About the Heartbeat

HBS includes a group of reports referred to as “The Heartbeat Reports.”  These reports are specifically designed to include information to help you manage your business more effectively.  The data included is consistent with best practices taught by our industry’s finest consultants.

Project Backlog

The Project Backlog report gives you a quick view of your work in process as well as those projects that are keyed up and ready to start.  The main purpose of this report is to allow you to quickly determine whether you have the homes under construction and ready to start to achieve your monthly goals for closings.  Based upon your project build time (in this example, 150 days), you can forecast how many homes you have in your queue to meet that goal.  For instance, if you need 15 closings over the next 150 days, this report shows that you have 9 pre-sold homes under construction and specs under construction – all to be completed within the duration.  So, you know you can meet your goals, but you will have to sell the 6 specs and close them within that duration to get there.

Closing Schedule

The Closing Schedule report forecasts the timing of closings of the homes you currently have under construction that are under contract as well as the dollar volume of those homes.  It does not include specs, but it clearly shows you where you will exceed or fall short of your target.  It also includes the dollar value and number of homes closed during the previous calendar year to give you perspective of how your business is fairing against the prior year.

Gross Profit

The Gross Profit report provides you with a view of forecasted gross profit on the homes you have under construction.  Even if you’re focused primarily on the number of closings you can project, a more important number to review is the gross profit dollars associated with those homes.  Due to potential degradation of planned profits for a project, you may need to add another to the mix to meet your overall profit goals.  This report helps you make that decision.

Gross Profit per Start Date

The Gross Profit per Start Date report is critical to meeting your goals.  It details the gross profit of each home you start and accumulates in each month you start them.  The idea here is that you can’t get a home to close during the period if you don’t start it 150 (example) days earlier.  So, it’s imperative that you manage your starts so that you have the homes to close that you need.

Profit by Project Origin

The Profit by Project Origin report shows you the gross profit you actually earned from homes you started as contract homes (pre-sold) and the homes you started as specs. This is important because a home you build as a contract home establishes the price up front.  With a spec home, you can price it later in the process.  What you are reviewing with this report is whether it’s more profitable to build specs and sell them or to build contract homes.  In most companies, there is a distinct difference between the gross profit of each.

To summarize, if you are running your company on a budget, you need to have this data to help you manage your company from the front end and not be reacting at the last minute to information that causes you not to hit your target.