NAHB 20 Clubs Celebrates 20 Years of Helping Members Grow Their Businesses
Encouragement and coaching. These are the words that come to mind when Bruce Williamson, president of Domas Custom Builders in Etna, N.H., thinks about the NAHB 20 Clubs. "Running a business can sometimes be a lonely job," he said. "The idea that I could talk to other builders about anything and everything associated with my business without being concerned about marketing conflicts, was fabulous." Williamson said that’s what drove his interest in the 20 Clubs, 20 years ago.
The 20 Clubs is celebrating its 20th anniversary this year. For him and many others, the 20 Clubs provided and continues to provide a unique opportunity to network, share business ideas, communicate and learn from other leaders in the industry without the threat of damaging business prospects. "The 20 Clubs are about making you better than you already are," said Becky Hines, owner of Signature Custom Homes in Milton, Wash. "It’s been 20 years, but every single meeting I still come back with some nugget, some gem, some thing I want to change or add to, and that’s part of what makes the 20 Clubs valuable."
Business isn’t the only benefit to be found by joining the 20 Clubs. Lawson Calhoun, president of Calhoun Properties in Atlanta, noted that his club—Club 1, the Hammers—has become more than just colleagues to him, they’re family. Williamson, Hines and Calhoun are all founding members and belong to the same group. "We’ve been in a position where we’ve mediated marriages, facilitated divorces when the marriage wasn’t able to be reconciled, celebrated the birthing of children and grandchildren, and just all sorts of activities," Williamson said. "If a person is totally committed [to the club], it can be an amazingly powerful thing to be a part of."
The 20 Clubs is a networking program for residential construction chief executives officers created to encourage members to learn from each other by sharing best practices, successes and failures. Each club is comprised of members from across the country and Canada. Prospective members are matched up with a club through a detailed profile based on the type of property they build, their average sales price, the average number of units they build annually, the average square feet of each home built and the annual volume produced each year. From there, placement is narrowed down by personality. "Each club has its own personality and own identity, so whereas someone may fit a club over here, they may not fit a club of the same type of builders elsewhere," said Kim Bailey, NAHB executive director of networking program. "It’s about talking to the members of the clubs and finding out if it’s the right fit."
Although many members participate or have participated in other types of networking groups, Bailey said the 20 Clubs is unique. Unlike the CEOs of banks and grocery stores, who may not really understand their business or product, 20 Club members can give each other strong, sound advice for the decisions they’re thinking about making, she said. For example, Club 6 (the Doors) created a board report that starts out as an eight- or nine-page template and becomes a 25-page report that highlights each member’s company. The members share the report prior to their next meeting and during the meeting each company is reviewed and asked tough questions meant to help each individual and each company grow.
Stan Custer, president of Custer Homes, based in Harrisburg, Pa., another founding member, said participating in the clubs has been a great learning experience for him and his company. "Each member brings different ideas and strengths to the club and I think being able to compare financials, benchmarks, contracts and just the way we do business has certainly helped us out, as well as the SWOT visits," he said. Custer explained that if a member of club is having problems, group members travel at their own expense to the builder’s location, interview employees, trade contractors and clients, analyze the problem and come up with a detailed plan of action to help their fellow member work their way out of the problem. They call this a SWOT (Strengths, Weaknesses, Opportunities, and Threats) visit. "I’ve participated inhalf a dozen of those over the years and I’ve found that those participating receive just as much as those receiving the SWOT," he said.
Williamson was the recipient of just such an intervention. Though it is difficult to talk about some of the changes he made after the team’s review, he said the SWOT saved his business. "I remember when I had the group come in to look at our business and they made a bunch of recommendations," he said. "One was a very difficult. They recommended I fire someone. A person who had been with us for a long, long time." Williamson said it was difficult for him to make a decision regarding the employee because he simply did not have a basis for comparison. "The group came in made it clear that based on their experience I wasn’t asking too much of the employee and that they just didn’t fit in that particular role," he said. "Sometimes you can’t see it’s the right decision by yourself and you need the encouragement and experience from others to actually make it happen."
Calhoun agreed and said that if it weren’t for the 20 Clubs, he too would be out of business today. Right after Sept. 11, 2001, he found himself in a dire situation: excessive inventory and very few prospects. "I’m convinced if it had not been for their help, I would not have survived," he said. His group offered guidance to him in a number of different areas, particularly personnel, marketing and promotions. But the emotional support he received, meant the most, he said. His club has also assisted, at various other times, with refining systems and processes to make his business run more efficiently and improve the customer experience.
NAHB formally developed the 20 Club program in 1994, about a year after the concept surfaced during a Small-Volume Custom Builders Committee meeting. Custer said that before the 20 Club program was created, he attended the national conventions and Custom Builders Symposiums, and got a lot out of those events, but still felt there was something missing. Hines agreed. She and her husband were young and new to the business and felt there was a lot they needed to learn to be successful as business people and builders. They started attending the Custom Builders Symposium and loved it, but their favorite part was talking to other builders and trading "how do you do this" stories, she said. So when NAHB put out feelers to see if anyone was interested in participating in the 20 Club concept, they jumped on the opportunity. Of that first meeting, held in San Diego in conjunction with a Custom Builders Symposium, Williamson said he remembers the group being a little awkward but certainly interested and excited about the new venture.
Hines said she and her husband could not answer many of the questions other builders were throwing at them. "Profit margin? What’s a profit margin?," she quipped. Calhoun noted that the level of sophistication among builders then was nowhere near where it is today. "We’ve progressed tremendously. Prior to the formation of the 20 Clubs, I saw that a majority of our club’s members had a job and not a business," he said. "They simply weren’t well organized and didn’t have systems in place and such." Calhoun said technology facilitated the change, but the educational process—both formally and informally (just sitting around discussing ideas and concepts of what works and what doesn’t work)—is what really elevated the 20 Clubs to its present level of sophistication.
After some discussion among the founding group, NAHB staff set up the 20 Clubs as a program instead of a formal committee so it could function as a self-funded and self-governed entity. This gave members more freedom to organize the program to best fit their needs. 20 Club members participate entirely at their own expense; dues paid are in addition to NAHB membership dues. The per-club membership fee is $13,675, divided by each member. So a member in a group of 20, for example, pays roughly $700 a year, in addition to out-of-pocket travel expenses.
But members say the benefits are worth the expense. For one, the return on investment is significant. Statistics show that club members consistently double their net profits in their third year of membership. "One member actually said he’s grown 350% since joining the 20 Clubs," Bailey said. "The group basically becomes the board of directors of your company. You’re able to speak openly about your plans with men and women who are not your competitors and who completely understand your business and exactly what you do."
The knowledge and education shared in club meetings really allows members to improve company systems and their numbers. Bailey attributes this in part to the vast range of experience in the 20 Clubs. There are nearly 400 members—ages 35 to 70—many of whom have been through more than one recession, and several others who are just getting started and have an altogether different perspective on the industry, she said. Each 20 Club group holds two meetings per year, facilitated by NAHB, and each group has the opportunity to participate in a large joint meeting every other year. Members also keep in touch throughout the year through private club listservs, a bi-monthly newsletter and as-needed conference calls.
Additionally, members receive access to the 20 Clubs Annual Financial Comparison report, an exclusive benchmarking tool that allows members to compare their businesses with other members in their club to see how they are shaping up financially. The report is issued twice a year, once in the Spring as a comparison to individual club members, and once in the Fall as a comparison to all club members. To a person who has not joined but may be considering joining, Calhoun said that he would advise them to strongly consider making the move. "It is the single most important thing I’ve ever done for my business," he said.
Bailey encourages prospective members to speak at length to club members and to share openly and honestly what they’re looking for and what they can give a club in return. For those that have just joined, she says, honesty is the best policy. "If they cannot be honest about who they are, where they are and where they want to go, they’ll never gain the benefit of the program," she said. "Inevitably, they’re going to hear some things they don’t like, but it’s all said for the betterment of them and their company."
For more information on NAHB 20 Clubs, contact Kimberly Bailey, NAHB’s Executive Director of Networking Programs at (800) 368-5242 ext. 8255 or at KBailey@nahb.org or you can go to www.nahb.org/20clubs.