Saturday, March 31, 2012
New Complex at USC School of Cinematic Arts
BofA to offer rentals as foreclosure alternative
Bank of America says it has begun a pilot program offering some of its mortgage customers who are facing foreclosure a chance to stay in their homes by becoming renters instead of owners.
Pulte to Cut Executives
Home Forecast Calls for Pain
'Deconstructed' Duplex to Show Off Energy-Efficient Building Techniques
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The Energy Star-rated project features a finished and unfinished unit.
Markup and Profit Blog | We like to see the Good Guys Win!
I want to discuss transparency. Transparency, as I?ll define it based on what I?m hearing, is opening your books to your potential clients and showing them all the numbers pertaining to a job you are quoting. Those who believe in being transparent are showing clients what each item on their want or wish list will cost, and then they total it all up and show the potential client their overhead and profit numbers.
Transparency is more than itemized estimates. Generally speaking, when you itemize estimates you provide the price for each portion of a job, and your price includes your markup. There are all kinds of variations on itemized estimates. You can show prices marked-up to cover overhead only, and tag profit at the end as a lump sum. You can show costs on items that can be purchased at Home Depot, and increase your overhead and profit on everything else.
Itemized estimates are created by determining the total sales price you need to cover the estimated job costs and your overhead and profit, then breaking it down in whatever format best protects your business. You have to do this carefully, because the last thing you want is to have the potential client delete those items where you placed your overhead and profit, and keep those items where you quoted cost only. Itemization is really just playing games with the numbers to make a sale. And it?s a game that your potential client stands a better chance of winning than you do.
Transparency is the next step beyond itemization. No games ? everything is disclosed.
This was recently discussed on daily5Remodel.com. The conversation started with the premise that homeowners can find all pricing information online anyway. Since they can find it anyway, aren?t we better off disclosing all?
This comment was made:
?I changed my business model because of this (the fact that our clients have access to pricing information). I also changed because it?s very hard to justify a huge markup to a client who doesn?t understand the cost of doing business. I also never felt right/fair about adding 50-75% to a change order because the customer wanted to upgrade their edge detail, for example. In response to the information age I decided to be ?open book?: The client knows my costs and I charge a project management fee on the original proposal. Some change orders have a management fee and some don?t depending on how much of my resources it took to make the change. If it was that edge detail change, for example, then no markup. The days of hiding costs and protecting information are coming to an end so the sooner we acknowledge that and accommodate it, the more professional (and honest) we will be perceived. IMHO.?
I?d like to address this one piece at a time.
?I changed my business model because of this (the fact that our clients have access to pricing information).?
Well, they can?t find everything online about our business. They can find enough pricing information to make themselves dangerous, but they don?t have a clue what it costs you to tear out their kitchen cabinets or repair the dry rot in their bathroom. They just think they do.
I?ll grant that some of job cost information is available in the form of prices for windows, doors, insulation, cabinets, etc. And, if the potential client is familiar with basic construction, they can tap into various forums and perhaps articles and posts here and there and garner what they may believe is a ?fair? way for contractors to price their jobs.
Beyond that, almost all of their judgment or perception about how we price our work is guesswork at best. You tell me, could you get close to the price for your last job by looking on the Internet?
I?ve taught estimating in 44 different states to well over 16,000 contractors over the last 30+ years. In all that time and with all those people, I?ve learned that everyone has their own spin on how to put a project estimate together and as a result, you will almost never get two estimators to come up with the same job costs for a given job. So someone please explain to me, how is a person who is not trained or educated in construction practices going to come up with numbers that are even vaguely close to actual job costs? The truth is they can?t and won?t.
And, as I?ve discussed many times before, you need to base your company?s markup on your overhead and profit needs, which isn?t the same as anyone else?s overhead and profit needs. So how can a potential client know what your markup should be? They can?t.
In fact, based on the failure rate in the construction industry, most contractors don?t know what their markup should be. And many who know what their markup is, don?t use it because they are afraid they won?t make the sale. Because . . .
?. . . it?s very hard to justify a huge markup to a client who doesn?t understand the cost of doing business.?
If, after carefully reviewing your overhead expenses and adding on a reasonable (8%) profit, you calculate a markup of 1.5, 1.6, 1.7, is it huge? No ? not if it?s what you legitimately need to charge. You need to calculate a markup that covers your overhead expenses and makes a reasonable profit. If it does that, it?s not unreasonable, and it?s not huge. It?s what you need.
You only have to justify your markup if you tell them what your markup is. Your financial information and your markup are proprietary company information, it?s no one else?s business. It?s especially dangerous in the hands of clients ?who don?t understand the cost of doing business.? Let me tell you something: not only do they not understand the cost of doing business, but many of them don?t care. They just want the lowest price and they don?t care what it costs you. Those are clients you don?t want.
?The days of hiding costs and protecting information are coming to an end so the sooner we acknowledge that and accommodate it, the more professional (and honest) we will be perceived.?
The statement that giving out proprietary information makes you appear more professional or honest is, to be polite, horse apples. Does your doctor provide his or her proprietary information before you go in for surgery? If they did, would it help convince you they are a better surgeon? How about your attorney? Do you believe he?ll do a better job of protecting you in the courtroom if you know how much of his rate per hour he takes home and how much he uses to pay for office staff and rent? Why does telling a client all your costs make you a better contractor? I?ll argue that it makes you LESS professional. It shows you?re uncertain of your ability and skills, and that?s why you?re focusing on price.
Price is not the number one priority for most clients. Too many contractors MAKE price the number one priority. They?re hurting themselves, and they?re hurting the industry. Giving potential clients a pile of numbers that they can?t and don?t understand doesn?t inspire confidence. Being apologetic about your price or your method of pricing doesn?t inspire confidence. Clients want to know that you will do the job they want done, in a timely manner at a fair price. They are hiring you to work on their largest financial asset, and need to know you?ll do it right.
The absolutely best comment in this discussion came from someone else:
?Clients don?t want transparency; they want peace of mind. They don?t really want to see behind the curtain, they just want to be certain that we know what we are doing.?
Exactly. Learn how to sell your work, learn how to present yourself, learn how to demonstrate that you will do the job they want done, in a timely manner, at a fair price. Give them peace of mind.
Area joblessness declines
Home sales jumped 27 percent last month in the Fort Wayne area, figures released Friday show.In February, 372 homes were sold, up 27 percent from 293 in February 2011, based on data from the Upstate Alliance of Realtors.
Haiti's Iron Market
Friday, March 30, 2012
As Lenders Hold Homes in Foreclosure, Sales Are Hurt
Toronto real estate: First foray into bidding wars leaves homebuyer bruised
Vanessa Gallant just stepped onto the bidding war battlefield a month ago - in the relatively quiet community of Vaughan - and already she's feeling bloodied.
New Complex at USC School of Cinematic Arts
Builders slog ahead on a long road to recovery
Poll for Construction Estimators
Our friends over at�Software Advice are conducting a poll about current practices in construction estimation.
You can take the 5-minute poll here.
Tags: Architects, construction, construction estimating, construction manager, construction software
New car showroom on 7?
April Newsletter
Somerville Home Sales Doubled in First Two Months of 2012
In Somerville, 51 condos and single-family homes sold through the month of February, according to figures from the The Warren Group , publisher of Banker & Tradesman .
Thursday, March 29, 2012
Zacks Investment Research Analysts Reaffirm a "Neutral" Rating on URS
URS 's stock had its "neutral" rating reaffirmed by Zacks Investment Research in a report issued on Thursday.
Consumers Seem Confident Economy Will Grow
Even as consumers remained upbeat their worries about inflation rose this month to the highest level in a year as gas prices increased, the Conference Board said.
The Lock, Stock, and Barrel Listing
Room to roam a " and think
" Room to roam - and think; In the modern workplace, mobility, chance encounters and lots of daylight are critical, and hierarchy is downplayed" At Russell Investments in Seattle, the CEO's work area is designated only by an "Office of CEO" sign.
Roadshow: State program comes to aid of older drivers
Cities with the most new construction
Construction activity in nearly every market across the country took a nose dive with the economic downturn. It has remained moribund since, thanks to vacant inventory, a weak jobs market, and stingy banks.
Parsons Brinckerhoff Supporting Phoenix LRT Expansion
Valley Metro has awarded a contract to a joint venture of Parsons Brinckerhoff and PGH Wong Engineering to provide program management/construction management services to support the planned expansion of the metro Phoenix high-capacity transit system.
Builder Confidence Holds Up on Hope for the Future
Wednesday, March 28, 2012
PMI Seminar
Former Sinatra home back on market
Alicia Keys is moving on from her gorgeous Manhattan apartment, Frank Sinatra's former home is for sale, and the former rental home of Tom Cruise and Katie Holmes as well as Russell Crowe is available for lease.
Senate Defeats Amendments to Renew Home Energy Tax Credits
Shizugawa Banya
10 U.S. cities making a comeback
Several old-line cities were rewarded in the last decade when they avoided the real estate bubble and subsequent bust and found themselves with broad-based, strong economies during the recession.
Higher minority-hiring goal riles Minn. construction industry
The Dayton administration's goal of tripling minority work on some state construction projects is being decried by contractors who say they can hardly meet the current goals, never mind the new one.
Michael Jackson's death home listed again
Michael Jackson is dead and buried ? but the home he died in is still very much available.
Tuesday, March 27, 2012
Contractor Offers Explanation for Building Collapse in West Harlem
Lennar posts sharp rise in Q1 orders
A Lennar model home is open for customers in a new neighborhood in the Denver suburb of Thornton, Colorado March 29, 2011.
McCarthy: Cornell University
Stewart?s Late Move Earns Win at Las Vegas
Prestige Home ref iv338 - ID: 5044162
Villa close to the beach and downtown. Arranged on three floors for a total of 200 sqm plus garage for 6 cars, the house enjoys excellent exposure and is therefore very bright thanks to large windows which have.At ground floor: study, two bedrooms and two bathrooms.
REOs: Where Are They Now
Fullerton student housing complex receives LEED Platinum
Monday, March 26, 2012
High upside Mock draft
There are only a few places where starters can now be picked up in the draft. We're mostly now looking at WR4, OLB3, FS2, and RG1 and 2 and Center 2 Below is a mock that answers those positions with no trades.
Burns & McDonnell wins $1.7M NAS Jacksonville contract
Burns & McDonnell Engineering Co. of Chesapeake, Va., has won a $1.7 million task order to supply architect and engineering services for the Broad Area Maritime Surveillance Mission Control Complex at Naval Air Station Jacksonville The task order is the first under a $30 million contract to supply architect and engineering services for the Naval ... (more)
Pending home sales in February keep real-estate outlook promising
The real estate year in Huntsville and Madison County continued its promising start with strong pending home sales leading to increased sales in February.
URS Corp. Reiterated at Neutral - Analyst Blog
URS Corporation provides engineering, construction and technical services. It is also a major U.S. federal government contractor in the areas of systems engineering and technical assistance, as well as operations and maintenance.
Two more pledges for Notre Dame football
Notre Dame's junior day has been very fruitful.A The Irish received verbals from offensive linemen Hunter Bivins and Colin McGovern Saturday and now have added two more pledges on Sunday.A Offensive lineman Mike McGlinchey and quarterback Malik Zaire became commitments six and seven for the Fighting Irish after making their commitments official.A ... (more)
Immigration and the 2012 Campaign
Sunday, March 25, 2012
Electricians concerned about non-trade certified work
The Electrical Contractors Association of B.C. are expressing concern about non-trade certified electricians being permitted to perform maintenance and repair work on specific electrical systems.
Warren Watch: Hedge fund bet
Warren Buffett's charity bet with hedge fund managers was the subject of two seemingly conflicting stories last week, one saying Buffett is ahead and the other saying he's behind.
BofA to offer rentals as foreclosure alternative
Bank of America says it has begun a pilot program offering some of its mortgage customers who are facing foreclosure a chance to stay in their homes by becoming renters instead of owners.
Hunt/Moss: Florida Marlins Stadium
KB Home posts smaller 1Q loss as revenue rises
This Dec. 18, 2011 file photo shows the framework of a new structure in a KB Home community, in Balch Springs, Texas.
6 feared killed, 18 injured as under-construction bridge collapses
Saturday, March 24, 2012
Robins & Morton: Carolinas Medical Center
News From the Front Line: Business Is Improving
New Market Report: AECOM Technology Corporation (ACM) - Clean...
It engages in providing planning, consulting, architectural and engineering design, and program and construction management services.
Home where Black Panther Party founded flipped
The Black Panther party preached "power to the people," but in the San Francisco Bay area's thriving real estate market, the power is in the property.
Big & empty: Dick's Sporting Goods eyes location, will other vacant...
Shizugawa Banya
Parsons Brinckerhoff: Presidio Parkway
Friday, March 23, 2012
As Lenders Hold Homes in Foreclosure, Sales Are Hurt
Sussex Businesses Fear Another Summer of Route 54 Construction
Metro Denver Real Estate Market Update - March 2012
Well, the word on the street continues to be "Inventory, Inventory, Inventory!" Very few times in history have we seen our inventory drop to these kinds of levels without a major shift occurring in our marketplace!A The Pendulum is now starting to swing back in the favor of sellers.
Homebuilders sink on big KB Home loss
Shares of residential construction companies were under pressure Friday after KB Home reported a sharp drop in new orders, raising worries about the all-important spring selling season.
Ashley Tisdale's cheeky bikini Twitter picture: Yay or nay?
Where it's hardest for us to make the rent
Stewart?s Late Move Earns Win at Las Vegas
Screw You, Gates Foundation: The Case for Undemocratic Workspaces
According to the New York Times , Seattle is on the vanguard of a movement to make work environments more like libraries, where you're more apt to find a powerful executive tapping away on her laptop in a common area than behind a heavy wooden door, with a killer water view unshared by her charges.
Thursday, March 22, 2012
Michael Bishara Joins Synacor as Vice President and General Manager of TV Everywhere
Synacor, Inc. , provider of the leading technology platform enabling cable, satellite, telecom and consumer electronics companies to authenticate their consumers and deliver digital entertainment, TV Everywhere, and online services, today announced it has hired Michael Bishara as vice president & general manager of TV Everywhere.
Boosting Profitability for General Contractors
As profit margins drop past the 2% mark, general contractors are compelled to look for more innovative ways to drive profitability. Recently, I learned of a GC that hired a third party services firm to photo-document its work on a large school project and passed the cost onto the owner with a slight markup. While I see the rationale behind adding value-added services as a way to improve revenue, I find this particular choice questionable.
Construction Photo-documentation firms offer a valuable combination of construction knowledge and photography services to owner/developers who lack the experience and resources to scrutinize the construction of their buildings. Most also offer a deliverable that includes construction photos delivered via the web.
However, does this make sense for a GC? Can these firms offer expertise that the GC doesn?t already have on staff? Do they hold the secrets to construction photography that a GC can?t match with a $500 camera purchase�and a basic photography course at a local community college (or even online)? The answers are obviously no and no.
So, therefore, the missing piece of the puzzle must be the ability to deliver construction photos with a web interface offers more than a link to a Sharepoint folder. If a GC could deliver a comprehensive package of photos to an owner that offered a complete record of as-built construction and critical installation details, now that would be valuable.
And now, the GC can offer just such a deliverable. In my next post I will describe how Geedra enables GC?s to self perform the photo documentation of their projects, and in doing so transforms an overhead cost, into a value-add service that boosts profitability.
Tags: construction, construction photo documentation, construction photography, construction photos, Gafcon, Geedra, general contractors, MultiVista, qualitybuilt, self perform
McCarthy: Cornell University
Stronger Lure for Prospective Home Buyers
Company involved in I-35W bridge up for new deal
A California company criticized for its consulting work on the old Interstate 35W bridge before it collapsed is one of two finalists in a $100 million contract to build a proposed light-rail line from Minneapolis to Eden Prairie.
Elite guy on the interior
Not that it should be that surprising - it is, after all, their draft- but the readers completely dominated Day 10 of the jaguars.com 2012 reader mock draft, not only eventually swaying the pick, but coming up with valid reasons for that pick and a few alternatives.
Canadian dollar slightly higher as commodity prices, trader sentiment improve
Canadian dollars, or loonies are shown with U.S dollars on April 6, 2010 in Montreal.