Don't you get just a little excited when you are scrolling through all those junk emails, when out of nowhere the subject line appears: "New Project". Wow, instant backlog, lets start counting all those little chickens (before they hatch of course). Why are they sending this to me, and what should I do with it? Is this a potential client I have never worked for in the past, or is it an old familiar friend with another sure profit maker? The answer to that question is an important one in how you respond.
We have all seen how different project aquisition is now, compared to say 3-4 years ago. Now, when I hear from an unknown client, it is most often just a price shopper, bottom fishing for the cheapest design work in the entire continental US. Now, the low end is that part of the market that I have never aspired to, for so many reasons. The first reason for me is that engineering is not my "hobby", it's how I pay the bills. If I can't make money at this, I might as well be fishing, at least that pays in food (sometimes). Now, if you have people working for you, they also aren't there for hobby time, they need to be paid, and quite often. Not to mention the benefits, health insurance, and it goes on and on from there.
Another reason not to be Mr. Cheep is that the label, once it's applied, is hard to shake. Once this economy turns around, you do not want to be stuck with the clients who only know LOW. But the best reason not to cut pricing too much, is that your designs can get compromised. The incentive is gone to try various alternatives, to spend more time in design to save construction costs and building energy use. You only have one way to get this job done, and it has to be the quickest, or you are bleeding cash in a large manner.
But how can you do it, how to keep pricing up, when there is so much pressure to cut, cut, cut? I find that educating the client may work, if you can show them added value for what you bring to the table. Some clients will appreciate those alternative design solutions, that heating alternative, or the study of ground source heat pumps for cooling. These are the clients you want. The ones who appreciate great design, and who recognize the value it adds to the project. These also tend to be the clients who pay quicker, don't mind retainers, and will give you a nice referral. And if they are not taxed to death, they might just hire you and me for the next mixed-use Towne Centre.
Monday, November 15, 2010
Sunday, November 14, 2010
Starting The Blog
Good Day,
This blog is all about the business of design, something I have been intimately involved with for most of my 30 years since the Univ. of MO. I wish to run the gamut of topics related to marketing design services, to meeting with potential clients, to turning those potentials into real projects, and then... actually getting paid.
Let me start off today talking about my good friend, we shall call him "Bill". Well Bill and I worked together on a nice high rise project in Myrtle Beach, I as the MEP engineer and Bill as the contractor's QC person. This project went very smoothly, except for the fact it was right at the end of the Condo Boom, starting into the Condo Crash. The units just would not sell, and that was just a symptom of what was to come, for before long my friend was out of a job. For new construction projects of any kind were now going the way of the dinosaur.
My friend, not being the kind of guy to sit on his hands, got some encouragement to start up his own business, doing maintenance inspections on large buildings, mostly high rise condos or hotels on the beach. Now this had been work he was doing for his contractor employer, mostly as a hedge against future lawsuits. If you can keep a building maintained, it is much easier to keep those million lawyers (all looking for work) at bay. I did my best to keep Bill encouraged, and filled him with my advice on how to get this idea from concept to reality. He, being a "quality" kind of guy, wanted to make sure he had all those ducks in a row before jumping in with both feet. He met with insurance people, lawyers, accountants, drawing up sample contracts with all the right language, absolving him of liability for the unseen aspects of his work. He was a patient man, waiting for one professional after another to bless his plans, before he went to the next step. I would call him every 2 or 3 weeks to see how the process was coming along, and try to encourage him. He would ask me questions about how to write up his proposals, who to use for accounting, how to set pricing. I was very glad to help a budding entrepreneur, as I remembered all those who helped me get my start.
Bill, being an employee of someone else for his whole career, had a little trouble getting into the mindset of being his own boss. He went over some pricing with me on his proposed inspection work, and seemed overly concerned with how his rates would be perceived. I reminded him of the reasons building owners would be hiring him, and that was to avoid future maintenance related problems. Price was not going to make or break this decision, it would be decided on the value perceived. If Bill could save a building from saltwater intrusion, how much was that worth? Way more than whatever he was worried about charging or not charging. My point to him was, make your best argument, show photos of what happens to buildings that are not maintained with re caulking against the salt spray. Let that be your focus, not trying to beat out some fly by the seat of the pants competitor by charging less. A low price can cause the perception that your services are not really that valuable. This is not the position you want to occupy in the market place.
I hope to cover more topics like this soon, and want to update you all on "Bills" progress as a new business as time goes on, have a great day.
Brian
This blog is all about the business of design, something I have been intimately involved with for most of my 30 years since the Univ. of MO. I wish to run the gamut of topics related to marketing design services, to meeting with potential clients, to turning those potentials into real projects, and then... actually getting paid.
Let me start off today talking about my good friend, we shall call him "Bill". Well Bill and I worked together on a nice high rise project in Myrtle Beach, I as the MEP engineer and Bill as the contractor's QC person. This project went very smoothly, except for the fact it was right at the end of the Condo Boom, starting into the Condo Crash. The units just would not sell, and that was just a symptom of what was to come, for before long my friend was out of a job. For new construction projects of any kind were now going the way of the dinosaur.
My friend, not being the kind of guy to sit on his hands, got some encouragement to start up his own business, doing maintenance inspections on large buildings, mostly high rise condos or hotels on the beach. Now this had been work he was doing for his contractor employer, mostly as a hedge against future lawsuits. If you can keep a building maintained, it is much easier to keep those million lawyers (all looking for work) at bay. I did my best to keep Bill encouraged, and filled him with my advice on how to get this idea from concept to reality. He, being a "quality" kind of guy, wanted to make sure he had all those ducks in a row before jumping in with both feet. He met with insurance people, lawyers, accountants, drawing up sample contracts with all the right language, absolving him of liability for the unseen aspects of his work. He was a patient man, waiting for one professional after another to bless his plans, before he went to the next step. I would call him every 2 or 3 weeks to see how the process was coming along, and try to encourage him. He would ask me questions about how to write up his proposals, who to use for accounting, how to set pricing. I was very glad to help a budding entrepreneur, as I remembered all those who helped me get my start.
Bill, being an employee of someone else for his whole career, had a little trouble getting into the mindset of being his own boss. He went over some pricing with me on his proposed inspection work, and seemed overly concerned with how his rates would be perceived. I reminded him of the reasons building owners would be hiring him, and that was to avoid future maintenance related problems. Price was not going to make or break this decision, it would be decided on the value perceived. If Bill could save a building from saltwater intrusion, how much was that worth? Way more than whatever he was worried about charging or not charging. My point to him was, make your best argument, show photos of what happens to buildings that are not maintained with re caulking against the salt spray. Let that be your focus, not trying to beat out some fly by the seat of the pants competitor by charging less. A low price can cause the perception that your services are not really that valuable. This is not the position you want to occupy in the market place.
I hope to cover more topics like this soon, and want to update you all on "Bills" progress as a new business as time goes on, have a great day.
Brian
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