Growing a Business
Accurate Development owner shares lessons learned from 25 years in the industry.
Kevin Johnson never really considered doing anything else. Growing up with a dad in the commercial construction business, Johnson had spent most of his life on job sites. By the time he finished school, it was only natural that he follow in his dad’s footsteps.
But Johnson made his own path. And this year his company, Accurate Development, celebrates 25 years and the path that brought it there.
From builder to developer
“When I started, I went into residential because the market was good, and it didn’t take as much money to get started,” he says. “A guy could start a residential construction business with just a small investment, but commercial construction took a lot more up front.”
Before long, Johnson was specializing in high-end custom homes and developing the land on which to build them.
“I got into the development side pretty early because we wanted to build more than just single homes,” he explains. “Our houses are upper-end, so I can’t put them just anywhere in any development. To build the type of homes we do, we had to create our own places to build.”
When Accurate Development started 25 years ago, there was a small handful of executive-level developments in the Des Moines metro area. Today there are even fewer.
“Some of the developers doing those types of developments then were wanting to get out of the development side,” Johnson says. “Looking ahead, I could see I was going to have to create my own developments if I wanted to keep doing that type of construction.”
Since then, Accurate has built a reputation for doing more than just building beautiful custom homes. Johnson explains, “We like to say we build more than neighborhoods—we create communities because we don’t just do lots and houses. We design communities with parks and trails.”
In fact, Johnson says that approach has enabled the company to develop good working relationships with every city in which Accurate has developed land.
“Years ago, when we started the Hallbrook development in Urbandale, the city told us it felt expensive homes like the ones we were proposing would be a drag to its bottom line, that it cost more to work with developers on that type of property than it was worth.”
Johnson believed differently. So he hired someone to do a cost comparison, and the results helped him win the city’s support on that project. “At that time, about 15 years ago, we found that houses selling for less than $150,000 were a drag on a city’s bottom line taxwise, but houses over that amount were net positive for the city. And our typical home then was about $400,000,” he says.
Communities have come to recognize the economic benefit of developments like those created by Accurate. And many cities now require developers to incorporate things like green spaces, parks, and walking trails, all features that have been standard in Accurate developments for years.
Custom designs to design center
The company was also ahead of the market as one of the first to offer an on-site design center more than a decade ago.
“What’s evolved is the result of what our clients needed,” Johnson explains. “We have a lot of clients moving here from out of state. When they come into town for a weekend, they have a lot of decisions to make and want to be able to make them in a couple of days.”
To accomplish that, Johnson says Accurate needed to provide immediate access to all those product selections. “It would take months to make those selections if we had to go from place to place to choose every product. Our design center allows us to do all that in a few hours.”
The company’s new office in West Des Moines includes a design center that is four times larger than the previous location. In addition to displaying complete kitchen layouts, fireplace designs, and bathroom fixture options, the site provides homeowners the opportunity to see products in both natural and artificial light so they can get a more accurate sense of the finished design.
“All of this is market-driven,” Johnson adds. “We used to offer only traditional; everything we built was traditional. Now there are contemporary, transitional, traditional, and everything in between. We can offer a whole range of selections here that we couldn’t before. You can’t just offer one style.”
Surviving the ups and downs
Johnson laughs when asked if he has advice for young builders just getting started. “I don’t know if I have all the answers,” he says. “Everything is more difficult now than when we started out in business 25 years ago.”
One thing Johnson does know is that he wouldn’t do anything differently. “The reason for that is we changed when the market changed. You have to adapt to meet the market, and that’s what we’ve done,” he says.
“We started a commercial side to the business when things bottomed out, primarily because I had a bunch of good people that I didn’t want to lose. Now we run these two completely separate businesses because they don’t overlap at all—the subs, the business agreements, everything is completely different.”
Johnson says during the most recent economic downturn that change really helped the company survive. That, and repeat buyers on the residential side. “The houses we sold during that period were virtually all repeat buyers. If I didn’t have that, I probably would have closed up. Things were bad during that time, but we survived.”
Accurate did more than survive. The company grew. Twenty-five years in the business teaches you how to do that.