DECISIONS, DECISIONS

We work in some very exclusive areas of the East Bay Area in Northern California.  While we keep our client list confidential, we are very fortunate to include among them some of the smartest and most successful people who live in idyllic neighborhoods that are populated by the acclaimed.  I wish we could work for them all.

Last October, our area was affected by fires that destroyed businesses, residences, wooded areas and prime vineyards in and around Napa and Sonoma valleys in an area that included five counties.  The fires claimed nearly 9,000 structures, including prominent hotels and prized wineries, over 245,000 acres.  To battle the inferno, companies of firefighters from near and far came to help.  Once they extinguished the fire, the rebuilding process kicked into gear.  In the ensuing months, much of the construction labor force that typically services our territory (engineers, architects, tradesmen, etc.) has headed north to join the effort to rebuild.  

We considered those opportunities.  We have done beautifully rewarding work in Napa before, and there are many properties that would challenge our craftsmen and put our specialties to great use.  But we have decided to stay put, to concentrate in our immediate area, and to serve our constituency and the projects they choose while others shift their focus to rebuilding and interfacing with insurance companies.

Performing our usual work has gotten slightly more expensive.  Redirection of materials have created some scarcities.  Subcontractors who have done our framing, rough plumbing and rough electrical who are based north of us have workers who live in those communities (two of those individuals lost their houses), and have understandably gone that direction.  

Since certain materials and tradesmen are less available, we are forced to become selective about which jobs we take on.  Like any other business,  we have to consider the likelihood that a project will be profitable, but there are several other factors that influence that decision.  Here are some of them:

Is it in our work profile?  Custom cabinetry, natural stone, fine wood finishes, automation -  these are the kinds of tasks where we want our team to stay on the leading edge, so while outfitting a coding farm with 200 Ikea desks in an open office would be highly profitable, that's not our lane.  We stick with the high end projects that we want to continue to master.

Is the timing right?  We have to be strategic about the timing of our projects and when we deploy certain assets.  If our finish carpenters have our cabinet shop filled with the paneling for a steakhouse for three weeks, we have to time a custom kitchen build around those weeks, or respectfully pass on taking the job.

What are the job constraints?  Will there be permitting issues or one-off inspections?  Will the job require specialized engineering that may be unavailable for a long while?  Are there HOA or historical society design reviews that are out of our timing control?  These issues can be prohibitive, and must be identified in the selection process.

What are the risks?  Are there strategic, operational, or financial risks that are beyond our comfort level?  Are there factors that make compliance more costly or difficult, or require additional certifications or crew training?

These factors make the work very interesting, but if we fail to recognize them early, could lead to us accepting jobs for which we are not the best suited, and in this climate, it is difficult to make time for projects that are not what we do best.

- Jon Leon Guerrero