Thread: Building A Business

Exciting new franchise helps clients build their own home!



Michael New has an exciting idea in the way of a franchised turnkey business. DirectBuild is seeking to establish a national network of consultants who assist clients in building their own custom homes.

Home builder Michael New’s inability to be in two places at one time provided the inspiration for him to found DirectBuild, a turnkey franchised business that provides consulting services to homeowners who act as their own general contractor to build a home, make renovations or add on to their present homes.



New was already a successful custom home builder in Colorado when a good friend who lived in the San Francisco Bay area contacted him. The friend was a stockbroker who knew nothing about home construction. He was looking to completely remodel his home and wanted New to handle the project.



When New said he couldn’t take the time away from his award-winning home-building company in the Denver area, his friend had an idea. “I’d like to do it myself,” he told New. “Maybe you could put a plan together for me that I could follow.”



Making slight revisions to the manual he used to teach his own project managers – basically a time-proven, step-by-step system for building any type of home – New passed it along to his friend.

“I tweaked the manual and wrote it so that someone without any construction experience could follow it,” New said. “I got it in his hands. He completed his project and it ran very well.”



Five years later, New is franchising the DirectBuild program to establish a national network of consultants who assist clients in building a custom home in about nine months without the use of a general contractor, regardless of whether or not they have construction experience. DirectBuild’s services are also suited for select remodeling or home addition projects.



Providing unmatched one-on-one support, DirectBuild offers programs that can assist clients through early-stage activities such as finding the right piece of land, drawing up house plans and securing home-building loans through the additional phases of budgeting, hiring contractors, selecting materials and overseeing the entire construction process.



While allowing clients to be in control of their project, DirectBuild consultants actively participate with 25 scheduled onsite visits. In addition, DirectBuild’s affiliations with experienced subcontractors and supply houses help clients secure labor and materials at discounts ranging from 20 to 40 percent. Overall, clients can save between 10 and 15 percent by managing their own construction project with support from DirectBuild.

“DirectBuild offers clients a choice,” New said. “Perhaps they had a bad experience with a custom home builder or they bought a tract home from a big builder,” said the biz owner.



“Now they want to do things their way. Our clients love this program because it gives them the ability to get the house they want and to build it how they want. People really want to control their biggest and most emotional investment, which is their own home.”

Having launched the DirectBuild program himself in the Denver area in 2005, New expects to grant 10 franchises within the company’s first year and expand to 50 locations within three years. Besides DirectBuild’s home state of Colorado, targeted initial growth areas include Florida and California, based on their population and housing growth. New said East and West coast residents have also been found to have a greater propensity for being homeowner-builders than residents in other regions of the country.

The do-it-yourself movement definitely has expanded beyond installing a sink or finishing a basement. According to the U.S. Census Bureau, there were 2.06 million housing starts in 2005. New said research suggests that owner-builders represent about 10 percent, or 200,000 of those housing starts.



“The number of people who have shown an interest in DirectBuild is staggering,” New said. “I never realized the market potential until I became involved.”



New’s roots in homebuilding can be traced to his father, John New, who was a custom home builder in Southern California, serving an elite list of clients. Michael New learned under his father before launching his own home-building company, InVision Homes, in Colorado in 1993. The company has constructed more than 200 custom homes averaging $1.1 million in value and between 5,000 and 8,000 square feet in size. The company has won “Best of Show” at the Parade of Homes in the Denver area each of the two times it has participated.



New said it is just as easy for a client without any construction experience to build the house of their dreams using DirectBuild because the system has been developed over two generations and ensures a quality home and smooth process.

“Homebuilding is really more of a manufacturing mentality,” New said. “There is a right way and a wrong way to build a home, but there is always a system to do it. It doesn’t matter whether you’re building a 200-square-foot shack or a 10,000-square-foot palace,” said the entrepreneur.



New said his intent from the onset was to franchise the DirectBuild concept. He expects franchisees to come from three main categories:



a. Individuals with proven business management skills looking to go into business for themselves in a burgeoning market. Past construction experience is not necessary; individuals with industry experience can be hired while the franchisee oversees day-to-day operations and sales and marketing.

b. Retired builders or site supervisors with past building experience who enlist an experienced partner to handle business operations.

c. Current builders looking to complement their existing business and offer added options to prospective homeowners through DirectBuild.

New is projecting that a DirectBuild consultant will likely handle seven home projects within their first year, increasing to 14 in their second year before reaching what is expected to be the standard of 20 to 25 or more home construction projects in their third year. DirectBuild is particularly well suited for husband-wife teams, New said.

“We find that women know what goes into making a house a home, especially with interiors,” New said. “It gives clients another sounding board for their ideas.”

DirectBuild isn’t the only franchised company in the homeowner-builder industry but it differentiates itself from its competition in several areas; the foremost being that if for any reason a client can’t complete a project, DirectBuild will finish it under a separate contract. New said competition in the marketplace has only proven that there will be a strong interest in DirectBuild from both prospective franchisees and clients.

“I liken it to McDonald’s and Burger King,” New said. “When McDonald’s first came out, people wished they had bought one. Burger King came around and they had another chance. It’s the same situation with DirectBuild, but with many more benefits.”

The typical DirectBuild client is between 30 and 60 years old with an income of $100,000 or more. The clients share a common trait, or maybe more appropriately – a dream – that DirectBuild helps them fulfill.

“They are your typical A-type personalities,” New said. “They would like the control and to do something themselves. This isn’t something they just thought about. It’s something they have been thinking about for a long time. When the opportunity comes to them, they take advantage of it.

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