We take about 4% of the project budget as ahead of construction to cover us during the development of the project. It is not refunded. This is collected when customers sign a unilateral preconstruction document. If they continue with us through project development and construction, that money will be spent on the total cost of labour. If they get out of the development of the project and they do not succeed in construction, it will cover our costs. During the sales conversations, I decomposed the customers to hire us to just do design. I do not want to be treated like an architectural firm. My profit center is the construction phase. I have a second company in which I am a partner of an architect.
If an owner wants the design, I`ll send them back to this case. We give them a design price based on a list of what they want. I did it to get away from the free estimates. When customers call a contractor for an estimate, they also ask for a free design. These design fees are getting rid of window buyers. When clients collaborate with my design company, they get to know me during the design process, and 9 times out of 10, design films directly into a construction contract. For the owners, I give interested people a first estimate for this project. Although they have a winning number, I specify that it contains permissions and other pre-production work. Then, if customers want to continue working with us, they have to sign with a contract.
We have a pre-construction service contract which is a short and one-sided contract. This contract covers any time we put in a project to write the contract: design, research, pricing, specifications, design meetings with the architect and meeting with the owner. My company calculates a certain amount per hour for this work. If potential clients want to get an idea of the cost of the project, we give an oral estimate. If we get the contract for this work, we will also have a guarantee for the whole project. For example, we receive a down payment of $30,000 if we sign the pre-construction contract. We use $10,000 for pre-construction work. We`ll sign a construction contract for z.B $250,000. We apply the remaining $20,000 deposit on the cost of the $250,000 project. Dan Cohen Creative Spaces Oakland, Calif. Big50 1991 Alan Derrick Design Huntsville, Ala.
Big50 2001 Chet Diromualdo Chet DiRomualdo Quality-Custom Carpentry Allentown, Pa. Big50 1999 We do our best to get money for our services provided, but it is based on the customer`s reading and atmosphere and what the market will carry.