Why Choosing Between an ID or a Contractor is Not Important?

(and Your Guide to Choosing the Right Company.)

 

The Right Company

Finding which company to engage for your renovation is never an easy task. Typically most home owners will either work with an interior designer or a contractor. Most home owners would assume that engaging an interior designer is equivalent to better designs while having a contractor would help to save some money. However, we gather from our home owners that we often now have designers where their design outputs are equivalent to mainstream contractors and contractors that are almost on the same price point as designers. Comparing between the two groups by generalizing them is actually nothing but superficial. The question should be whether a specific company is suitable for you, not whether you should find an ID (Interior Designer) or contractor.

A home renovation could easily be one of the biggest investments you will be embarking on. It is important that you do our own due diligence and make an informed decision. In deciding whom to work with, we suggest that home owners do a quick 8-step analysis that focuses mainly on the company fundamentals. You may wish to apply these steps as a filtering process before you make the ultimate decision to find the “right” company. When we say “right”, we mean the most suitable company that is for you.  

 

  1. Company’s Value Proposition

Web designers, car mechanics and renovation contractors can all tell you one thing: The Triple Constraint of “good”, “fast” and “cheap”. If you want a good and fast job, it can’t be cheap. Although it doesn’t mean that you will be paying for it for the rest of your life, but the higher price you pay to have something done great is usually going to be far better than the price you pay to have it done very cheap and fast in most situations.

Ask yourself some questions before getting started. Are you looking for the cheapest in pricing or do you value good design and workmanship more, so long at a reasonable price? How long do you intend to stay in your new home or would it be tenanted out anyway? Is durability an important factor or you intend to move to another home in a few years? Just like every home owner needs are unique, no two companies’ offerings are alike. Even the quote that they give on an itemized basis can never be used in an apple to apple comparison even though the quote description appears to be the same. Different people seeks different things and you have to find the one that fits you the most.

Every company has to work with its own set of project costing and it is naïve to even ask them why there are price differences for every item. You don’t go to a Bentley showroom and ask them why Honda is cheaper. Just like buying a car, there are different make and models, it is about finding the one that fits you the most.

Essentially, you definitely have to be able to afford the company that you engage, but remember that this should only be one of the factors. Always remind yourself that price is what you pay for, but the value is what you get at the end. It doesn’t help that if it is slightly cheaper but doesn’t achieve what you want, or in the worst case, more expensive and yet still doesn’t deliver. There is nothing wrong with having a lower budget for renovation because you can have other priorities in life. The important thing is to find the company that is in line with your personal values.

 

  1. Business Model and Culture

The importance of understanding the company business model and their work culture can never be overrated. Do they have a reputation of being overly sales oriented (close first, say later) and enhancing shareholder value? This will be a serious risk as the company will do what it takes to on board the customers first, usually with non-customized “package pricing” that is not entirely comprehensive. It will also encourage cost-cutting measures that undermine the quality of the work. Do they behave like any of their staff or customers can be easily replaceable? Do they aggressively hire people to the job with minimal guidance and let the fittest survive on their own? Do they just accept and open their doors to any customers that come along for business sake? This is important. You can never have quality designers or workmen working in a company if the company does not itself attract quality customers. You will also not be able to attract quality customers if the people in the company cannot deliver. You can learn a lot about a company from who they hire and from the customers that choose to work with them as well.

In order to understand how they work, it is perhaps best gleaned from a first-hand visit to the company to meet up with them. After speaking to a few companies you would get to know them better. Do you wish to have a company that say “yes” to everything that you ask for now and then only to say ‘no’ after you engaged them? Do you want a company that is detail-oriented and gives constructive suggestion or creative solutions to tackle the same issue, or do you want one that sticks exactly to what you want and ask no further? (We do know of home owners who complain to us that they just wished that the company could do as they say and cut short the process.)

No one model or culture is necessarily better, but you should be finding the one that is more in tune to you.

 

  1. Theme Expertise

Is the renovation company familiar with the look and feel that you desire for your home? What have they done previously? Take reference from their portfolio and ask yourself if you would want to live in those homes. While the past may not be the absolute indicative of their future works, the past portfolio should give a good gauge. Look at actual done-up photos only and not 3-D visualizations. Every company would want to showcase the best of what they have. If there is a disproportionately large number of a 3-D drawings as compared to real photos, it can only mean one thing.

The overall portfolio should be reasonably consistent. Design inconsistencies may mean that their end result could be very designer-dependent or customer-dependent instead of system-dependent. As such, be very discerning to enquire if the projects are done by a team of designers or by individual designers (who may already have left the company). If there are only a small handful of projects that you admire and you may not like the majority of them, it could be that the home owners might be the ones that came up with the designs! Use logic, not emotion while browsing their portfolio. There should be some sort of design methodology by the company and process in place to ensure quality control.

 

  1. Financial Stability

Do they look like they have a constant influx of customers and ongoing work? Are their sales sustainable, trending better or declining? Do they have to spend a lot of marketing dollars to secure each customer? Do they have significantly high overheads or high burn rate? How many months may the company last without new sales?

On the other hand, a seemingly thriving business may not necessary mean well. It could also be that they are charging in a manner that gives them good business, but perhaps just hovering near the breakeven point. It may not make sense for them to carry on further at some point in the future as well when cash flow becomes an issue eventually. It has happen many times before and will continue to.

Is there significant performance risk on the part of the company? One of the key reasons why renovation companies cannot sustain is due to cash flow issues and this is often due to the payment terms.

Does the company require you to commit a very sizeable amount of deposit in order for you to even start engaging them? Do the payment terms look like they really have to lock you down from the start or is progressively spaced out throughout the renovation? Could the excess funds be used to fund other projects than your own? Do they start collecting for carpentry milestone payments during measurement stage, delivery stage or only at the beginning of installation? The payment terms tell us a lot about how well a company believes it can deliver.

On the other hand, do the payment terms look too good to be true? If the company requires only minimal payment from you even though significant expense are to be incurred during the renovation process, would you be worried that cash flow becomes an issue for the company eventually? What if the company encounters customers who default on payment? Would they be able to see through your project after that? Might they be using your funds to pay to the sub-cons for other customer’s project first? Would your project only get started after the previous customers make their payments? Would they have the financial strength to see through other projects even in the worst scenario that previous home owners do not pay up promptly?

We all hope to have good and reasonable payment terms, but if they are too attractive, it may also signal that they desperately need the business. Such arrangement is not going to be healthy for the company in the long run which will impact you eventually.

The last thing that you want is to say goodbye to your deposits if the renovation company decides to go out of business.

 

  1. Motivation

Are the people in the company committed to achieving a good result? Inevitably every project begins with some sort of sales. However are sales all that they care about or they spend reasonable time in the design and space planning process? Do they spend more time doing road shows and quotations or invest a good amount of time and energy on the design and execution? Do they care about if you really require something or just coming up with cookie-cutter solutions? Do they have your best interest at heart and try to maximize what you could do with a given set of budget?

While we can’t measure “motivation”, we can look at the final tangible output of the company. What kind of reviews and feedback do they typically receive in terms of workmanship, service or design? Remember that once the quote is given to the home owners and they have agreed on the scope of works, the company is not going to be financially much well or worst off because of the final delivery as long as it is of reasonable standard. Everything hinges on the integrity of the company to meet the expectations or even over deliver.

 

  1. Chemistry

The time taken to plan, design and complete a home would take a few months. Can you trust the company to deliver the result that you want? Do they instill confidence and inspire you to create a dream home together? It is important that you feel you can get along well with the people involved in the project. If you do not feel comfortable during the first meeting with them, things can only go south when the works get started. Don’t engage a company purely because the initial ideas or price seem “right” and you forget about everything else. Ideas or proposals can be amended and prices will adjust. But the people that you will be seeing will be the same throughout the project.

 

  1. Connectedness

Connectedness of the renovation company refers to their own network of workmen, supplier and as well as related vendors during the renovation process. Does the company have a good network of quality and reliable sub-cons and suppliers to go along with? Do the previous home owners make good reviews about the service and workmanship of the company? Are their design selections comprehensive and in line with your design taste? (Hint: Again, look at their real photos, and not 3D drawings)

Are you just one of the many clients that the renovation company has at any point in time? Is there a possibility that the company could be over stretched when you are just about to renovate your home? Is the company able to be consistent in its delivery based on its existing network? If the company has to work with 10 carpenters to support their ongoing projects at any point in time, do you think that all of them can be equally good relatively?  Every company has their own network, but what we are discussing is the “squad depth” of their crew. Is their next substitute in line just as good? Or do they limit their output based on the availability of their quality input?

Renovation also involves buying other items outside of the renovation quote. Can the company value add to you by recommending other reliable vendors for furniture and furnishings that are complementary to your house theme? If a company refers a vendor to you, it is likely that it will be a good one, because they are putting their reputation on the line by referring them to you in a way. Just ensure that their prices are reasonable.

When you engage a renovation company, you are essentially tapping onto their network. The quality network of their crew would be at your disposable to create the best outcome for your home. They would also be able to recommend you the best deals for your consideration and cut short the time you need to do your own research.

 

  1. Genuine Reviews

Be blind and deaf to any promotional messages, celebrity endorsements, awards or free gifts.  The best companies with good design and workmanship can stand on its own without sales gimmicks or excessive publicity. In fact nothing is really free. Look at the genuine reviews/testimonials written by their previous home owners. Talk is cheap. Every company will say that they are the real deal. Watch what they have done, more than what they say they can or will. If your friends have engaged them before, ask them for their honest feedback. But do note that while you can wait till the cows come home, you may hardly find a string of flawless reviews for any company in the service line. The best hotels or airlines do get complaints at times too, but usually we all know that some customers can indeed behave in a weird fashion too. There are just too many dependencies in the whole renovation project, minor hiccups are not uncommon and to be expected. We don’t expect them to get full marks just like we do in our essays, but we can aim for an A+ overall though.

 

Conclusion

Do take the time to ponder these 8-step analysis before you embark on your new home. It certainly makes more sense to evaluate your options based on concrete analysis of the company that you will be investing your future on. The debate between choosing an interior designer or a contractor totally misses the point.

Unless you had won the lottery or had a great run in the crypto market, you’re likely going to have a given set of budget for your renovation. In short, the key here is to get the best that you can afford. Everyone wants to save money, but don’t sacrifice quality or lose sleep over it.

You would know that you made the right choice, if after the end of the renovation, you were told that you have to renovate your home all over again, and you would still choose them without thinking twice.

 

Article by Cherie Lim