Timothy Cleary, engineer and general manager of Williamsburg, Va.-based Charles W. Ross Builder, doesn’t hesitate to discuss the reasons the firm went design/build in 1999. Nor does he hesitate to point out that revenues total two and one-half times what they did before the switch on roughly the same number of homes.
"We went upscale with our clients. It was a major awakening," Cleary says. "At one point we were competitive bidding on three projects, none of which we got. We found we just couldn’t compete on price."
By taking on design/build, the firm was able to attract a greater amount of higher-end custom homes, increasing revenues without taking on more projects. The firm added a licensed architect in Keith Sobczak, giving the company both architect and engineer and bringing design completely in-house. This addition also allowed for better estimating, negotiating and pricing, which in turn produced increased profitability.
"When it comes to the architecture, we try to think in the backs of our minds about how we are going to build it. We don’t get an unlimited budget so we take budget and building into account," Sobczak says.
In the end, the goal is to hold the maximum error rate to under 3 percent. "The way to maintain your reputation is to keep the client’s expectations calibrated throughout," Cleary adds.
One of Charles W. Ross Builder’s best practices is the use of a detailed annual report as a barometer of where the company has been, where it presently stands and where it expects to go moving forward.
"The annual report tends to be backward looking. You have to look backward to look forward," Cleary says. The report categorically tracks expenses, margins and net earnings, all of which contribute to the forward-looking component of the report — the supporting objectives.
The supporting objectives are goals the builder sets forth for the coming year (i.e., increase market share; improve sales and marketing effectiveness; and provide an improved customer experience). Beneath these objectives are specific strategies the company will use to address them. For example, strategies for increasing market share have included throwing a 20th anniversary event at a model home to rub elbows with past and current clients as well as trade partners; improving gross margins on speculative homes by more accurate estimating; and continuing to assess growth in new markets not yet deemed high-margin opportunities.