Project Spotlight: The Financials

December 08, 2010

“I’m not a big fan of ballparking with people,” says Mark Mackmiller. “If I estimate $80,000 to $100,000, they remember $80,000 and I remember $100,000.” It opens the door to disappointment and mistrust. Instead, says Mark, “We go out and meet with people, find out what they’re trying to do, and show them similar projects” that mackmiller design + build has completed. He says, “Let me give you an exact number of what your project will cost,” and proposes a design agreement covering the design phase from conceptual through fully priced-out working drawings.
The design fee ranges from $500 for a small project to $2,000 for a large job like the Hahn remodel. (The fee is credited back to the clients if they sign a construction contract.) “I use it as a screening tool and to cover our cost in doing the design,” Mark says. “People don’t walk away from a $2,000 commitment.”
Mackmiller’s preliminary design of the Hahn project revealed that it was going to cost too much. The Hahns trimmed their plans, eliminating the first floor master suite and new garage, and Mackmiller came back with a more affordable $220,000 design. Add-ons by the homeowners raised the cost.
Mackmiller saw a 24 percent jump in sales volume in 2010 and projects a 41 percent increase in 2011. “We’ve hired Ed Wolf, a University of Minnesota architecture school graduate, and we’re grooming him for sales,” he explains. Until now Mark and Mary—both in their mid 50s—have been selling all jobs. “We sell to people in their 40s to 60s,” Mark says. “People often like to buy from people they like and who are like themselves.” Though only 24, Wolf relates well to Mackmiller’s current market base as well as to younger homeowners. He’s Mackmiller’s connection to a new generation of clients.

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