Project Spotlight: The Financials

Click here to read the full article.

When many contractors around the country are struggling to stay in business, Tod and Kristin Sakai have seen their three-year-old design/build company, Sockeye Homes, grow robustly. They expect Sockeye sales volume this year to nearly double 2009’s volume, reaching $2.5 million.
This despite an aggressively promoted low price pledge. In fact the Sakais back up their company slogan, “Award Winning Quality at a Lower Price,” with a lower price warranty. If prospects present a detailed, lower price proposal on remodeling or custom home construction from a comparable company, Sockeye will either meet that lower price or give the prospects a $100 gift card.
The key word here is comparable. “We’re never going to be the lowest priced company,” says Tod. There are “hungry guys out there who lowball the estimate.” But given an “apples to apples” comparison, Tod is comfortable that his price will be lower than that of his peers.
How do the Sakais do it? A big factor is low overhead. They work out of their home, not “a fancy downtown office,” says Tod, where rent is high. They keep payroll low, with just eight employees. They subcontract the architecture and interior design to trusted pros.
And they exercise an exceptionally close watch over pricing and production. Tod does all the company’s sales and estimating. He listens closely to what prospects want, then prepares comprehensive estimates featuring virtually no gaps or omissions that would come back to bite him once production begins. He trains Sockeye crews and trade contractors to follow precise procedures he specifies for most aspects of construction, proven procedures that produce excellent results with top efficiency and no do-overs. A jobsite binder detailing the procedures is available for reference. The result is that Sockeye can charge less than other professional contractors, still do quality work and make a reasonable profit.

Click here to read the full article.

The dollars and cents of Sockeye project