Should you go to an architect or builder first?
When building your dream home, everyone wants exactly that don’t they?
Perhaps you have a clear vision of what they want their new home to look like or maybe there is a particular type of kitchen or bathroom that you’ve always wanted.
An issue that often crops up, however, is whether you should go to an architect or builder first.
Architects are experts in their field so no one expects them to be cheap. But when it comes to costings on a project, sometimes their numbers don’t match up with reality.
Design versus build costs
Don’t get me wrong, architects are professionals who can assist you with the design of your home. However, they often don’t understand what it will cost to construct.
During your research stage – whether it’s for a dream home or a property development – one of the most important steps is to understand the costings. And when I say costings, I mean how much everything is likely to cost including all the fixtures, fittings as well as connections to services.Professional builders not only have access to trade discounts but they also have on-the-ground knowledge about current pricings.
On the other hand, architects’ estimates are often out by about 40 to 60 per cent on the eventual budget.
So, when deciding whether to proceed with a project, you must understand early on whether it is feasible or not. That’s why it makes sense to get clear costings early to ensure you’re not wasting your time and money.
Show me the money
Here’s the thing: more than 50 per cent projects that are based on an architect’s costings don’t get ever get built.
It really is a staggering percentage, isn’t it?
The reality is they don’t get built, because when the project is costed by a professional builder the numbers just don’t add up. A $750,000 build has become a $1.2 million one and your budget didn’t have a lot of wriggle room to start off with. A better strategy, before you spend big dollars on engaging an architect, is to find out what it is likely to cost from the professional who is going to build it.
Paying for a quote from an experienced design and construct builder is going to be much less than paying for an architectural design that has a high chance of never becoming a reality. A specialist builder can give you a feasibility or cost analysis based on what you want to achieve with the project, which gives you a sound platform to start from. There is nothing stopping you from engaging an architect after that point because at least you’ll know the ball park figure.
This is one of the most common mistakes I see when someone wants to build rather buy a home.
Sure, for some lucky people, money is no object but for most of us we must ensure we’re not over-capitalising on our new home or property development.
It’s always the best strategy to know the numbers sooner rather than later and the best way to do that is to talk to a best practice builder whose bread and butter is in construction not just in design.
Written by Kurt Hegetschweiler
Why charging for a quote is not only smart but essential
If you think that a free quote is “free”, you’re wrong.
The thing is a free quote is not worth the paper it’s written on.
In fact, a blank piece of paper is worth as much as a free quote.
Why is that?
Professional builders charge for their time and that includes the preparation of quotes. If you’re offered a free quote you are more than likely dealing with an amateur who just wants your business so they offer a “free” service that will always end up costing you more in the long run.
The fallacy of free quotes.
In my experience, the types of builders who provide free quotes are also the ones that run a “one-size-fits-all” business.
Their “quotes” involve little more than gross generalisations of what the project may – and usually will not – cost. They utilise an overworked estimator who churns out hundreds of cookie-cutter estimates every year. You might think your project is unique, but these cowboys think they’re all the same. The free quotes on offer provide little more than generalised rates based on square meterage of construction so that it seems like a competitive price.
What follows a free quote is plenty of promises to ensure that you say “yes” and not “no” to them.
Then what do you think happens?
Well, it’s inevitable that once you’ve signed on the dotted line that you’re faced with a plethora of variations, which all cost money of course, as well as delays and disputes during construction – again these all cost you money you probably haven’t budgeted for.
At the end of the day, even if your project is completely adequately, it’s highly unlikely that your free quote resembles anything close to what you ended up paying for the build. And that doesn’t even take into consideration the cost of litigation if such a turn of events comes to pass.
The value of paying for a quote.
Contrary to the scenario I outlined above, a professional builder will charge you to prepare a quote. They do that because they are professionals and will spend the required amount of time to understand your project and to price it correctly.
Whether you’re a home builder or a small property developer, to improve your chances of a successful outcome, you must work with someone who is prepared to put in the time and effort to provide you with a detailed quote. You need someone who is going to sit down with you, compile the bill of quantities, shop out the costings and provide you with an accurate quote.
Preparing a detailed quote takes time and it’s only fair and reasonable that a professional would charge for its creation. Professional builders do not provide free quotes in an attempt to win your business.
Instead they charge a fee for their service.
Would you work for free if you had spent hours preparing a quote which includes pricing the cost of subcontractors as well as fixtures and fittings?
No, of course you wouldn’t, Unfortunately, the prevalence of “free” quotes means that some consumers expect this as the norm.
But it’s not.
The norm is for a fee to be charged to provide an accurate quote for your project, which is small change compared to costly variations, delays or litigation. I suppose, at the end of the day, it comes down to whether you want to pay a small fee up front or a very large “learning fee” at the end.
Written by Kurt Hegetschweiler
A Better 2022 is a Few Questions Away
There’s nothing wrong with a little forward planning. 2022 is just months away, making now the perfect time for some clarity and focus for the year ahead. Answer these simple questions to identify your drivers for next year.
- What was the most important decision you took in your business this year?
- What was your best quality as a leader this year?
- What was the best piece of advice you got, book you read or course you took this year?
- Where were you most focused this year?
- Which moment / single event was your proudest this year?
- Which two actions brought about the biggest results?
- Where were you most inspired this year?
- Which three most important qualities will dictate your performance next year?
To help you on your way, here are some powerful insights from my good friend and life coach Martyn Hume Cobbe.
Would you build a house without plans?
If you wouldn’t build a house without plans then why would you build your life without a clear plan for how you want it to be and how to achieve it? Maybe to avoid disappointment if it’s not achieved?
But if you fail to make a plan, you’re guaranteed to be disappointed. The first step in a creative process is getting clear about what it is you want to create. The design might evolve throughout the process of creation but how can you commit fully to action, focus your energies and make all the necessary decisions required without a clear outcome in mind?
In the life planning process, step 1 is establishing the goal – what you’d like your life to be in 3-5 years time. This picture includes your relationships, physical environment, your work life, your health and your experience of living, just to name a few.
Step 2 is getting really clear about your personal resources, your drives, your strengths, your natural abilities and your values, for these are what will empower you and keep you on the pathway to fulfillment.
Step 3 is to eliminate any limiting beliefs that arise as you start moving toward your desired outcome. These are bound to arise because they are the primary barriers that have prevented you from already achieving your life goals.
This three-step process is about creating a map of your life and then creating and installing an internal compass. This compass will keep you on track and in the right direction as you come to the many forks in the road.
The amazing thing is that, when you know you’re on the right path, you’ll find a wonderful sense of gratitude in the now and an innate ability to enjoy the journey as it unfolds…
Don’t Race to the Bottom
It’s incredibly tempting to engage in a race to the bottom. We can extort workers to show up and work harder for less in order to underbid a competitor. We can take advantage of less sophisticated customers and trick them into buying items for short-term satisfaction and long-term pain. We know how to do this. There’s always the opportunity to cut a corner, sacrifice integrity and quality and suck it up as we struggle through this lean period.
This might bring more cash-flow for now, but not for long and not without dire consequences down the track. Someone will always find a way to be cheaper or more brutal than you.
The race to the top makes more sense to me. The race to the top is focused on marketing, design, respect, dignity, guts, innovation, sustainability and client-centric generosity, making for a much more positive process. Best of all, the race to the top is the long-term path with the desirable profit outcome.
Your margins give you lifestyle and options so a few percent in gross margin could mean plenty on your bottom line. For example – if you’re turning over $2 million and you move from a 15% to a 20% gross margin, that’s a $100,000 and probably around a 50% (or more) increase in your net profit. So how do you go from 15% to 20% you ask? Here’s five ways:
1) Design a marketing system that allows you to put 1% on your pricing.
2) Identify your biggest inefficiencies on jobs to save 1%
3) Shop around and shave 1% of your materials and subbies
4) Target higher margin jobs for another 1% increase ie. jobs with higher labour or carpentry content.
5) Shave 1% of your running costs
This all takes a little time and analysis but it’s well worth the additional bottom line result.
If someone selling a flat-screen TV can give you options and deliver value to the extent that you’re prepared to pay more (ie. extended warranty or free delivery), you should be able to do a hell of a lot better on a new home or renovation. Don’t settle for lower margins because that’s what everyone else is doing. The big problem with the race to the bottom is that you might win.
