Increasing Your Revenue With Client Custom Home Project Managers

When it comes to building a custom home, the Barden panelized construction method offers clients plenty of flexibility.

The future homeowner can customize any floor plan to meet all their needs and wants. They can choose from a wide variety of standard building materials, rather than a limited selection. They can build any time of the year (yes, that includes the winter). And they can be as involved in the project as they want to be.

For some clients, involvement in building their custom home means taking the lead and serving as their own general contractor (GC), a position independent dealer has. 

So what does this mean for you, the Barden Independent Dealer, when the client acts as their own custom home project manager? And how does this affect your custom home building business?

Contrary to what you may think, working with client GCs can be a new revenue stream for your dealership – and make completing their projects a little easier on you.

The Client Custom Home Project Manager – Your Competition?

Let’s get right to it – clients who act as their own custom home project manager aren’t your competition, nor are they taking away your job.

At first pass, the idea of client acting as their own GC might seem like a threat to your business. Doesn’t that mean they’ll be taking on the project in the same manner you do?

Absolutely not.

Client GC’s aren’t the DIY’ers who flip homes or convert sheds into mini-mansions. Rather, the client GC is simply a future homeowner who is taking on more of an active role in their project. The higher level of involvement does not mean your dealership and your expertise is pushed aside.

And therein lies an opportunity.

The ability for a future homeowner to act as their own GC on a project is something that many other custom home companies and dealerships don’t offer.

And while the client GC is a smaller subset of future Barden homeowners, they do represent a niche market that can actually provide a boost to your custom home business.

In a certain respect, adding this to your business is no different than a car dealership keeping a few higher-end models on its lot. While there isn’t a big demand for the premium-level vehicles, there are still some customers who do purchase them throughout the year.

Adding the Client GC Option to Your Dealership | 6 Things to Know

Like any other business adding a  product or service to its repertoire, there's a certain level of excitement in bringing a new offering to customers. And who can argue with another potential revenue stream?

At the same time, there are plenty of considerations that should be looked at beforehand.

The case is no different with offering clients the option to be their custom home project's manager.

Adding that as an option is something that can draw more potential customers to your dealership. However, there are a few things we tell every Barden Independent Dealer considering this for their dealership:

1. First and foremost – and we can’t stress this enough –  just because a client acts as their own GC, that doesn't mean they're taking over the project completely. You’ll still have an active role in their custom home project. While the scope involvement may vary from project to project, a Barden Independent Dealer is still responsible for a few key elements (we’ll look at this more below), such as helping coordinate resources or selling the framing package.
   
   
2. Who's responsible for getting insurance coverage for the project?

To be direct – when the client assumes the role of GC, they become responsible for getting the appropriate insurance for the project.

In more regular circumstances where you're the project's GC,  your insurance policies would cover the liability of the build. For some clients considering being GC, this is enough to turn them away from that prospect.
Why?

Getting insurance coverage for their project – and others that might be required for their project – can be a major headache and cause delays in moving forward. Unlike you, they don't have a company where such coverage is part of doing business. For the client, getting the coverage can be tough with a lot of hoops to jump through from insurers. Leaving the role of GC to you is a much simpler and more efficient option for their project.

3. Speaking of insurance and liability ...

Just because the client gets coverage for the project and is assuming a great deal of its responsibility doesn't mean your dealership is absolved of all liability. 

With your involvement in the project, there is the potential you could get pulled into an issue if something went wrong. This is no different than if you were the project's GC.

All of that is to say, the insurance policies your dealership already has to protect it still matter.

4. With respect to project risk, let's look at a different one: Financial

A rather understated advantage of the client acting as their own GC involves financial risk mitigation.

When the client takes on the role of GC, they become directly responsible for ensuring funds are available when required.

This is a distinct departure from the norm where the custom home dealer, acting as the GC, often has to manage the cash flow, floating payments while waiting for the client's loan disbursements. This "financial juggling" can put undue stress on you and risk the stability of the project if not handled carefully.

However, the client acting as GC eliminates this headache for your dealership. Put simply, the client is immediately accountable for payments and keeping the project moving along.

Learn more about what it takes to finance a Barden custom home project:

5. What about your payment?

One concern we've heard from independent dealerships is about compensation – does allowing clients to be their own GC eliminate service commissions? In short, no. As we'll always reiterate, your services are still necessary for their project, your involvement will just look a little different.

6. On that note – Your involvement and what it looks like...

(Again, we'll get into this a little more down below) We can't recommend enough having a written agreement that details everyone's role in making a client's custom home dreams come true.

For as much as it's a protection for your company and investment, this agreement is also a protection to the client —- especially if there are any misunderstandings about what work would be done or when something should be completed.

In a way, the agreement can also serve as another roadmap for the project, making sure everyone understands what's necessary to make it happen and when certain elements need to be completed.

What Working With a Client GC Looks Like

While the client will take on the heavy lifting of managing their project, you and your dealership’s services still very much have a place in the project.

In fact, without your dealership in the picture, the client wouldn’t get far in their project at all. Barden does not sell material packages directly to clients. And if they're planning on doing any customization to their floor plan, they'll need to work with you and our Design and Drafting Department.

So who does what? We've broken down the project responsibilities in this handy chart (something that's worth showing a client considering being their own GC):

Take a deeper dive into the client GC & independent dealer roles: 

• [How to] Build Your Custom Home With Barden
• When Your Client is Building a Custom Home: The Dealer’s Role
  
  

Tag Teaming Custom Home Building Project Management 

As with any Barden custom home build, the future homeowner will be involved in some capacity throughout the entire project – it is their next home after all.

While client GCs represent the most involved future homeowners for a project, they are still clients and will require your expertise and assistance. What's more, they represent another way for you to grow your dealership and offer another – more hands-on – pathway to custom homeownership.

Learn More About the Barden Independent Dealer Program