Discussion and Coaching on House Renovation Professional service

Home improvement in the form of house renovation has become an important aspect of pursuit for higher quality of standard of living. This results in good demand for professional services.

This article is a discussion and coaching for the aspiring professionals who seek a successful business path to give greatest customers satisfaction and highest professional practice thereby bringing in good profit and creating high reputation. The context of the business scene is individual house owners seeking professional services, which is cost effective and personally satisfying. Subsequent articles will deal with other aspects of the professional service and this one is limited to the initial encounter with the clients.

A successful house renovation depends on many types of professional services and trades. For example: architect, interior decorator, mechanical and electrical consultant, contractors, landscaping / lighting / plumbing specialists, quantity & cost surveyor etc. However, from the point of view of the house owners wanting to improve their home, what they want is upgrading to a wholesome house with all the necessary input from the many different specialists and trades. However, access to multitudes of different specialists is not only cost prohibitive, it can also be an awesome task to manage for house owners who may be just layman.

Hence aspiring professionals seeking to satisfy these individual house owners require different strategy and approach.

System thinking capability of the professional

House renovation professional, be it architect, interior decorator, needs the system thinking skills in not narrowly focusing on his or her own particular discipline as the only service that can be rendered to the client. He or she is required to understand the general principles of the other related disciplines and trade so as to serve the client better, and be in good control of the eventual outcome of the product. For example, if the architect is the chosen main service provider, he or she needs to appreciate the elements of interior design, electrical system etc. and define the generic requirements of these specialists input and co-ordinate such input later.

A small team of specialists e.g. architect and interior decoration designer can be combined with low overhead cost to serve the clients. The dynamic of the team requires leadership, singular or collective and teamwork, with one or both of them having good understanding of the principles of other trades for effective control of the final product.

Clients' requirements

It is obvious that professional service is to satisfy clients' requirement. In practice, clients often have difficulties to express adequately what they actually need. They may want this and want that, but that may not result in a final product that is really addressing the real needs nor gratifying in the long run. In another word, the clients may regret after the renovation that what was built was not needed after all, or something else should be incorporated.

It is important then that professional should help clients to identify what is best for them, not what the professional think is best from the professional perspectives. The following is a technique offered to solve such problem.

Helping Clients to build a larger vision of home improvement

At the start, the professional should make good situation survey of the premise - looking objectively at the current conditions of the house and surrounding, without evaluation yet. For example, get all the factual data, building as-built plan (if available), dimensional layout of the property, lighting system, color scheme, the main theme of the premise (if that could be adequately expressed), photos etc. etc,

Then interview the clients and get them to express what they want and need. At this stage, there should be minimum discussion, but a lot of note taking of client�s requirements. There is a tendency that professional in their zealous behavior, start to introduce ideas, suggestions, engage in discussion on pro and cons etc. of the various ideas. There is also the tendency that at this stage, the professional knowingly or unknowingly try to get the clients to commit to certain proposals on certain aspects of the house renovation. This can create un-intended consequences. Firstly the client has not been given the opportunity, nor encouraged to express the overall requirements - as each sub-requirement has been subjected to discussion, evaluation, and counter-proposals. Secondary, it can be very time consuming for both parties. Thirdly the professional may overly influence and steer the clients away from their direction. Fourthly, such fragmented approach does not help to build a shared vision on the final product that is win-win for all parties concerned. Fifthly note taking of clients' expressed requirement give good impression of respecting every single idea from the client without judgment.

Good facilitation skill is needed during the interview. As the professionals are experienced in their own discipline, they have deeper perception of the current conditions of the premise and see potentialities for improvement. Then the interview should be incorporated with various forms of questions to get the clients to pay attention to the areas concerned.

After the interview and notes taking, organize the clients' ideas into various categories e.g. major structural changes, architectural impact, interior, lighting, landscaping, maintenance items etc.� This is the time the professionals start to give their perspectives, innovative ideas, alternatives to clients' expressed requirements with good blending to the existing conditions, some of the clients' other requirements and possible future needs or changes.

Present such findings in the form of graphic, picture, and sketches etc. that help the clients to visualize better. A good discussion is then on the overall requirements, alternative ideas, conceptual proposals etc. This process helps to build a shared vision with the client. Once the shared vision is fairly well crystallized, all parties concerned are then guided by that vision. The presentation should also be accompanied by a rough cost estimate to help the clients to plan for his or her budget.

Pricing & Fee System

With respect to the above professional input in building the guiding vision for the house renovation, what should be appropriate pricing or fee? Before we deal on this aspect of the fee & pricing structures, let us look at the overall professional services and input that attract compensation and appreciation.

In principle, the following domains are and can be the professional services:

��������������� a)��������������� Innovative ideas / concept

��������������� b)��������������� Integration of ideas / concept with practical application to eventual realization

��������������� c)��������������� Plan, specification, drawings, detailing, cost estimate & contract preparation

��������������� d)��������������� Contract administration & supervision (if applicable)

Possibly due to lack of public awareness, there is less regard on a) and to certain extent b). Hence there is a general expectation of zero charges to a). In a way, people perceive less value on mental power input and only pay for physical input like actual drawings, etc. The above approach could be a strategy to break such perception of zero value for knowledge. The client can be informed of such approach i.e. the overall vision of what the eventual renovated house will be (even in stages over time) with a fee agreed. This fee can be partially absorbed into the actual construction cost (if the sum of the renovation is substantial). In this way, even if the plan get aborted, for whatever reasons the client does not wish to proceed with the renovation, compensation is made in the first place. This compensation is for ideas generation and consolidation, there is little physical input like detailing works, which do attract a lot of resources and time.

What then is the reasonable (quantum or percentage) fee for the innovative ideas and concept input? We will discuss on the general principles and rationale behind this pricing issue:

Market Pricing is to a large extend determined by the willing buyer and willing seller, or, supply and demand relationship.

From the buyer's point of view, he or she is concerned on the overall costs as the perceived value worth. Hence the above-discussed professional fee on innovative ideas is not the main focus of the buyer. The important question the client has in mind is - "eventually how much does it cost me in total on the proposed renovation of the house?" Hence it is of prime importance that the professional have an effective control on the entire execution of the renovation process. (This will tie in well with the earlier discussion on the necessity for the main service provider to understand the discipline and principles of other professions and trades.)

With the overall cost in good control, most professionals are governed by fee structure as advised by the relevant authority or institution, which is usually on percentage basic on the overall cost of the renovation. With good control on the overall cost, and known fee percentage, the professional will then have a good picture of the potential business revenue. Increasing business revenue should be derived from the followings:

��������������� a) Professional service provider own cost control in term of efficient and effective operation and management

��������������� b) Generating high volume of the business from good reputation of the professional service, e.g. quality and reasonable cost control. Hence contrary to the traditional narrow paradigm of increasing the renovation costs thereby fetching more percentage revenue, a new breakthrough in thinking for long-term growth in business becomes paramount. Eventually it is the satisfied customers who will continuously generate more business growth.

Dot.com era

Before we close this chapter, we could say a few words on the hot topic on this Internet world. As the professional gains more experience, knowledge and wisdom, the intellectual property and creativity becomes the valuable assets. Internet arena becomes a powerful platform to share and conduct more e-business. Hence a much higher source of business revenue can be derived from the global village of almost infinite number of potential clients. We could discuss on this topic at next opportunity.

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A response:

I bet the clients would like to see sketches of all the alternative and the ideas/concepts proposed and some may even expect to see a model of the house to be built. But most are not willing to pay for such services. Even if they are willing to pay how are we going to charge them?

Some ideas on the above :

To educate the clients to invest in a good overall plan has many advantages to all parties concerned. When the clients have understood these advantages, likelihood of their commitment to invest on good overall plan is high.

Benefits to the potential clients:

• a) It creates a vision of the final product (assuming pleasing and answering to their needs) and thus establish the creative tension or attraction for them to move towards the vision.
• b) The overall plan helps the client to manage their budget, without worry of entering deep water
• c) The visioning process commit the clients with their ideas and requirement, thus they feel the ownership of the plan and eventual implementation.
• d) As the overall cost (with breakdown) is made in relation to the overall plan, the clients will make his own judgment of the worth of the renovation. If the overall cost is perceived as reasonable to the clients (and the cost is inclusive of professional fees), the clients can accept. In another word, if the overall cost is not perceived as worth the market value, even with low or zero draft plan fee, there will be no further business deal.

  Note: We have to differentiate between Market Value Worth and Affordability (e.g. budget). For example, I like Mercedes Car. The market value worth is XXXX. I am not rich. I can't afford it now. But if that is the market value worth, I have to struggle hard to earn the money to buy it, if I really want to have one. In another case, a sale man tries to sell me an item which is perceived by me not worth the value (although I can afford it), even if he offers low or zero agent fee, there will be no business deal.

• e) There is less chance for the clients to regret on investing in renovating one part of the house, which may turn out to be misfit to the subsequent renovation work on other part, especially when the client has to carry out phasing of the renovation work due to budget or other resources constraints. Such regret will cost much more money to the clients, as compared with little investment cost on the overall plan. The normal tendency of client psychology is to blame the house renovation professionals as having no far sight (although the professional will argue that it was not in the original scope to plan for future renovation.)

Benefits to the house renovation professionals

• a) Good overall plan helps guide the overall scope and boundary. In this way, professionals could manage their time more effectively. As the time consuming part for the professional is the detailing work, and too fast jumping into the detailing work in the wrong direction (e.g. not guided by the overall plan), the effort is wasted, and that is, profit is down.
• b) It can be an effective business strategy that by attracting and committing the clients to the overall plan, the future continuing business is much ensured. For example. the client only asks for kitchen renovation as his affordable budget now. While designing for the kitchen, the professionals will still have to take care of the interfacing aspects of the kitchen with the overall building. Hence effort will have to be spent in that direction. This effort needs to be compensated. With the sketchy overall plan with cost implication, the clients can defer implementation of other parts of the building if there is current budget constraint. This is future continuing business for the professionals.
• c) The professionals get compensated for the initial work, even if the final renovation does not go ahead. As the larger revenue is from the actual implementation of the renovation, this initial fee can be absorbed into the total renovation cost, thus another attraction to the client.

  Assuming we have two cases of default :

  Case 1: After much detailing work etc. the client does not want to proceed and hence do not pay anything.

  Case 2: After the overall plan before detailing, the client does want to proceed and hence do not pay anything.

  Case 2 is still preferred as it incurs less costs to the professionals.

• c) Once the professional is convinced of such overall approach as win-win, he or she will find creative ways to convince the clients.

How much to charge for the overall plan with creative ideas?

The process involved for the initial work could be as follow:

• a) Site visit with measurement or data collection
• b) Interviewing clients for their requirements
• c) sketches with alternatives and cost estimate

The above resources involved are mainly time and brain power (besides overhead like traveling costs depending on logistics). The amount of time spend is depending on the experience and skills of the professionals, and the efficiency use of communication tools e.g. telephone, fax, internet etc. The professional has to determine the value worth of the time in relation to the prevailing market value of professional time. That is the minimum cost. Whereas for the brain power compensation, this can vary depending on the reputation of the professionals, very much like consumer pay high price for brand of certain products. Aspiring professionals should aim at increasing the value of the brain power by establishing his or her credibility and eventually his or her reputation as an authority in the specialized field.