Who Makes Up The Project Team?
Many in our industry have come to believe that design/build is the best way to qualify, design and build a project. The design/build process, when performed well, provides countless benefits for all three parties involved: the owner, the builder and the designer. All three parties work together as a team, sharing their knowledge, skills and experience to create a mutually beneficial solution. This solution is not possible if any of the three parties don't involve themselves or prefer to work separately. If this process works so well for a building or remodeling project, why not consider the process for building or remodeling your Design/Build Company? Let's look at the parallel considerations.
The Business Owner's Purpose Must Be Clarified
First of all, as with any construction project, there is or will be an owner. The owner may be someone who needs to build or remodel his or her business to cause a specific result or effect. An example might be the need to create more family time or recreational time for the business owner and or management employees as a way to reduce stress. Or perhaps the desire is to create a business with an exit strategy that ultimately serves the business, the current owner and even the future owner. As is true with any construction project, the owner can have one or many reasons for building or remodeling a business. But, just like a design/build project, before we decide to accept the project we should ensure that the owner is qualified. Are the owner's expectations realistic? Does the owner have an adequate budget for the project, and if not, can he or she obtain financing? Can the owner make confident decisions and will he or she stick to them? Once the project begins, what will it be like to work with the owner? Are you beginning to see the parallels?
The Designer Must Be Adequately Qualified For The Project
Second, there must be a designer. This could be the owner of the business, a business coach or a business consultant. Regardless of who does the design work for this new or remodeled business, that person must be qualified for the task at hand. If you, as the business owner, do not have the required skills, insight or experience, make sure that the person you choose to help design this project does. Don't hire a software company designer to design a construction company. And, above all, don't choose a business designer who crashed his or her own business. If, as an owner, you choose to take on the design work yourself, I suggest you design as if you must sell your creation to stock holders. This may automatically help build accountability into your plan. In fact, some people involved may already think like stock holders, such as your spouse, family and/or employees. Think about your own abilities as a designer. Even if you are a talented designer, are you really the best designer for the project and or the owner? Only you can decide because you're the owner!
Make Sure You Have The Right Team Members For The Build
The third leg of this three legged stool is the business construction team, comprised of those who will build or remodel this new business. As is the case in the design/build project delivery system, I suggest involving the construction team during the design of this project, rather than be expected to just follow the plan of perhaps an anonymous or ego- driven designer. Take advantage of what your employees may already know to improve or build the business. Just like a design/build project, involving the construction team during the design of a business can reap many benefits. Some of these benefits may include the option that construction can often start before the design is completed; your team will already know what resources you have to build the project and which ones are still needed; and any design changes during construction are easier to identify and solve. In addition, there will likely be fewer communication breakdowns because everyone that participates in creating the design knows why the project is being built. One more benefit for the owner and the construction team typically not found in a design/build construction project: Your construction team has already lived in and experienced the project you are about to remodel or build upon!
Just as we advise prospective and current clients to choose the right team to complete their project, the design/builder should choose the right team for design/building his or her business. As with a design/build project, once we have identified and committed to who will be on the team, the next step is to establish the design and construction process. To do this, we need a plan of action to follow.
Creating the Plan and Specifications
In part one of this article we looked at who might comprise the team if a design/builder wanted to build or remodel an existing business, using a design/build project as the analogy. In this article, we will look at ways to leverage the team's talents and knowledge in ways that will help facilitate the design and construction of an award-winning and mutually beneficial design/build firm. Like any design/build project, a simple outline of activities must be identified and managed for successful completion of the design and the build. Consider the following list of activities as a place to start when creating your own list.
Explore Your Options, Then Decide How You Will Go Forward
First, explore your design options. Should you build up or out by advancing current employees or by bringing in new team members? You may need to do both. Should you take on more of the same project types you have done in the past or should you explore new niches? Will your existing business systems be adequate to grow and support the new business, or should you create new systems before you implement your plan? The options list can be endless, but like a good designer a good business consultant will help you concentrate on a combination of design options that can meet your business goals. I use the word "can" because the ultimate success of the design will likely be up to the business itself and not the designer.
Document Your Plan
Next, as you commit to options, develop a formal business plan to document your strategy in a sensible format. Similar to plans used by design/builders, the plan will not be put out to bid. This plan will be used by only one construction team and we already know what they know and can do. A simple strategy usually works well, provided your plan includes the critical information your team needs to build the project. Unless you are applying for financing or creating a new business, you may not need a lengthy and overly documented business plan. Also, as with project plans, have your employees review the business plan before you consider it to be complete. In this way they can provide input and /or specific details they feel will help improve and better manage the production phase of your plan.
Accurately Estimate The Cost Of Your Plan
Comparable to how those on a design/build team operate, estimate the project cost as the design evolves. This process prevents the over-design relative to your budget realities and/ or ability to capture the necessary resources. To accomplish this feat, find or develop a financial budgeting tool, such as a spreadsheet to explore "what-if" modifications to your plan. Allowing the owner to modify the design of a construction project without knowing the relative cost impact often kills the project. Designing a business plan in the same manner may net similar results.
Prepare Contract Documents
Once the owner commits to a design, its time to create contract documents. In this case, contract documents could be a contract with yourself, something to bind you to your commitments. Assuming they helped with the design, sharing this contract with your employees may help them see your commitment to their success. You may also want to create "subcontractor agreements" with others who will be involved in the construction of this business, such as the employees and any consultants. Be sure to add general conditions and contingencies into your agreements. The realities of life and/ or business may require that you edit or dramatically change your overall strategy. Don't be stuck with a contract that requires you to fulfill the completion of a project that is no longer right for your company.
Create a Realistic Project Schedule
Next, create and confirm the schedule for construction, identifying the critical path required to achieve measurable milestones within your plan. Be realistic. The owner may get frustrated or loose confidence if the schedule is too aggressive or nearly impossible to achieve. Your critical path should identify which activities or milestones need to happen before moving to the next phase. Just as you cannot paint plaster until it has dried or cured, you cannot complete a future client's project estimate until you know the markup that this new company must add to direct project costs. Determining that future markup requires completing your business budget beforehand.
Be Sure To Job Cost As you Build
Finally, be sure to job cost as you go, measuring your plans and financial assumptions against the reality of construction as it happens. I was speaking with a contractor in California recently who shared that he had almost a year's worth of work already scheduled. Originally he thought this was a good thing. After speaking with his tax accountant, he realized that he had lost over $50,000.00 the previous year. Unfortunately, he had used the same pricing strategies to sell the work he was already under contract to complete.
A design/build project can take several months of planning and preparation before construction can begin. Think of the next year as a new project and start your business planning now!
Shawn McCadden founded, operated, and sold a successful design/build company. A co-founder of the Residential Design/Build Institute, he speaks at industry events and consults with remodelers about owner issues, management, lead paint regulations and other industry issues. ShawnMcCadden.com [email protected]
