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Finance News - May 2003

Anticipating project needs can lead to good publicity, great profitability

By Randy Bonnecaze

The bricklayers are working on a jobsite and each is asked what he's doing. The first declares that he's laying brick, while the second says he's building a wall. The third gentleman, however, replies that he's building a cancer research facility.

As a contractor, you have a choice: You can work blindly, doing only what the owner asks, or you can use your experience to add significant value to a project. The third contractor is doing just that - he's not only "laying brick" or "building a wall." He's also well aware of the owner's objectives and the project's details, and he's ready to add expertise that will elevate that job beyond the ordinary. Let's look at how you, too, can enhance your construction company's reputation - and profitability - by using your experience and knowledge to help owners avoid mistakes.

See the big picture

Many contractors assume that a project owner knows what he or she wants and needs in a building. But, remember, most owners' core businesses are not making buildings or facilities. Sure, one may say, "We need to establish office space for 150 people and we want a Class A building." But what does that really mean? Translating what they need into an actual space or building means you must help them meet a project's intended purpose, which may not be what they specifically ask for. So you must look for issues related to an owner's business strategy, because most neglect this during their so-called "needs analysis."

For instance, a business that occupies downtown real estate even though a suburban location would better suit it. If you point out to the owner that clerical jobs are easier to fill in the suburbs, the company can better justify a move. And, as the contractor who uncovered this need, you'd be in a prime position to win the bid on this new suburban building. After all, you'd have already added significant value to the project.

Even if an owner has chosen an appropriate location, consider the building's placement. Suppose a company highly values convenient customer access. So it plans to build near a congested freeway interchange. Unfortunately, putting the building there may actually hamper - not help - customer access.

Another example is a company that wants to provide free on-site parking for its employees but doesn't realize the space available for the parking lot isn't big enough to fit its entire work force. If you catch such an error early in the project, you'll save the owner a lot of money - not to mention the hassle of dealing with the disgruntled employees - who couldn't park in the same place as their co-workers.

Look at the little things

As mentioned, knowing the end product and its purpose can mean the difference between a welltimed, successful project and a dragged-out, costly disaster. Although you must always respect an owner's plan, you're still the one putting that plan into reality. And when you're in the field, you may recognize when a specific size or material is not the best thing for the project - especially when you know what it will be used for.

Suppose the owner has specified a medium grade of flooring for the building and, knowing the structure's purpose, you recognize that part of the floor will get heavy foot traffic. Should you maintain a "respectful" silence? Of course not - suggest the owner enhance the flooring quality to meet the need that you know from experience the building will require. Let's face it: No matter how well you install the medium-grade flooring, the owner will never appreciate your efforts if the floor becomes a maintenance problem or deteriorates soon after completion.

On the other hand, the opposite situation could occur. Perhaps you've worked on projects where an owner was splurging on expensive materials that were simply overkill for that part of the building. Again, knowledge of the structure's end use could prompt you to suggest a downgrade that would save the owner money, provide funds for more appropriate upgrades and speed job progress.

Envision a brighter future

Focusing on an owner's needs has another benefit: marketing your services. If you can demonstrate your knowledgeability to a prospective owner before other contractors show up, you'll gain a key competitive advantage. And contractors who gain a reputation for quality construction work and the ability to save owners money will get more referral business as news of their sensitivity spreads.

Fact is, today's contractors aren't judged only on how they build. They also must stand ready to add value to a project in any way possible - and a good place to start is by ensuring that what you're building truly suits an owner's purpose.

Editor's Note: Randy J. Bonnecaze is a Certified Public Accountant (CPA) with Hannis T. Bourgeois LLP, Baton Rouge.

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