Architecture, construction, interiors and furniture. This week’s guest is a successful architect from Austin, Texas serving the high-end residential market. He started his firm with a single speculative project and grew it into a $20 million integrated design-build firm.
How does a design-build firm like this work? How do they structure their fees and communicate with one another? How do they ensure that every project is built to the exact standards promised by their powerful brand?
This week at EntreArchitect Podcast, Design-Build is the Future of Architecture with architect Luis Jauregui.
Luis is originally from Mexico, and his family moved often when he was a child giving him great exposure to different architecture styles throughout the country. His father was a civil engineer, so the construction concept was already built into him. In high school, he discovered how exciting building was to him. He enrolled in the school of architecture in Mexico City, and within two months of starting school the teachers went on a strike that lasted for months. He then came to the US and attended Texas A&M with a degree in Environmental Design and a Masters in Architecture. He felt fortunate to have a professor who saw some of his work and helped him find a job with an architect. By the time he graduated with his Masters degree, he had six years of experience working with four different architecture firms.
One of his mentors began developing his own projects as an entrepreneur and influenced Luis greatly. In Mexico, architects typically run their own construction companies and the consumer comes directly to them for a building. Within two years of graduation, Luis was ready to start his own design-only firm. Soon after, he pulled together some money for a lot and began developing properties in Austin and San Antonio. In 1986, the market crashed and and he felt really fortunate to still find some great commissions despite the downturn.
Currently, Luis’s firm practices in Houston and Austin, and serves design-build clients throughout the Dallas area as well.
Why did you decide to pursue client-service projects, rather than continue with spec buildings?
Design came from a lesson learned: the speculative market has a lot of ups and downs. The custom business emphasized great design, and built them into a great, well-known brand which allows them to spread to other cities. They started the interior design branch of the company, which hurt the brand a bit with a lack of control of the interiors. When a client asked if they could offer furniture recommendations, the interior design team kicked Luis under the table so they jumped into furniture design despite the fear to try something new.
Where did your initial fear with selection furniture come from?
The fear came from it being an unknown thing and the fact that there were others in the market who were doing a great job. The entrepreneurial spirit pushed Luis forward to being a leader in the industry.
How does your fee structure work?
The speculative work is one price for everything. Because they’re selling a product, everything is included in the sale price. Client services are the custom part of the business so it works very traditionally. Instead of “architectural services”, Luis wants his clients to understand that they’re engaging a design-build enterprise; the final project is not going to be a design only. In the contract, they specify that they have ownership of the drawings until they go to construction. From that point on, they move to the “pre-construction” and then the construction contract from the state of Texas.
Can you walk us through your process?
The preliminary stage prepares a cost estimate with every specific piece of the project projected. That way there’s no mystery of cost, so they can move forward to the construction process and continue to fine-tune the cost as they go. Having control of the cost allows them to manage the experience that the client has.
How do you create an experience for your clients?
Luis feels the responsibility and burden of the control that they have, and uses it strictly for the benefit of the client. In order for their brand to work well and maintain trust with their clients, Luis is very conscious of the fears that the client may arrive with and works to put those to rest with his presentation and process.
How does your marketing work?
Luis deemphasizes referrals because he doesn’t want to have to rely on his busy, wonderful clients to get his next client; that’s not a very reliable way to do it. What makes the phone ring is having a great brand (a great website, advertising in magazines, hosting events at homes, etc.) that you can spread around to others.
Do you have a specific sales process?
Over many years, Luis has tried to have someone strong at sales by his side throughout the process. His wife (who is his partner and a real estate specialist) knows the company, the costs and the firm’s story. She is a great person to pick up the phone and work with the client. It’s important to recognize what your strengths are and allow everyone to work in their area of expertise.
What’s one of the biggest challenges you have?
Because they control the design and the construction, it’s too easy for the construction arm to talk to the design team and ask them not to throw in any difficult designs. It’s important to Luis that the architectural design stays in tact. While everyone needs to listen to one another, it needs to be the right balance that ultimately clients benefit from. It’s a constant process of fine-tuning to prepare for and move through each aspect of the project.
What is the one thing that small firm architects can do today to build a better business tomorrow?
“Communication is key. Talk to your team, learn about construction, be involved and create those kind of networks. Step away from the keyboard and the design table and spend time in the field. Pay attention and connect to other networks of people.” – Luis Jauregui
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Referenced in this Episode
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