“Thank Goodness I’m not my own General Contractor!”

“Thank Goodness I’m not my own General Contractor!”

Becoming an efficient and reputable general contractor takes years of hard, and often thankless, work. A General Contractor team invests years, even decades, learning the intricacies of each trade and mastering the art of project management and timely delivery. To be effective, a General Contractor needs to be proactive, engaged, and an aggressive problem-solver. They develop an extensive knowledge of building codes, OSHA safety standards, materials, fixtures, and spend thousands of hours of analyzing construction plans and specifications.

Over the past couple of month, our blogs have covered the variety of services and skills applied to different projects. The quality of these services, though ultimately determined by perseverance and commitment, is often based on a framework of challenges and lessons-learned. A successful General Contractor makes the client’s role painless, if not effortless, through meticulous coordination and adept management. While our previous posts captured the client’s viewpoint, we decided to delve into the contractor’s perspective to provide you with a full panoramic view. And, to be in tune with this week’s holiday spirit, we noted some reasons to be thankful that you don’t have to be your own general contractor.

Reasons to be thankful for a General Contractor

 

General Contractors craft quality subcontractor teams.

General contractors spend years developing a through and excellent rapport with local subcontractors.

Not only does a General Contractor have the network to develop these relationships, but they also provide a unique incentive: the promise of more work and future projects! This exclusive dynamic produces an incentive for subcontractors to offer better pricing and provide superior quality.

Imagine the time and effort required to put forth researching, calling, obtaining bids and checking references for over a dozen and a half different trades.

A proactive General Contractor already has the best tradesmen on speed dial and is ready to coordinate the best team for your project.

“Of all the things I’ve done, the most vital is coordinating the talents of those who work for us and pointing them toward a goal.” – Walt Disney

General Contractors design a comprehensive schedule.

Ask any subcontractor who’s participated in a disorganized project: There’s nothing worse than attempting to perform work while in a crowded space or on a crowded construction site.

Electricians trying to wire walls before the framers have left the room, ladders overlapping, tripping over the extension cords of five different trades all crammed in one spot. Nescient scheduling is not only unsafe, but it’s also counterproductive.

An experienced General Contractor understands the best order of operation and will save everyone the headaches, hazards and the cost inefficiency that are the inevitable result of a poorly-timed and mismanaged schedule. A poorly handled schedule means a poorly handled project. This is why DBG has a full-time in-house scheduler.

“Time is the scarcest resource; unless it is managed well, nothing else can be managed.” – Peter Drucker

General Contractors coordinate all of the communications.

Most people do not have the time or patience to deal with the endless stream of busy work involved in a construction project.

There is a reason that managing a project is a full-time job: it starts with securing permits and then quickly spirals into a typhoon of invoices, phone calls, emails, change orders, budgets, material orders, meetings, walk-throughs, inspections, punch lists, and writing checks (to name a few).

Good news, though! Your General Contractor takes care of it all.

An exemplary General Contractor also commits a part of their time to updating clients on a daily, weekly, or bi-weekly basis. Depending on the project size, a General Contractor is usually regulating hundreds of communication streams between suppliers, subcontractors, and architects to make sure your project is completed promptly, safely, and cost-effectively.

“Being a project manager is like being an artist, you have the different colored process streams combining into a work of art.” – Greg Cimmarrusti

General Contractors assume the majority of the risk.

Acting as your own general contractor means you assume all the risks associated with construction: financial risk, safety risk, and quality risk – all of which require constant scrutiny and evaluation during your project.

Even with the most meticulous General Contractor at the helm, no job goes perfectly smooth for the entire duration. Complications happen with every project; it’s simply the chaotic nature of orchestrating an immense volume of manpower and material all at once.

One of the many advantages of having a General Contractor is their experience with proactive contingency planning and aggressive problem-solving. When it comes to construction difficulties, they already have the experience, resources, and network to keep your project moving forward.

“Quality is never an accident; it is always the result of high intention, sincere effort, intelligent direction and skillful execution; it represents the wise choice of many alternatives.” – William A. Foster

With DBG Construction, you can rest assured that your project is in experienced and diligent hands. You’ll appreciate the peace of mind you gain from our consistent communication and quality performance. As with all of our clients, you’ll be grateful that you didn’t have to tackle your project on your own.

Communication: Setting Up Construction Projects for Success

Communication: Setting Up Construction Projects for Success

We understand why so many individuals seeking construction services place a premium on estimated cost, reputation, and time-frames for project delivery. What we don’t understand is why so many clients settle for a construction firm that doesn’t advocate and provide transparent communication.

Many construction teams win a competitive bid, receive a list of instructions, and then commence work with little-to-no forecast of future communication. Not only does this lack of communication increase the odds of mistakes, but it also generates a space of silence and unknowns that increases stress and tension between the contractor and the client. The client is left wondering just how well (or how poorly) things are going and whether the project is scheduled to be completed on time and on budget.

DBG firmly believes in establishing a clear framework of consistent, forthright communication. Routine communication with the client not only eases their concerns, but also improves the overall management and organization of the project.

When facilitated correctly, communication brings cohesion to all of the project’s different participants: the client, the architect, the contractor, and the subcontractors. Every single person knows what portions of the project are proceeding according to schedule, and what needs to be moved along more quickly.

Since transparent communication works both ways, it’s important that our client knows what we have completed and also what we are struggling to complete.

 

Importance of Regular, Direct Communication

Studies indicate that the most effective form of communication during construction is direct communication or, when dealing with routine matters or regular updates, written communication.

The reason direct communication plays such a critical role in a contractor’s performance is because it allows people with technical experience to generate a forum for questions and answers. It is not uncommon for this dialogue to evolve into a brainstorming session that provokes new ideas, new strategies and solutions.

So how does communication ensure a project is completed in a timely and cost-effective manner?

DBG relies on its proprietary weekly meeting packets which are distributed during routine meetings of a project’s key personnel. These regular meetings facilitate direct communication and generate an expectation of teamwork and transparency. DBG’s project packets supplement these meetings with written communication, providing detailed progress reports and up-to-date photographs of the construction site.

DBG especially relies on these documents during particularly challenging projects. For example, DBG was awarded a contract to complete two extensive restaurant renovations in just under 70 days.

Weekly meetings with the architect and the client were essential to monitoring progress, identifying lead items, and determining contingencies to make sure the deadline was met. To add additional pressure, opening dates are non-negotiable for restaurants: they either open on time, or they begin to lose money before the first customer even walks through the door.

DBG beat the deadline and our quality performance brought two new Chick-Fil-As to the University’s campus before the Fall semester had started.

As a general contractor that strives to set new benchmarks of service and project management, DBG is proud that our strong communication strategy results in happy clients and new businesses that enrich and contribute to our community.

Considering opening up a new location for your business? Contact us today to find out how DBG’s services can help you open up on time and in budget.

The Value of Construction Management

The Value of Construction Management

In our recent blogs, we covered the importance of pre-construction management, detailed design/build processes, and how to save time and money throughout construction. But, what if your project is a little more complex and requires a little extra time and attention?

In this blog, we decided to cover DBG’s approach to complex, multi-phased projects through Construction Management.

 

General Contractor vs. Construction Manager

While the terms “general contractor” and “construction manager” are often used interchangeably, these titles actually represent two very distinct roles within the construction industry.

Construction managers are typically involved from the start of a project, helping the client with the initial planning, as well as the selection of an architect and, sometimes, a general contractor. Construction managers frequently perform the first two tasks, then also serve as general contractor for the project.

Primarily, construction managers schedule and integrate all design and construction processes to ensure constructability and feasibility of the client’s project. They coordinate all the moving parts of a project – clients, architects, trades, subcontractors, tools, equipment, and materials – to complete projects on time and on budget. Overall, construction management is intended to streamline all primary concerns and decisions through a single entity.

A construction manager is also your primary point of leadership – both on-site and in the office. Your construction manager is responsible for strategic collaborations with architects, engineers, and city officials. Using these partnerships, your construction manager takes your vision and assumed the responsibility of coordinating all the necessary components of bringing your project to life.

 

Reasons to Consider a Construction Manager for Your Project

A Construction Manager Saves You Money

  • Construction management is particularly useful for projects that include elements of technical complexity, are multi-phased, or require multi-trade coordination. Construction management is a critical approach that streamlines a large project that may evolve or change in scope. Having a good estimate of the costs of your project is extremely important in ensuring your expenses don’t snowball out of control once construction has begun. A construction manager works alongside your architect to value engineer and provide alternatives for staying within-budget.
  • DBG was selected as the construction manager for repairing extensive tornado damage to the Moore Administrative Building. The project was multi-phased, with renovations covering over 60,000 square feet and multiple floors. In order to cover the cost of repairs, DBG’s client opened a purchasing order for $8,000,000.00. Through strategic phasing and value engineering, DBG was able to complete the necessary renovations under budget, saving our client 33% of their anticipated expenses.

…saving our client 33% of their anticipated expenses.

Reduce Your Risk

DBG managed the Moore project through a construction manager-at-risk contract. CM-At-Risk is a delivery method that implements a ceiling cost for the client and shifts the risk of additional expense to the construction manager. Working under a Guaranteed Maximum Price (GMP) is a powerful incentive for the construction manager to operate in the owner’s best interest.

A CM-at-risk contract also motivates the construction team to efficiently manage construction costs, knowing they are liable for any expense that exceeds the GMP. When a construction manager is bound to a GMP, the contractual relationship is fundamentally changed, usually resulting in a positive outcome for both client and construction manager.

Reduce Scheduling Problems

As the project lead, your construction manager should be able to phase out a complex construction job in a way that is financially beneficial for you. Renting a space for company operations comes with a hefty price tag for any sized business; so, moving clients into their own space faster usually means money saved.

During DBG’s work on the Moore Administrative Center, our team implemented strategic phasing to allow the clients to resume occupancy sooner than anticipated. By moving into their own building ahead of schedule, they saved an additional $50,000 in anticipated renting costs.

…they saved an additional $50,000 in anticipated renting costs.

Now that’s mission accomplished.

The Big Question: Lease vs. Buy

The Big Question: Lease vs. Buy

Considering a move?

For businesses looking to expand or move, one of the first matters at hand is: Leasing vs. Buying. A serious question. There really is no short answer. It requires diligent examination; as with every large endeavor, every detail matters.

 

Leasing vs. Buying

Usually, the most logical place to start is by examining the benefits and drawbacks of each of you options, especially as they pertain to your business. For example, a business undergoing rapid growth may consider buying a building to accommodate future expansion rather than increasing their leasing space – and expenses – as the company grows.

To help with your decision-making, here is a list of some pros and cons.

 

Benefits of Leasing

  • Property costs are spread out over the term of the lease.
  • The landlord pays for the cost of capital and repairs.
  • You can free up more money to put back into the business.
  • You are able to lease property in a prime location with fewer budget restrictions.
  • You have the flexibility to relocate at the end of the lease.
  • You have no responsibility for the building if it is damaged due to fire, storm, floods, etc.
  • Long-term costs of leasing are easier to forecast and budget.

Drawbacks of Leasing

  • You will have no control over the other tenants in the building. They could have a negative impact on parking, hours of operation, use, and compatibility.
  • For a business with easy access to capital, leasing may actually turn out to be more expensive than owning.
  • Even if your business becomes unprofitable, you must continue paying rent or face penalties to get out of the lease.
  • Most leases stipulate that the landlord may require you to remove 
any improvements you made to the premises.

 

Benefits of Buying

  • After the initial upfront costs, ongoing costs may actually be less.
  • You’ll have an asset for the business, and any appreciation that comes with it.
  • You have full control over the property and can make changes to suit your needs.
  • You will gain equity as you pay down the mortgage.
  • You have the option to lease part of the property to someone else, and you can use that money to help pay the mortgage more quickly, or reinvest.
  • You’ll have some tax shelter in the interest and depreciation deductions. Also, upon the sale of the property, the tax on the gains is usually lower than on ordinary income. The capital gains tax rate is currently 20% and depreciation recapture is 25%.

Drawbacks of Buying

  • Relocating may be more difficult. The process could take months or even years.
  • The down payment is often 20-30 percent. This is money you could otherwise use for the business.
  • Property management issues can become complex in areas such as legal compliance, health and safety, and maintenance issues–which can be costly.
  • The ability to refinance may be limited in times of economic recession or depression.
  • There are several transaction costs associated with buying a commercial property.

Leasing or buying commercial real estate is a big commitment–of both your time and your finances. You may want to check out DBG’s great tool for assisting with the decision-making process: a Buy vs. Lease Analysis Tool.

And a final note: If you have decided to proceed with purchasing a property, you also have the option of constructing a brand new building to suit your needs. You can always contact a qualified General Contractor to discuss your property and project needs.

Check back with our blog frequently to view future posts on that topic, and take a peek at some of our finished projects! If you have any questions about current or future projects, we would love to hear from you!