When the going gets tough

During the hot housing market, construction industries got used to summertime and the livin' was easy.

During tough times, says Norma Havens, a principal at the Reno-based sales training company, University of Street Smarts, executives they need to widen their peripheral vision and change their mindsets.

"You've got to break through the assumptions built up like a crust around you," Havens says. There are opportunities, she adds. They're just different opportunities than in 2005.

Havens shared her tips during a recent Builders Association of Northern Nevada seminar.

Seminar attendees know 2008 is not going to produce the turnaround they've wanted, says Don Reed, vice president of business development at Forma Home Systems. Headquarted in Danville, Calif., the company manufactures in Fernley.

"Our industry is one of cycles," says Reed. "It's a matter of how many housing cycles have you withstood and remained in business. A builder today is very cautious."

The question to ask, he says, is what will the buyer want in the future? Prepare now to produce that.

Forma Home's strategy, says Reed, is driven by frequent visits with builders in the markets served by the company. He points to a movement from mass-marketed subdivisions to smaller, lower priced product, saying, "Affordability is the watchword of the day. However, the higher-end market still has some strength in it."

BayStone Group, Inc., meanwhile, learned from an earlier downturn. The company manufactures architectural stone elements with a foam core at a Sparks plant. It installs the product at building sites throughout the West, says Gary Taylor, general manager at the Sparks location.

But the company, which once derived up to 85 percent of its income from a wall-finish product, was forced to retool during the decade past when that finish fell out of favor.

"We could see it coming," says Reed. "It started on the East Coast and kept creeping toward westward."

In response, the company fired up all rockets to bring an architectural stone product to market.

Both old and new used a similar support shell: fiberglass mesh and acrylic base coat.

Despite housing industry woes, says Reed, "We've seen no slowdown in upper- end residential. And commercial demand remains strong; from retail to office to specialty such as casinos."

The company plans to expand employment at its 20,000-square-foot Sparks plant from the current 10 to 20 in a few months and at least 60 by mid summer, says Reed. It's headquartered in Hayward, Calif.

Havens acknowledges it's not easy to survive in a downturn. "You play the hand you've got. What are you going to do to get your share?"

A key, she says, is the realization that customers are suffering as well.

"It's not about what you're selling. It's about what they're buying. When market shifts, they're buying for different reasons."