Should you start a Design-Then-Build company?
Do you want to get to the next level in remodeling and add design work to your credentials? Have you been missing bigger jobs because you don’t offer design? If so, you might want to consider becoming a Design-Then-Build company. If you are considering this, take a look at some of the advantages, differences and obstacles you’ll have to overcome to be a real Design-Then-Build company.
What is a Design-Then-Build company?
In its simplest form, a Design-Then-Build company takes a customer from the very beginning of a project to the end. In other words, your company will design the project, make material selections, estimate the cost of the job, build the job, and warrant the job. This gives you complete control over the entire building process. I don’t consider a Design-Then-Build company to be an interior decorator, although many firms have interior designers on staff. The designer in our case helps create interior and/or exterior spaces that are functional, fit the client’s budget, and are compatible with the existing structure. Exterior additions should tie in nicely to the existing structure. One of your biggest compliments will be when observers tell you they can’t tell the new from the old. Of course there are times when that is not the intention, and the two structures are meant to complement each other, yet be very different in form. A good designer understands numerous styles and ages of structures and knows what to expect when remodeling them. He or she knows how to layout kitchens and baths, home theaters, living rooms, rec rooms, decks, exterior kitchens, lighting, even bath houses and pools. That’s a lot to know, but time, experience and continuing education will teach you all you need to know.
How is Design-Then-Build different from general remodeling?
General remodeling is done either with someone else’s plans, the owner’s or your sketches, or none at all. All of these should raise red flags, especially the ‘none at all’ plan. If you don’t have plans, you can’t possibly estimate a job with any sort of accuracy, nor will the customer know what they are paying for. If you go off sketches, you’ll quickly find out that there is insufficient information to deliver what the customer wants. When you use someone else’s plans, you don’t know if they are accurate or even feasible. You have to do your “homework” before accepting the plans and submitting a quote for the project. If the plans and/or dimensions are not correct and you ignore or overlook this, it will cost you money. If the project is not even feasible, yet you accept the plans, you could get in all kinds of hot water. At the very least you’ll have a very upset customer. For these reasons, I almost always re-draw the project myself (even if they are architectural plans), because I am the one who will be responsible for building it, and for several other reasons. I need to know exactly where everything is, including what is above and below the space in question. What walls are bearing? Is there a bath above this one and if so do the walls line up. This and many more questions will be answered when you have the drawings on your computer and can examine them closely. Having the drawings on your computer allows you to analyze the project in much more detail. And when changes are needed, or you want to demonstrate a better way to build a portion of the project, you can easily show this to the customer. Also, everyone measures differently. You know what dimensions are important to the success of your project and how you measure them. For instance, you may need not only the size of a window, but the casing to casing dimension as well. And how do you measure a door or a window? To the sash, to the inside of the casing, or at the supposed rough opening? In Design-Then-Build, this is all very important to a positive outcome. Having the drawings on your computer can also make it easier to do an estimate. Many drawing programs can give you an accurate material list, even if a roof is cut up and the foundation has multiple levels.
A Design-Then-Build company require different selling tactics.
Your company should be the first one contacted and involved in the upcoming project. Your salespeople need to understand how to sell the perceived value of the design. As in general remodeling, it helps a lot to give the probable prospect, a rough idea of the price. In Design-Then-Build, you need to be even more adept at giving a rough price, because you are asking them to invest in the drawings, design and estimate, before giving you a green light on the job. It would not be fair to tell your client that you think the job might cost $100,000 and then come in at $150,000. They will feel cheated if you do. In some cases you can’t give them a good rough price because the project is too cut up, too piecemeal, or too unusual. In this case you just have to be honest with them and explain everything as best you can. If they trust you, they will probably move ahead with the design.
A Design-Then-Build company has the luxury of helping with material selections.
You can choose the materials that have the best value and that you know from experience will be trouble-free. You can select products that your trades like to install and will stand behind too. As you select the materials and the design takes shape, you will gain a very good understanding of the nature of the job and how much it will cost. This is a tremendous advantage, and you should be able to run the job on schedule, because you know what’s involved and the lead time for materials; and on budget because you have carefully selected all of the necessary items for the job. If you run an organized company, then the gross profit should be very predictable indeed.
What are the capabilities of your present company?
Do you have the staff to run a Design-Then-Build company? You’ll need all the usual people, such as an office manager and a supervisor. You’ll also need someone to sell the design and project, and someone to design and draw the project. Many company owners do the selling, design and drafting themselves. Some even do the supervising as well. It can be done. Just don’t over-sell and lower your quality or customer satisfaction. The company owner is actually the best person for these duties because he or she knows the most about the entire process, not to mention that they have an incentive to achieve. Yet if you want to grow your company, it would be a good idea to make a plan where you eventually replace the irreplaceable you. You could start out with you and your office manager, and then follow your plan as you begin to grow.
What do you want to gain from being a Design-Then-Build company?
The use of your creative side? Reduce the margin of error on your estimates? Have more control over the project? The ability to schedule your jobs better? Being able to more accurately predict your gross profit? Do you want to sell your jobs for a higher margin? A Design-Then-Build company can do all of this. These are natural attributes of doing a start-to-finish job. You prepare your client from the very first about what to expect during the process. This is paramount to making a job flow smoothly and profitably. You set the terms and make sure that each item is accepted as you present it to the customer. By designing the project and choosing the products to be used in the project, you will have a good grasp on how much the project will cost. You gain control over the job as you design the job in such a way that it is feasible, and is built in a way that your crews are used to. Once your estimator has finished costing the job, he or she will be able to tell you with some certainty how long the job will take. When the customer is told that a job will take ‘x’ amount of days, and the job is done is ‘x’ amount of days, they will be overjoyed. Coming in on schedule is one of the most mentioned accolades of a remodeling project or custom home. If you organize your work properly, and execute your work plan, you should come in right on budget. Having a good process in place and having the right crew and trades, make a remodeling project almost routine. Sure, you’ll have the unexpected on every job, and an experienced estimator will know how to set the contingencies for these. Unless it is a large surprise, like the back wall being full of termites, you should be able to accommodate the customer and use your contingency money for these items, and still come in on budget. And the higher margins? You are a designer now, and contribute a great amount of value to the job. So you should get paid for your design, your material selection time and your estimate, in addition to the job. And you can mark the job up properly because you are perceived to be an expert designer and a builder.
Do you have a background in architecture or residential design?
If you do, that’s great. If you don’t, do you have a good understanding of home styles and their various designs? Do you understand classical proportions and scales? Many owners of remodeling companies have begun in the carpentry trade and naturally evolved into a remodeling company. As such, they have demolished, repaired and built many parts of a home and have seen many styles over the years. You may have a knack for drawing and designing spaces. If so, even if you aren’t formally educated as a designer, you can learn all that you need to know to become a residential designer. It will take time and a real inclination on your part, but it can be done and is quite worthwhile. Don’t think that you will learn this overnight. It will take quite a while to master all there is to know about design and drawing the designs. It will always be a work in progress, but it is a lot of fun and can be very profitable too. You will need to read about design. You’ll need to read about and/or attend the awards ceremonies where some of the great Design-Then-Build companies are honored for their superior designs. Read books like Sarah Susanka’s “Not So Big Remodeling” too, which will give you insight into various design options and the reason they are used.
In all the above you will notice one over-riding theme. “You stay in control during the entire building process“. This is not to say that you are a dictator or such. It merely places you in the position that your expertise demands. You are the professional and know how the process works the best. You will always allow, even demand, that the customer be very involved in the design process. After all it is their money and their home. But until you get your final check, you must be the master of your ship. Until the job is done, in essence, it is your “boat”.
Best of luck in all your endeavors. Please leave questions and comments on the form below. You comments are always welcome and I will respond to them in short order.
Please read the Part II of this article: Design-Build: What You’ll Need
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www.RemodelerBiz.com is published by Randall S. Soules, a 38 year construction veteran. The intent of this web site is to help builders, remodelers and those in the trades, create a rewarding career and lifestyle. At RemodelerBiz.com you’ll find helpful articles on niches, marketing, graphic standards and the design-then-build field.
