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Design vs. Budget

Understanding the budget goals of a project requires a good understanding of construction costs. Conceptual and preliminary estimating available during the design process can prevent surprises and manage the design to the budget. Many projects have remained on the drawing board after owners discover that the cost to build is over their budget.

Designing to a budget is an effective way to ensure that a design gets built. Once again, by beginning the estimating process during the design phase, surprises can be minimized. When establishing a conceptual budget, we have some tricks that help us understand the owners' needs:
  • Architectural Digest, Southern Living or DIY magazines
    Depending on the type of design magazines that the owner prefers, we can get a hint of where we should establish a budget. The high-design and details shown in Architectural Digest are demanding and some builders may have difficulty achieving the level of quality; Southern Living magazine demonstrates attention to detail but is not as demanding, and; DIY is usually about achieving bang-for-the-buck at the best price.
  • Aluminum or Wood-Clad Windows
    There is a broad range of window preferences among many home buyers, from: specific name-brand high-end products, to; no preference at all. While the wood-clad windows are more expensive, the preference is often driven by demand to achieve a high level of quality and performance. These expectations can influence many of the other products and systems within a home.
  • Appliances and Plumbing Fixtures
    Appliances and plumbing fixtures can be large ticket items within a home's budget, but the customer selection has more to do with the overall budget than just the appliances or fixtures themselves. It's been our experience that when buyers want specific appliance and plumbing fixture brands, they won't compromise otherwise. We can reduce the size of the home or make other cutbacks to save money, but they often will not consider other brands.
Did all that make sense? These are our observations after working with dozens of owners. Establishing a conceptual or preliminary budget can be more involved that just adding up costs. A good estimator can help establish a realistic budget, and then a good designer can design within the budget.

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Bidding Strategies:
Best Price, Best Quality, Best Service: pick one or two but you can’t have all three. That’s what we are often told, however I challenge the notion and have some thoughts and ideas to share.

Back in the day nearly 20 years ago, we took pride in the high-caliber of our trade contractors. We were faithful to a select group and took good care of them. Generally they did the same for us, but I now think this is a rather "old school" approach. There were some fallacies to the approach that exposed us to certain surprises.

  • Did our vendors give us their best price or did we actually pay more for the loyalty we endowed upon them?
  • Did we compel them to consistently look for new ways of improving their businesses or were we paying for inefficiencies within their organizations?
  • Did we allow our vendors to make their own decisions about the products and installation techniques used in our homes or did we specify clearly.
  • Did we rely on our vendors to provide a high level of quality because we knew what to expect or did we instruct them in the manner we wanted things done?

Loyal relationships are good for every business, but an understanding of human nature likely gives us the answers to all the questions above. If I were to ask these questions to my own organization back in the day, we would all have to admit that we probably weren't operating as efficiently as we could and were leaving money on the table.

In keeping with the strategy to obtain the best price and service, I have a few beliefs that support the effort:

  1. Solicit bids only from vendors I'm prepared to use.
  2. Use accurate construction drawings that anticipate needs of the vendors.
  3. Provide detailed specifications for the quality and extent of the work.
  4. Create scopes of work for each trade to follow per our company policies.
  5. Never shop bids. Always use the low competent bidder.

Consistent policies that respect the efforts of all bidders and support the needs of the selected vendors, establish a sustainable process for obtaining the best price, quality and service. By creating an environment for success, vendors will recognize your organization as the preferred company with whom they want to do business.