Your decor studio – how to plan customizations to increase your profit
Third in a series of six
Balancing homebuyer satisfaction and profitability is a difficult part of any production building project. You want the buyer to desire the customizations you offer, but you also have to make some tough business decisions to protect your own bottom line. Here are a few tips to help you provide homebuyers with structural customizations to their homes in a controlled way that will increase your profit.
Keep it under your control
It’s easy to feel like the customer should always be right, but it’s important to maintain control of your project as well. While the client is excited about their vision, you have the feasibility of the customizations to worry about. Accommodating all the client’s special requests will slow down the project and cut into your profits. A great way to manage expectations is to consult with the client to find out what they want and then present pre-planned options for them to choose from instead of giving them free reign with customizations. This way, you will give both yourself and the buyer a general sense of the cost involved up front, which will save you time and money. If you don’t offer customization in a controlled way, you risk your design consultants spending too much time pricing out options that the homebuyer might not even select.
Manage expectations with preset options
You can keep homebuyers happy and protect the profitability of your process by creating preset customization options. Work with your architect and construction team to come up with pre-made packages that you can sell. By offering a set of detailed, preset choices from the start, you can direct the client towards approved ideas and plans that won’t disrupt your production time lines. Streamlining the process still offers personalization to the homebuyers while keeping control over customizations.
Qualify your buyer
Time is money, and before you invest either in your project, you want to be sure that the client is serious about committing to the customizations they are requesting. Charging a non-refundable deposit up to $2,000, depending on the scale of the change is a good way to gauge whether or not a homebuyer is invested in making the change. Then part or all of the deposit can be applied to the cost of the change once confirmed. If they hesitate to commit to this preliminary step, it’s likely that they aren’t that serious about making a commitment to customizations in their home and you have saved hours of time and energy in the process.
Personalizing changes to a homebuyer’s home can be an excellent way to increase your profit per home when managed with an intentional plan.
Yasmine Goodwin is President of My Design Studio