing remains a missed opportunity.

92.4% of builders are looking

6 The Association of Professional Builders

92.4% of builders are looking at

7 The Association of Professional Builders

8 The Association of Professional Builders

Again, the data supported the use of fixed price contracts

9 The Association of Professional Builders

10 The Association of Professional Builders

Which country What is

What is your role in the business?

CHOICES UNITED STATES AUSTRALIA CANADA NEW ZEALAND

CHOICES UNITED STATES AUSTRALIA CANADA NEW ZEALAND

11 The Association of Professional Builders

What type of work do you primarily target?

Choices UNITED STATES AUSTRALIA CANADA NEW ZEALAND

12 The Association of Professional Builders

What is your business model?

13 The Association of Professional Builders

What type 67.6%

CHOICES UNITED STATES AUSTRALIA CANADA NEW ZEALAND

CHOICES UNITED STATES AUSTRALIA CANADA NEW ZEALAND

Do you belong NO 97.5%

14 The Association of Professional Builders

How many projects do What is the contract value

1-5 39.3% $100K -

26 - 49 7.3% $1M+ 25.2%

Are you in business with a family member

15 The Association of Professional Builders

What associations are you a member of?*

CHOICES UNITED STATES AUSTRALIA CANADA NEW ZEALAND

16 The Association of Professional Builders

Does your business

CHOICES UNITED STATES AUSTRALIA CANADA NEW ZEALAND

17 The Association of Professional Builders

18 The Association of Professional Builders

Do you charge for quotes (either as part of a

CHOICES UNITED STATES AUSTRALIA CANADA NEW ZEALAND

19 The Association of Professional Builders

Do you have a documented Do you use sales scripts?

21 The Association of Professional Builders

Do you hold and/or Do you have an objections

What is your biggest sales challenge?

I DON’T KNOW 15.6%

22 The Association of Professional Builders

What percentage of your sales

0% 6% 11% 21% 51% I DON’T

How many referrals do you need

23 The Association of Professional Builders

What percentage of your leads

7.3% 3.0% 4.5% 8.3%

< 1% 1% - 3% 4% - 9% 10% - 15%

14.8% 34.2% 2.7% 25.2%

16% - 24% 25% - 99% 100% I DON’T KNOW

CHOICES UNITED STATES AUSTRALIA CANADA NEW ZEALAND

24 The Association of Professional Builders

How many paid leads do you need