This was written by Dan Cathy from Chick-fil-A. Very encouraging. a href=”http://www.cathyfamily.com/dan/blog/thought-for-the-week-take-a-step-back.aspx”http://www.cathyfamily.com/dan/blog/thought-for-the-week-take-a-step-back.aspx/a/div

“Very well thought out and concisely stated viewpoint. Very much worth the read. View the article here: http://www.remodeling.hw.net/owner-issues/regulation-or-strangulation.aspx?cid=RDU:100311:FULL”

A couple of years ago I saw an amazing product on CBS’s 60 Minutes – it was a fuel cell that could change natural gas into electricity. The inventor was promising from his perch in Silicon Valley that in a few years we wouldn’t have an electrical grid, and that 80% of homes would have this refrigerator sized, personal power plant. It was supposed to cut energy costs in half and emissions by more than that. I found it exciting, but incredible.  As in, not credible, another broken green promise.

Um, they did it.

They not only worked out the bugs, they now have it commercially available.  Right now, it is fantastic for commercial applications and larger homes. In those situations it can pay for itself in four years. If you are under SMUD, it will take longer because we have great rates on electricity.  However, if you are under PG&E (Placer County, El Dorado County, etc.) you can see SUBSTANTIAL savings and the four year payoff.  Here is an over-simplified picture of the system:

A popular book taught us that men are from Mars and women are from Venus.  If that’s true, then I guess you could say that remodels only happen on earth – which is the planet directly between Mars and Venus.  More clearly defined, a remodel is that unique creature that is 100% emotion and feeling and 100% logic and math.

Um, isn’t that 200%?  Well, I said it was unique. The point is that in order to have a successful remodel, you, the homeowner, MUST pay full attention to both the emotional side and the logical side of your project. Here is the biggest mistake most homeowners make: they pay attention to the emotional side (during design), then they turn that off and pay attention to the logical side (during the bid stage), and then they turn the logical off and turn the emotional back on during the build stage. To be successful, your remodel team (Estimator, Designer, Project Manager) should help you address both sides during EVERY phase of the project.  Here are some examples:

1. The Design Phase – A good designer will guide and inspire you.  They will help you create the floor plan of your dreams, never forgetting to educate you about every option and all of the latest trends.  With a good designer, you will create a thrilling design, far beyond what you thought possible.  However, that design will never be built.  A GREAT designer will be much different.  She will ask, “What budget would you like to work with?” and from that moment forward she will use your budget as a benchmark.  Before something is added to the project, she must consider if it fits in the overall budget.  Do you want a jetted tub?  Hey, me too!  However, a jetted tub will add at least $2,800 to your budget.  Do you want an electric venting skylight?  Who wouldn’t!  Unfortunately, that adds another $4,500 to your budget.  Don’t get me wrong, it’s not the designer’s job to determine the budget as you go.  She should be working closely with the estimator to keep things on track.  But during design, it is easy to get caught up in the process and neglect the responsibility of minding cost.

2. The Bid Phase – if you are working with an open bid system, then the math pretty much speaks for itself.  “I need to drop the budget $20,000”, ok then, we have to shrink the scope of the project and/or change the material selections by enough to cover $20,000.  As a Remodeler, I don’t have “free stuff” to give you.  Do you want ten more recessed can lights?  Then we have to charge you for them.  If I don’t charge you for them or “just throw them in”, they aren’t free.  They cost the Remodeler for the material and labor to install them.  If I remodel my house, it would cost me, just like it costs the client.  The material and labor must be paid for.  The difficult part of the Bid Phase is that clients frequently cut, cut, cut to get the price down during bidding, only to add back the same scope via change order during the build phase.  That’s fine, but when you do that please don’t become angry with the Remodeler because of the increased price.  If you know you are going to add it back in later, it’s much cheaper to do it upfront.  If you aren’t sure, then adding via change order is a viable option.

3. The Build Phase – once the contract and scope of work are agreed upon the work begins.  Soon after that, clients will begin several conversations with the Project Manager with the words, “the estimator said…” or “a long time ago, we talked about __________ with the Designer and…” etc. etc.  Few things are more exasperating to the PM than conversations he was never a part of, referring to details that are not included in the contract or scope of work.  You are only being charged for the items included in the bid and scope of work.  You aren’t being charged for items you spoke about but never were listed, that’s how you got to your acceptable number.  The days of having a buffer in the budget that allowed contractors to “give” you things are over.  Clients are cutting budgets to the bone, which is fine, but it forces the contractor to stay tight to the agreed upon budget.  If you cut something out to get the price down, don’t count on batting your eyes to get it added back in at the contractor’s expense.  A great PM will help you not get caught up in the whirlwind of “small” change orders that will kill your budget.  He will know that every change order costs, and every change order matters, so he will try to keep you to the scope that you originally wanted, and not be distracted by every “neat idea” along the way.

Although funny, the chart above is NOT a joke.  Having overseen hundreds of remodels, I can tell you the accuracy is uncanny.  You will find that your emotions will closely mirror the chart.  My final piece of advice is to be patient with yourself and the process, your emotions can pressure you to make poor decisions. Try to give yourself a moment of pause and make sure you’re balancing Mars and Venus.