Contents:

A Practical Application for Square-Foot Costs

Using Job Descriptions to Train and Motivate

A Practical Application for Square-Foot Costs

By far the most common question asked on JLC's online estimating forum is how much to charge per square foot for typical construction — painting, trim, framing, and so forth. Estimating cost books are full of these numbers. The trouble is, they're someone else's numbers, based on someone else's costs. They might happen to be close to your costs, but if not, they're of less use.

Square-foot estimating might make sense for production builders who have accumulated loads of cost data from past projects, and who can change their designs to fit their target costs. But in remodeling or custom home building, it's nearly impossible to use square-foot costs, because each job is different and there are so many opportunities for clients to get involved in the design. It's okay to use square-foot costs for allowances, but I would never use them for a hard bid.

Create Your Own Cost Sheet

While I don't believe in square-foot estimating, I've found that a square-foot cost sheet can be an excellent tool for prequalifying clients. The cost sheet contains simplified cost data from a variety of recent jobs. It allows you to present cost options to clients based on your experience with projects similar to the one they're envisioning.

The table below shows cost data for five kitchen remodeling projects, broken down by job phase. The square-foot costs vary from $162.23 to $330.51. That's a big difference and illustrates the variability of square-foot costs.

The descriptions of the five projects show why square-foot costs vary so much. Projects with higher framing costs per square foot usually had other extensive work being done in that phase. The projects with luxurious finishes had higher costs in those categories, while some projects required more extensive plumbing, hvac, and electrical work.

In some cases, higher costs in a phase result from the size of the job. For example, the only electrical work we did in the Quimby kitchen was to add GFCIs, but the square-foot cost for electrical was almost as high as it was at the McGee job, which involved major electrical work. The difference is that Quimby was a small job, and McGee was big.

Certain costs remain the same no matter how big the project is. For example, the plumber might charge $800 to move the sink in either kitchen, but the square-foot cost would be substantially lower in the McGee kitchen ($2.50) than in the smaller Quimby kitchen ($10). The same principle would apply if all the projects used the same $2,000 appliance package.

Economies of scale can also lower square-foot cost. For example, if the kitchens had the same ceramic floor tile, the tile setter would probably charge a higher rate for the smaller projects. It might take only three hours to set 80 square feet of tile, but he'd have to fill in with another project while he waited for the thinset to cure. He could give you a better price on the larger job because he could spend a whole day on it.

On the other hand, the conventional wisdom that big jobs cost less per square foot than small ones doesn't always hold. The McGee kitchen, which was a large project, still ended up costing more per foot than the smaller ones. In this case, it was because of expensive finishes and extensive structural and mechanical work.

Using the Cost Data Sheet

Picture your first meeting with clients who want to remodel their kitchen. You show them pictures of your work, they describe what they want, and then they ask what it's going to cost. Based on what they've said, you tell them it will cost between $24,000 and $30,000. They're likely to respond that that's more than they want to spend and that $6,000 sounds like a pretty big range. This is when many contractors start throwing out numbers from memory to justify their seat-of-the-pants estimate. In most cases, that serves only to confuse the customer and may prevent you from getting the job.

It's much better to go into that meeting with accurate cost data from past jobs. When the clients ask why the kitchen will cost so much or why there's such a big range in price, you can show them a cost data sheet for projects similar to theirs. You can illustrate why one kitchen is $40 per square foot more than another. Maybe one had tile floors and granite counters, while the other had vinyl floors and laminate counters. Or maybe one project involved structural and mechanical work, and the other made no changes to the shell. Going over these variables with the clients on an item-by-item basis instills trust and makes it easier to come up with a plan that fits their budget.

Bob Kovacs

moderates the estimating forum at jlconline.com, and is president of Constructive Solutions, in Iselin, N.J., offering estimating and preconstruction services to contractors and architects.

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Using Job Descriptions to Train and Motivate

by Tim Faller A good personnel management strategy makes it possible to pay people fairly when you hire them, as well as motivate them for growth. If employees see the potential to make more money based on their own efforts and not someone else's whims, they'll work harder and better, and your company will benefit.

You can't expect field and office staff to improve on their own: You need to provide help, training, and support in establishing and meeting goals.

One of the best tools you have is the job description, which explains the goal of the job, your expectation as owner, and the plan for achieving the goal. You should have a job description for every type of employee in your company. Having an employee without a job description is like running a remodeling project without good plans and specs: It always leads to confusion and conflict.

Writing a Job Description

A good job description must be clear and complete. It should include all tasks and activities that the position requires and clearly describe the desired behavior. Accomplishment of required tasks must be within the employee's power, and the employee's performance must be measurable.

For example, suppose a lead carpenter job description says that the employee must "ensure customer satisfaction." That's neither clear nor doable. It doesn't explain what customer satisfaction is or how to know when it's been achieved, and its achievement is not always within an employee's power.

Instead, under "Customer Satisfaction," the job description should list the specific tasks involved, such as:

• Communicate daily with clients about schedule, cleanliness, changes, and any other job-related concerns.

• Keep the job clean. Broom-clean on a daily basis; vacuum-clean at the end of each week or daily if in a living space.

• Provide answers to clients' questions within 24 hours or advise them of any delay in responding.

• Write and present change orders to clients within 48 hours or inform them of any delay.

• Conduct weekly site meeting with client, production manager, and salesperson to review job progress.

• Receive a 9 or better on postproduction customer survey.

Each of these statements clearly expresses a desired behavior, and each addresses the goal of customer satisfaction in a specific way. Each task can be managed by the lead carpenter and performance measured by management.

Setting Monetary Goals

The job description becomes an effective tool at review time. In most cases, there are areas where an employee is performing well and areas that need improvement. You and the employee can agree on which areas need work and develop a plan for that work.

It's important for the supervisor to come to the review with specific information about the employee's performance. For example, to monitor the responsibilities listed above, the manager could visit the site regularly, take pictures, and interview the clients. Objective information brings fairness to the process and helps to avoid evaluations that are hasty or clouded by personal likes and dislikes.

It also provides a basis for fair wages. Every job type in the company should have a wage range. When new employees enter the company, evaluate them and start them at the right place on the scale. Then, end every job review with a list of growth goals and a prescribed raise for achieving those goals.

Let's say the pay range for a lead carpenter is $15 to $25 an hour, that there are 50 items on the carpenter's job description, and that a carpenter has to perform well on 25 of them to be classed as a lead. That leaves 25 items for growth. If you start a new lead carpenter at the low end, of $15 per hour, you can increase his pay $1.20 per hour for every three new items that he masters. That gives individuals responsibility for their own growth and ability to earn more. It also takes the guesswork out of giving raises.

Some newly hired lead carpenters may perform well on more tasks from the beginning. You should pay a wage commensurate with their knowledge and ability to work profitably, regardless of how long they've been with the company. This puts all employees on level ground and ensures that you're giving the proper pay to the right people.

In the long term, good people management means that you consciously work with each employee to grow into his or her job description at its fullest. As you see areas that need work, don't waste time complaining about lack of performance. Instead, work with the employee to develop a growth plan. Tim Faller, president of Field Training Services, in Westerly, R.I. (www.leadcarpenter.com), is a former home builder and author of The Lead Carpenter Handbook . He moderates the lead carpentry forum at jlconline.com.