So having devoted two blogs to stating the case for making a profit when building green, how or where do we start? I think some variation on the Hippocratic Oath of the fourth century B.C. would be first. You know, primum non nocere, “first, do no harm.” I guess back in the day when medicine was really in its infancy, Hippocrates, the father of Western medicine, got together with some other doctors and they agreed on some ground rules for the practice of medicine, including one that essentially said, before we try to fix the patient, let’s at least agree we will not make things worse by harming him.
As the green-built world goes mainstream in residential housing, I think we too should agree on ground rules for our businesses. For green builders and remodelers, my variation of the 2,400-year-old Hippocratic Oath would be “above all else, lose no money” or “above all else, do not leave any money on the table.” Because just like a good doctor, before we can make things better we have to agree not to make things worse. And if we are going to start out losing money when building green, we will definitely be making things worse. In fact, we owe it to ourselves, our employees, our families, our larger community, and yes, our customers, to make sure we are profitable in building green.
So the first commandment we need to learn when following the Green Built Hippocratic Oath is: 1. Put something in for everything. And that can be kind of tricky for someone new to green building because, in many cases, we don’t know what “everything” is to begin with. In traditional building, or what I like to call “obsolete building,” the more detail in our estimates, the better. If our estimating and production systems are accurate and reliable, we should be seeing a slippage of no greater than 2%. That means our actual construction costs end up being within 2% or less than the budget. We do this in part by learning that no matter how small the item, we must account for it in the estimate.
Other Blogs in this Series
You may hope for the best case, but do not budget for it. In fact, you should budget for realistic scenarios. This means we must include small direct construction cost items like generators, temporary air-conditioning units on-site, utilities, weather protection systems and floor coverings, mid-production house cleaning, etc. But with green building or remodeling, some of the people you are working will be new and you may not have a track record of working with them. So, unlike with your longtime trade partners, you really have to be diligent in interviewing your new trade partners to find out what they may not have included in their estimates. You may need to budget extra time for them to complete their work until you know how reliable the work schedules are that they gave you.
And don’t forget to budget for systems failures that need to be repaired. For example, best green building practices require you to seal your ductwork during construction to keep your construction dust and debris from getting inside. Has your HVAC partner budgeted for this? Have you? Will sealing them one time work, or will they have to be resealed every week? Will your painter apply no-VOC paint for the first time? Has he or you allowed extra time for the paint crew to get a feel for how the paint flows, or do you just have your regular number of weeks allocated for them to complete their work?
Thus, in order to follow our prescription to “first, do know harm,” we have make sure we have put something in for everything, no matter how small. Interview your trade partners extra hard. That goes for your production managers and superintendents. Get closer to and talk with your suppliers and manufacturers’ reps more than you ever have before. Ask lots of questions. Talk to your customers and help keep their expectations appropriately aligned. Raise your budget for 1/2% to 1% for slippage if need be. Expect the unexpected. Because whether you are rock climbing or building green, remember what the sticker on my laptop says: “It’s a significant emotional investment the first time you do it,” so you better be getting paid to do it right!