Who says clients don't pay for modeling?

[Bduerr]

I am new to Chief but I have used junky cheap software in the past. I jusst received my new V10 box yesterday and when I finish firing it up and get into it, I will not import my old plans I made in 9.54. Why? Because I have become soproficient in Chief in just a few months that I can create what I had on the provious version in just a few hours. Also, by starting from scratch I can probably avoid import problems and compatibility problems.

Here is an interesting true storys: I took my rough plans with the wall for my addition up to my HVAC guy. I showed him the plans and asked for his opinions and more iomportanlty his needs, ie space for ductwork. The last person to come to him at that stage with a set of plans like mine was over 10 years ago and he installs 2-3 furnaces per week. It blew him away that I was able to ask him what he needed before I had locked him into something that made his life difficult. With a few clicks of a mouse I was able to build him the shases he needed to make his life better, and make my HVAC run better.

Then yesterday I went into a fireplace store to look into getting some fireplaces placed in my addition. I entered plans and computer in hand. After looking over the units I had the dude pull the rough in specs and I went to work. 15 clicks later I had installed two fireplaces in my plans that were pretty close to what he was offering. He had never seen 3D viewing of any plans and this fireplace shop has been around a long time. The whole store was gathered around my computer.

The power of 3D viewing is wonderful, but it is a tool that the old schoolers will have to get used to.

[lbuttery]

My partner and I just landed a contract with major remodeling builder and they pay 3% of project cost for design of as-built and re-model and working drawings to go to permit.

They only do projects $100K and up, so if we work with smaller builders we will probably charge a sqft cost of $2 - $3 or a minimum fee which we are still trying to determine.

We work in the DC metro area. for projects outside of the area we may lower the sqft or minimum to be competitive in that
market.

I like the 3% of project cost as it lessen's the need to haggle over each project. For our first project we are taking 2% and will work torwards the 3% level as we "prove" ourselves.

Our first project was done as a freebie for a smaller builder but it was very instrumental in landing the contract with the major builder so it payed off and was very helpful to our learning curve.

Onward and upward.

[gpickren]

lbuttery, do they go with you to make the sale or do they make the sale and then send you out to do the as-builts and the design?


If the job is a 400' kitchen remodel and FR addition being attached to a 1700' house how many feet is the fee based on?

[lbuttery]

I will be going to meet the customer along with the builder
The builder will determine scope/feasability of project and cost. I will listen to customer's wants/needs and base re-model on that and input from builder.

I would then meet with the customer and builder for up to 3 drafts (minor) of the re-model before requiring an additional fee
either flat-rate or hourly.

If we were to charge by sqft I would do it by area of as-built and re-model that we actually model. If they only want a kitchen re-model then we would only model that room. This is where the
"minimum fee" might have to be used.

I prefer the 3% of project cost as this builder won't touch a kitchen re-model under $100k

[gpickren]

This sounds like a good alliance. I do a similar thing, but right now I have been helping remodelers who have not done design/build and if they are not, they are really not selling, but just bidding jobs. Design/build is an entirely different animal, and far more profitable.

Your remodeler already has a sales/design system in place and is producing the sales leads so right now your role at the sales appointment is sales support. Kind of like when the computer system salesmen used to bring their technical people along who could answer the questions the IT people would bring up that would stump the salesman.

If your remodeler is a good salesman he will bring you in to demonstrate thingsduring the sales presentation. When I say "sales presentation" I don't mean that it is a formal structured presentation. If it is a good one it will not look that way, but will appear natural and spontaneous. But a good salesmen knows where he is going while the customers do not, so he teaches, explains and demonstrates as he seeks to make the customers comfortable about something that is actually quite intimidating to most of them. I have known a fair number of architects and contractors and I think I can confidently say the ones who were the most successful were those who were as skilled in managing the customer as they were their jobs.

If these guys are pros this is an ideal situation for any Chief designer to work in. Especially if one has not had this kind of experience. If your role is just to design then you get paid for that, but if this remodeler has not used the kind of tools you provide he should find his closing ratio going up, number of design meetings being reduced, job sizes could increase as well. Then, you learn to work with him in his estimating, providing him with appropriates material lists to help him in his estimating. Some of these values seem dead on accurate, others are harder to pin down, but I don't think there is a contractor alive who doesn't hate the paperwork of estimating.

As one develops expertise in these things one can become essential tothe remodeler. He could reach the point that he cannot even conceive of doing an appointment without you. If he is fair he will see your value in this and as you become a part of the sales team your value added should be compensated. If not, your experience will have taught you how to do this for others or for yourself.

I went to a meeting yesterday for a remodel that was to expand and remodel a kitchen and FR. The house was built in the late 50's and had an 8' breezeway under roof between the kitchen and DR and the garage. As soon as I drove up, I knew I already had their layout in my laptop. I had done another home 15 miles away which had a very similar external appearance and internal layout.

The owners got very excited as I showed them the process we had gone through with the other job. Showed them the as built photos, then how we progressed through the design, showed them renderings and then gave them a tour of the house with a live Chief model. We left with a contract and the job has expanded to do a whole face lift on the house, increasing the size of the garage and redesigning the master bath.

It was pretty funny. Here is this guy with the new wife who thought he was perfectly satisfied with the pale blue tile on his counter and shower. His wife says, "This has got to go." So I said, "Well, if you don't like the counter, then we need to redo the shower." So then we explained that since she wanted to redo the most expensive things in the bath, why not have us gut it and redesign so that it really functions as a bathroom for two people. So that was added on too.

The garage addition came up because he has this antique Bentley that is probably worth half the value of his house. So we showed him that by changing the garage it would balance the look of the house which is now one sided. The new wife is selling a house that is worth three times what his is so Iknow where the money is coming from and who is driving the sale.

This is where one adds value. It is not just design or draftswmanship, even contracting. It is sales and marketing. If one can do this and make deals happen, drafting fees will not be an issue. Salesmen get paid also, you know. If you can do both, you can get paid for both. If you generate your own leads, there is value in that as well. This is not for everyone. Different people have different skills. Some people are not comfortable dealing with the owners and would prefer to just design and draft. In that case, then creativity, practicality and efficiency are where you make money.

I think the % fee is probably a good one and fair to both sides because there is a lot more time spent in detailing a $100,000 kitchen than a $25,000 one of the same size. In fact, it is probably faster to do a design on a $100,000 house than one of those kitchens.

But, the key is to continue to honestly examine what you are bringing to the table and try to make the most of it.

[lbuttery]

Your post illustrates the other aspect of our business model
as I am a teacher by nature (and training) and will be doing presentations to the client as you recommend.

I don't see us getting into the estimating market and prefer to leave that to the builder. I have too many other areas of Chief to learn for now.

The builder has been doing design/build and they have architects (including one of the owners) on staff using Autocad.

They were working with a Chiefer but he became a problem and they sought out another Chiefer and ...

They want to do Chief for the sales presentation and the working documents for permits.

At the moment they see us doing some of their projects, maybe in time it will become "all"

[dgavin]

G,

All good points. I also am finishing a ranch with a breezeway to the garage. When they saw the proposed design rendered in CHief they were speechless. At first I thought they didn't like it. In fact they just couldn't believe it was there house and were really speechless. Things proceeded seamlessly from there. I wish they all went so easily.

[gpickren]

I don't see myself getting into estimating either, but unless the contractor is an experienced Chief operator, he cannot use the tool either. But, in the interest of doing value added I have been looking a ways to deliver material quantification that can assist the contractor. Many of these items such as window and door schedules are no brainers. We put them on our plans, but I do find many contractors who use Excel so I am just looking at things I could confidently export that would help alot.

Such things a floor area, roofing squares, drywall area, base, trim and crown, electrical all seem to be absolute. The area I see difficult with is lumber. I don't fully understand all this, but it seems that many of these symbols we apply for rendering purposes may not pick up on a materials list. Like soffits that represent beams, or post, or solid polylines, whatever we should be using here (I am still in somewhat of a fog here) It seems this is an area where there is room for error, perhaps a big one.

In any event I would like to provide the contractors with a schedule that would help him. Things that are luxuries can soon become necessities and if this helps the contractor to be more efficient and serve his customers better that can only be good for me as well.

I would appreciate hearing from any of you who have experienced using the materials list in building and estimating.

Glen

[gpickren]

Hi Dennis, One of the advantages of living around more people than you can count is tract houses. Depending on the neighborhood we could have 20 or 200 of the identical model in the neighborhood. So this is another case where Chief materials can be a very powerful sales tool. We will put flyers out on every model in this tract. Not only is a great amount of time saved in designing the next one, think of how much better the next one is for the contractor, especially if he can build them in sequence.

A very good customer began to experience this a few years ago and became perhaps the first remodeler to be able to operate like a subdivision builder. He usually started a tear down a month, with a few remodeling infills none of which was more then 5 minutes from his house. Easy to supervise. Easy to find the subs, they were on his other job. Great for pickup work, you name it. Good design, good workmanship, good service combined with a little marketing boost can make all the difference.

When he would speak to an owner he could tell them exactly what was in their house and his crews knew also. All the blue sky came out of the bids.

[Tim Schrock]

Lew,

Not to burst your bubble, but to give you some goals, I know a guy in the DC area that is charging 6% for the same things you mentioned - as builts, design, and construction docs for permitting. Plus he adds 10% if he sells the project (ie. brings the homeowner to the contractor in the first place)

[gpickren]

These two examples are not in conflict. It sounds like to me that the guy in DC is fully experienced in making the sales. Note that sometimes he makes the sale himself and brings in the contractor. Other times he sells the contractors lead. I will bet you that he deals with contractors who could not do either the design/build sale or the design without him, therefore he is worth whatever he can get as long as he doesn't load the deal with so much on the front end that there is no profit for the contractor. This is what I meant by value added.

In contrast Lew is dealing with an experienced design build firm which is already capable of performing all of these functions and are simply interested in enhancing and increasing what they are already doing. In that situation Lew gets paid on on job training while learning to implement and sell design build. Very fair exchange here. This firm is saying that they would like to use Lew on some of their jobs. Fair enough. Lew apprentices with them and profits when he can add the value of his new expertise to a less sophisticated contractor who can greatly benefit from what Lew has to offer.

The difference in pay is the difference between and employee and a principal. There is a different market value for each. I use to hear this type of thing at NARI meetings all the time where contractors seemed to think a contractor's license came with an entitlement to a profit. Most of the talk was about their trade and they generally had nothing but contempt for such as sales and marketing, or even worse, financing. I should say that I understand that NARI is much stronger in other states, but none of the most successful remodelers I know in Calfornia are NARI members.

Whether ones business is contracting, architectural design, or installations, there is a trade or craft aspect and a business aspect and ultimately it is the business skills that will limit or enable success. I remember similar discussion on Remodeling Magazine's forum several years ago. A good carpenter may not be a very good general contractor. A good designer or draftsman may not be a good owner operator of a design business.

One of the most talented designer/draftsmen that I have ever met does plans for 25% of what I could charge if I was making his sales and appointments (This is a fact, because I did exactly that and used him to do most of the work) but he cannot get any more because he simply cannot manage his time and return phone calls. So he gets clients who will stick with him because I have never seen anyone who is more productive in front of a client and they will put up with his poor service because they know they cannot touch his price. He has everything he needs to be successful except business skills and judgment.

There is much to be learned working for someone if the boss is willing to train and the employee is willing to do the work to learn and be productive. Then, he can help another trainee just as he was helped. This is as it should be. Lew may be getting a very good deal and a fast track to being able to offer the kind of service the DC guy gets much faster than learning by trial and error.

[mcqueenhomes]

...this builder won't touch a kitchen re-model under $100k

Wow. A couple years ago I bought an entire two-bedroom house for $70K.

[Tammy Donovan]

I am currently in negotiations with my main client. He is a contractor that wants to hire me on full time for my design services. At present we are discussing a pay of 2% of all jobs sold, with a minimum guarantee. He also only deals with customers that are over $100K. Most jobs are remodels or additions, with the occasional sunroom and deck. Up to this point I have worked for him as a By the hour subcontractor. $21/HR. not bad in the scheme of things, but at 2% I will be doubling my rate! He has seen the value of showing the project to the customer in 3D as a sales tool. I will be entering as a Designer but have a future to learn from him the sales end of the job. With that I will also increase my %. So there is definite room for growth.
As for using Chief...
I have to agree with Glen,(previous post) We are only limited by our own experience!
I think that this software has made it easier for a designer (or anyone drafting) to get the ideas on paper without the holdup of trying to figure out if the x,y coordinate is correct. I love the freedom of being able to just draw. A wall is a wall, not a bunch of points that have to be connected, then filled in, etc. I'm sure you get the point. That is what I have been trying to relate to people that I have worked with in the past that insist that it is not really drafted if it is not in CAD. To them I say .. Cad seems great for mechanical stuff, for technical stuff, but to truly show a design to a client with reality I will take Chief any day!
The job can be done faster and more efficiently, therefor creating a faster turnaround. Less time on the job means more $$ in the pocket, or more time to make more $$. And aren't we all in this for the money.... well at least a little bit. I have to say that I truly enjoy doing this!
Just $.02 from Chicago!
Tam

[Tim Schrock]

GP and Tammy,

I'm not trying to make anyone upset here, just trying to offer that there is the option of making more.

My friend in DC actually works for several remodelers who have full-time staff in house, and turn $2-5 mil in remodeling per year. Many of them have sales, and design staff, but they are still in pain, or they wouldn't be using my friend's services. Yes, you are correct, it is the case that our own selves limits our ability to make money.

I was just trying to encourage Lew, and Tammy now as well, there is a reason that those contractors are wanting to use your services...they see a benefit to their companies. If they are benefiting (and they are), then so should you. I could very well be wrong, so I stick my neck out. It sounds that Tammy has a decent situation going if you're going to be on his payroll.

In my situation, as a subcontractor, the contractor doesn't have to pay for software/hardware upgrades, phone bills, meeting/driving time, sick leave, personal time, benefits, retirement, marketing, training (both on Chief and continuing ed), real-time collaboration tools, unemployment insurance, Payroll taxes, cell phone.

There is a way to make more whether you're a contractor or designer. I have both seen it and experienced it. But, not everyone wishes to do so.

[lbuttery]

GP:

Well said.

Tim:

I see your point and it is encouraging that there is still room to grow.

For now, having just started in Oct. I think 3% is a good
place to be. The 2% will hopefully be for this first project and maybe one more (maybe 2.5%).

After we have a number of projects under our belt then It's nice to know that 6% is doable.