By Linda Case. It's not often you get 50 top notch design/build remodelers in one room. And it happens even less frequently that they agree to share their hard-won insights. But that's what happened at a recent meeting I participated in. Let me give you the rundown.
As people started talking, it soon became clear that there are two types of businesses where a client can get both design and construction services. For ease of identification we used the terms design/build and build/design. Your company could choose either path and still be large or small, as well as profitable and certainly successful. The decision relates to the owner's area of interest and refers to the emphasis the company puts on design. Or, to put it another way, how owners see design in relation to construction.
If you're a build/design company, the emphasis is on build. Design is seen as a quick and necessary adjunct. Less time is spent in design, client options are more limited, and there's often less concern about whether design makes a profit or just pays its own way.
On the other side, the design/build company tends to revel in design, seeing it as an equal part of the service and often aiming to make money on the design side. Design/build clients are given more options and more time to get exactly the design they want.
Most of the remodelers at the meeting seemed to fit neatly into one camp or the other. A few could operate in either style if they knew which best served the client's needs. That's the optimal approach. Otherwise you'd be turning off one or the other client and your services would not fit their priorities. Or, you could have two different tracks and fee structures, depending on how the client wanted design handled.
This discussion unearthed another key nugget: In build/design, budget is king. In design/build, the scope is king. I've got to admit I've always preached the budget route but now I'm changing my tune. Would it be too much to ask a client how important design is to them? And in some subtle way to ask how important the budget is?
To be or not to be a profit center
Another area that's affected by the company's light or heavy emphasis on design is whether the design services function as a profit center. The July issue of REMODELING carried a discussion of this profit issue in "Design as a Profit Center". The design/build company is spending more time, more staff, more money, and more office space on design. Design/build remodelers probably charge more for it and want to make money in this key area of the business. The build/design remodeler may be less concerned that design make money. Breaking even may be fine.
The all-important handoffs
As company owners get their minds around offering design services, they begin to define and systematize two or three handoffs rather than just the one handoff from sales to production. If there is both a salesperson and a designer on the project, there needs to be a regimented handoff that specifies who does what and what must be in the package that goes to design. If the company is big enough to have a third person work on the design project -- an estimator -- there may be a systematized set of information for what is presented to the estimator and when. A word to the wise: Total quality management (TQM) always stresses information transfer from one person to another as an area fraught with error if not well managed.
It's fun and inspiring to see how this successful operating system evolves. Next month I'll bring you more hot news on what's happening to design/build around the land. --Linda Case, CRA, is founder of Remodelers Advantage Inc. in Fulton, Md., a company providing business solutions through a network of experts and peers. (301) 490-5620; email@example.com; www.remodelersadvantage.com.