There is an expression that I use probably more than I should:
He’s got a big bag of nothing
or just simply
He’s got a big bag
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The meaning behind this phrase is a person who will talk at length about a subject they don’t know anything about. It’s not much different than saying someone is “full of hot air” or “all talk and no action”. Lately, I have been using this phrase while trying to describe different types of clients and the way they approach their construction budgets – and yes, it involves bags – (but in this case, the bag is an metaphor for the clients project budget).
Quantity over Quality
Client #1 views their bag as empty but sized to accommodate the budget – i.e. – they can put $500,000 worth of stuff in that bag. The way they perceive things, they select a project item and put it into the bag. After a while, the bag is full but they still have items left that they want inside that $500,000 capacity bag … so what do they do? They cram it on top, jam it into the side – whatever it takes as long as it gets in the bag. Don’t worry about the fact that some of the items already in there are getting smashed, broken, deformed … it doesn’t matter. If everything has to get a little worse so that there are more goodies in there than they are happy campers. Just get more stuff in that bag!
Quality over Quantity
Client #2 has their $500,000 bag but the way they see things, their budget is already in this bag. As they select items from the list, they take money out of the bag to cover the expense. When the bag is empty, they stop pulling items off their list. They may not get as much stuff but what they do get is going to be exactly what they wanted.
This type of get more for less type thinking is fairly unique when working with clients who don’t have any experience dealing with construction costs. Most people go though their daily routines selecting items based on a balance of want vs. need vs. cost. It’s a skill that most people master out of necessity:
12 pack of Coke vs. case of Big K Cola – (does it really matter?)
iPad vs. Mortgage – (mortgage should win here)
Some fresh meat vs. lots of rotted meat – (I’ll take the fresh please)
I try to help my clients understand the importance of identifying a budget and sticking to it – but I also put a lot of importance on setting priorities and understanding the cost of the things they want in their projects. Get what you need and then start adding items from your wish list. All too often I hear horror stories of very intelligent and successful people that make terrible decisions based on what makes sense to them – despite any evidence to the contrary. If they don’t get everything they want for what they think it should cost, then they simply move from contractor to contractor until they find someone who tells them what they want to hear. Do I really need to tell you that the end of that story is never a happy one?
“Sure, I can build your dream house for $80 a foot” … “you didn’t think that you were going to get straight walls for that price right?”
“What do you mean you can’t get it to cool below 80 degrees? Was that important ’cause at $80 a foot, I didn’t price it with air conditioning.”
“You bought our ‘Atrium’ style plan … ’cause at $80 a foot it doesn’t come with a roof. Roofs are going to cost extra.”
While it might seem like I’m poking fun at contractors – I’m not. If you are getting the same basic pricing from everyone who looks at your project, you can’t expect to find one who can still give you what you want without there being consequences. If three bids come in and they are all around $50k to $70k over your project budget, the solution isn’t to find cheaper contractors.
If you are one of the people out there reading this, shaking your head in agreement, then you should pat yourself on the back and congratulate yourself for grasping what seems like an easy concept – you clearly have a bag with something in it. Too bad everyone doesn’t think like you do because there are a lot of people walking around out there with a big bag of junk.
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That’s a very good piece. Thanks for the read Bob. Construction budgets and the cost of construction is perhaps the slipperest of slopes we deal with.
And then of course we’re dealing with pricing by contractors, an industry that in most states is required to place registration numbers on all of their signs and literature so people can find them if stuck with shoddy or incomplete work.
Doug
Bob, you are the only person that I read fairly regularly on linkedin. Of course, I love houses…but your provide interesting, relevent text that teaches, amuses, explains. Always a treat! Sheila
Thanks Sheila, what a lovely thing to say.
I hope all is well with you and your still enjoying yourself over at the Forest Lane VCR offices!
You get what you pay for…. It seems the Walmart mentality is trickling up (yes I shop there now and again) The builder must make a profit in order to feed his family. Squeeze him too much and you leave him no choice but to cut corners.
In this case, you are assuming that the contractor is malicious – which has been known to happen. Even under the best of circumstances, you get a contractor who simply discovers that what there isn’t enough money available to cover what the client wants.
I like to go into every working relationship thinking that everyone is honest so that is the premise I am working with on this post.
Thanks for taking the time to comment
So much common sense here…thanks, Bob!
Just curious…and maybe this is a discussion for another time and place (or maybe it’s none of our/my business), but how much budget review do you do on a project? I can imagine that when you first get it in the door (or better yet…while still in the selling phase) you do a quick reality check to see if the size meets what you typically find to be your $/sf (your construction budget post was great, by the way). But, do you do a more itemized project-budget review between SD and DD or DD and CDs, or are you typically getting your next project cost input from bids by qualified contractors?
Garth,
Those are all great questions. The truth for how I operate is that the project budget is under review with every gesture we make at every step along the way. Given that we do so many of these types of projects, we can almost fall out of bed and hit the budget within 10%. We try to alert the client with every decision along the way if something they are asking for is within the parameters of their budget. We don’t do itemized budget reviews until the project goes out to bid – normally that’s because it’s the first time a majority of decisions have been made.
You might be surprised how many clients either don’t tell us their budget or give us a false one. There are also people who have the attitude of let’s go for everything we want, see where it lands, and then make adjustments.
I am okay with all of these – it’s just part of the service process.
I’m having a big bag of deja vu moment right now. Too many situations of quantity first or spending money in the wrong places or on the wrong things.
And yes a 12 pack of Coke far exceeds any other cola, let alone big K.
I was worried that this post might come off judgmental, I still am quite frankly. The point I was going for is that it is important for clients to understand the impact of their decisions, realize that they have some ownership in the stewardship of the budget, and that it’s okay if they want more for less, just don’t expect it to be the highest quality – something has to give.
and don’t be hating on the Big K cola! … ( I drink Dr. Pepper anyways)