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Building A Dream Business

What Makes the Production Tracker Such an Important Tool?

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Because it Helps Keep Your Business Balanced

Recently we discussed the importance of keeping your construction business from getting out of balance. Achieving a balanced business requires paperwork and we know how construction contractors feel about paperwork.

I know, I know, paperwork is not a very exciting topic, but neither is concrete. And we all know how important concrete is in supporting a building. The same is true for paperwork and your business.

One of the three foundational piers in business is administration and finance. One of the building blocks in that pier is a Production Tracker. This tool provides valuable information for forecasting the company’s financial needs and production plans.

Wouldn’t it be helpful if you knew:

  • Which types of work were consistently the most profitable
  • How you were doing at meeting your financial goals for the year
  • When you should have the signed projects finished to stay on track
  • How well you’re doing at getting proposals signed
  • What the average price of your projects are

The Production Tracker is an Excel spreadsheet that lets you gather and track information. It has preset formulas that determine and sort the information you need to make your business more profitable.

This document provides information for:

  • Creating and recording project numbers
  • Tracking project bid amounts
  • Tracking dollars of signed proposals
  • Tracking dollars collected from projects
  • Percentage of jobs signed
  • Percentage of dollars signed per dollars bid
  • Percentage of dollars collected per signed
  • Average dollar amount of projects bid
  • Average dollar amount of projects signed
  • Average dollar amount of projects collected
  • Projected timeframe for doing signed projects
  • Projected date work should be done

This list can seem overwhelming but it’s really not.

Here is an example of what the Job List spreadsheet looks like.

Let’s go through the document and break it down into smaller brick size pieces.

Creating and recording project numbers – Having a numbering system can help you sort projects so that you can review which types and size of projects are the most profitable and what you do the most of. It may be that your most profitable ones are not the ones you do the most often. Having this type of information can help you to focus more of your attention on the right kinds of projects for you.

This Production Tracker is a place to list project numbers in conjunction with the size and types of the projects, as well as their chronological order. This document provides the numerical part of the project number specific to each project. The other portion of the project number is determined by job specific parameters that are not included on this document.

Tracking project bid amounts – Our Blueprint for Building a Better Proposal system provides the dollar amount for each project. Once a proposal has finished, the specific information to that project is entered into the appropriate cells on the spreadsheet. This information includes Job Number (column E), the Customer Name (column F), Description (column G), Bid Date (column H) and the Project Amount (column I). Regardless of the system you use for preparing proposals, you should have a dollar amount that could be entered into this document.

As each new project amount is added in the project amount column, the total project amount at the bottom will update, giving you a total dollar amount of the proposals you have done this year. Based on your company’s history, this dollar amount should give you a clear picture of where you are in relation to meeting your financial goals for the year. We will explain this further with the tracking dollars of signed projects.

Tracking dollars of signed proposals – Once a proposal has been accepted, the accepted dollar amount should be entered in the signed amount column. Initially, this amount should be the same as the amount in the project amount column. Sometimes the dollar amounts of projects are changed due to change orders. This can be either an increase or decrease depending on the change order(s).

As each new proposal gets signed the dollar amount of the signed proposal should be entered into the correlating cell in the signed amount column. Just like in the project amount column, as each new amount is entered in the signed amount column, the total dollar amount at the bottom automatically updates giving you a total of work you must currently do.

With the total of the signed amount column and the total of the project amount columns, you should be able to get a clear picture of where you are financially in relation to where you want to be at year end.

Let’s say your goal for the year was to generate a gross revenue of $400,000.00. Using the example, you can see that as of December 12th you were at $352,877.66. This is close, but not quite there. If you compare the signed amount to the project amount ($664,381.27) you will see that the signed amount is 53.11% of the project amount. Based on this percentage, to get the signed amount to $400,000.00, the project amount would need to be $754,000.00.

This information is critical to the survival of your construction business.

Your business needs to be built on a solid foundation.

We’ve covered a lot here today. In our next post we’ll pick up at tracking dollars collected from projects.

Check out this and additional business building tools and training here. If you have questions, feel free to schedule a free 30-minute business coaching call.

Portions from a previous post 1/7/23 

The “Job List” Is One of the Foundational Building Blocks of a Successful Construction Company 

It’s Up to You to Get Unstuck

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You Have the Power of Choice

There’s a saying, “A rut is a grave with both ends kicked out.” Too often we get in a rut and don’t even realize we’re there.

This is how operating a construction company can be.

Plodding back and forth, doing all those things that need to be done, never looking up to see where we are or where we’re going. If we’re not careful the rut will get so deep that we’ll never get out.

This feeling of being stuck can be overwhelming. If we wait too long to do something, that’s when it becomes a grave, and we give up and go out of business. It’s just not worth it.

I could make more money and work less hours flipping burgers.

Last week, we discussed the difference between being self-employed and being an entrepreneur. The question you have to ask yourself is: do I want a job, or do I want to build a business? It’s up to you to decide which you want to be.

Building a business can be scary; it might not work. We know our rut well and it’s comfortable. Doing business because “we’ve always done it this way” isn’t a very good plan.

This kind of rut thinking doesn’t allow for building dreams.

Changing things just for the sake of change isn’t a good strategy either. Growing and changing is good, but there needs to be a plan.

Building without a plan isn’t a good plan, whether it’s a construction project or a business.

Things that need to be changed and are ignored have consequences, i.e., diapers, your car’s engine oil, furnace filters, toothbrushes, and bad habits.

Change costs time and money…the question is: is the change worth it?

Not changing is also costly. It’s up to you to decide which is more expensive.

You have the power to change if you want to. Change is up to you.

It amazes me how many times I’ve talked with people who do construction from their ruts. They tell me all about how frustrated they are with their business. Yet, even when we offer them a ladder to help them out of their rut…they won’t use it.

I understand. I’ve been there. Change can be scary.

I remember when I’d had enough of the rut. Doing things the way I was, wasn’t working.

It was after my partner, at a previous construction company, hired a consulting firm that things changed for me. They came in to help us with the business part of our construction company. It was expensive, but what I learned was worth every penny and it cost a lot of pennies (2 million to be exact).

The sad part is this is…I’m the only one that used the business tools that they gave us.

I’m still in business and they aren’t.

Just talking about doing something or buying tools isn’t the same as doing it…action is required.

If you or someone you know is tired of trudging back and forth in a construction business rut, then let us give you a ladder to help you get out.

You have the power to do this. It is a choice that only you can make.

If you would like some help getting out of your construction business rut, check out our tools and training, or schedule a free 30-minute construction company coaching call.

Portions from a previous post 4/27/19 

Being Careful to Not Get Stuck in a Rut 

Who Knew That I Was an Entrepreneur?

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That Was Never My Plan

Most people in construction would not consider themselves entrepreneurs. They see themselves as self-employed.

There’s not a huge difference between the two, but it is significant.

It’s the difference between working in your business or working on your business.

Someone who is self-employed is earning income from their own business, trade, or profession. This is how most people working for themselves in construction see it. It’s just a job like any other.

Most of them started out working for someone else. They learned their construction trade but not the business. Being self-employed tends to overlook the business part.

Doing business is scary…not to mention most self-employed construction people don’t like doing paperwork. The problem is, like it or not, self-employment is being in business.

An entrepreneur, on the other hand, is someone who organizes, manages, and assumes the risks of the business. This difference is mostly perspective, and it’s critical. It’s how you see yourself.

It’s about where your focus is. Are you focused on just showing up on the jobsite every day doing construction, or is it bigger than that? This is the difference between having a job and owning a business.

Is what I’m doing just a job or is it building a business?

If we see ourselves as just having a job, the daily rat race becomes overwhelming and is often the reason self-employed contractors go out of business within the first five years. The numbers are staggering.

So if you see yourself as self-employed, what are you going to do to avoid becoming one of these statistics?

The first step is becoming aware. You have to see the problem before you can do anything about it. Then you can decide if you want to keep doing things the way you always have or do something different.

After you become aware of the problem, you need to understand it. This is where things are going to get harder. It’s going to require some research. This is going to take time that you don’t have, but it’s time well spent if you want to stay in business.

Now that you understand the problem, you will need information and instructions for implementing changes. I know this sounds like a lot, and you may be wondering, is it really worth it?

If it is, then you need to learn these new and different ways of doing business and change how you do things.

If this seems like too much, maybe you should just go back to working for someone else!

If you decide that you want to accept the title of entrepreneur and work on building your business rather than just working a job, then we can help.

At Solution Building we help you make this transition from self-employed to entrepreneur. We have business building tools and training available.

If you have questions about transitioning from self-employed to entrepreneur, you can set up a free 30-minute construction company consultation. It’s up to you. You get to decide if you want to accept the role of entrepreneur or continue working as an employee for yourself.

How Much is Your Time Worth?

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Wow, a Lot More Than I Thought

Recently I’ve been extremely busy and working hard trying to get things done. I know that the length of my list is my choice. Busy lives are nothing unusual, especially for those of us working in construction.

So, how can we be more productive and decide what things on the list are the most important? The answer to this question will be different for each of us, but it’s something we have within our control if we just do something.

Spending time wisely comes down to prioritizing and making decisions.

I’ve always struggled with giving my time the same level of importance as other people. I wouldn’t be late to meetings with customers, committees at church, or in the community. The lack of importance I give to my own time results in me being less productive than I could be.

As I was thinking about how busy I am and trying to figure out what I should do next, I had a thought.

What if there was a monetary penalty for every minute wasted?

Let’s be honest…there is.

What is each minute of my time really worth?

So, I did some calculations –

  • There are 60 minutes every hour
  • There is an average of 12 hours per my workday
  • There are 6 workdays per my work week
  • There are 52 work weeks per year
  • This means there are 224,640 minutes available to work each year
  • My gross revenue target for this year is $400,000.00
  • $400,000.00 divided by 224,640 minutes means each minute of the day is worth $1.78

$1.78 for each minute doesn’t seem like that much, until I did some more calculations –

  • $1.78 x 5 minutes = $8.90
  • $1.78 x 15 minutes = $26.70
  • $1.78 x 30 minutes = $53.40
  • $1.78 x 60 minutes = $106.80

Who knew that my time was that valuable?

It’s amazing how much the little things can change the big picture. This gave me a whole new sense of urgency. It has caused me to evaluate decisions differently. Which of these things on the list is worth spending that much time/money on?

It has caused me to focus more intensely on which actions I need to take to accomplish my mission.

I’ve never been one to give my time the value it’s worth. Working for myself, it’s always hard to give it a monetary value. This discovery changed that.

This week’s solution has cost me $160.20 so far and by the time I get it published it’s going to be closer to $220.00.

I sure hope you find at least that much value in it. 😊

Of course, everybody’s level of importance is going to be different based on individual preferences. But this new awareness of the value of my time has given me a new focused intensity to spend my time wisely.

So…it looks like the time I spend is $1.78 per minute.

It’s up to me to spend each minute wisely.

Rewritten from previous post

Ideas Without Actions Aren’t Any Good

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To Build the Business of Your Dreams You Must Take Action

“I AM A PERSON OF ACTION.” “My future is immediate. I will grasp it with both hands and carry it with running feet. When I am faced with the choice of doing nothing or doing something, I will always choose to act!” – Colonel Joshua Lawrence Chamberlain

From the book “The Travelers Gift” by Andy Andrews

For years people have asked me where I came up with the business system and procedures that I use. As I thought about it, I realized that early on my business and life had developed without much intentionality.

I was a dreamer at an early age. I had big ideas and plans for my life. Then there was a portion of my life where I became disillusioned and accepted that my dreams were just that…dreams.

I decided I was just kidding myself the whole time.

Then in 2012 I had “A Life Changing Wakeup Call” and realized that I had gotten sucked into a world of doubt. I had given up and quit dreaming. It can be hard for those of us that are dreamers to turn ideas into action.

After my accident, I began to think about what my life was and what I had expected it to be. I became reenergized about dreaming and about life. It’s great to be excited about life again!

Dreams are just dreams if no action is taken.

Not that my life was terrible before the accident, it just wasn’t what I had envisioned. I had been living without a clear plan, and there was so much more for me to accomplish.

At that point I decided to become more intentional.

I’ve always been a planner but it’s sad that it took a hit in the head for me to realize the importance of intentional action.

When we’re young the tendency is to think that we’ll have all the time we need. There’s no need to think about the future…we’ll get around to that someday. Then one day we wake up and realize life is flying by and we haven’t done those things we wanted to.

You don’t have to wait until you’re smacked in the head to become intentional.

Think of your business as a construction project. It all begins with a dream. You can see the vision of the completed project in your mind. The tricky part is getting that dream out of your head and making it a reality.

Having a plan will let you see if it looks like your dream or not. It’s easier to make changes and corrections during the planning stage, rather than the construction.

After I realized that that my dreams weren’t going to happen without actions, I began to develop business tools and systems needed for building my dream business. It would have been easier if I had some help.

It’s always a good idea to have the help of a professional when drawing out plans and building your dream business. Their experience, knowledge, and skill can save you time and money.

This is why at Solution Building we’re making these tools and systems available to others in the construction industry.

To build your dream business you can’t stop at the planning…there’s more action needed.

Don’t wait to be smacked in the head to get intentional about taking action for building your dream business.

If you would like some help with planning or building the business of your dreams you can schedule a free construction company consultation.

How to Keep Your Business from Getting Out of Balance

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Be Careful with Short Legged Tables

Have you ever felt like your business and/or your life were out of balance? It’s a little like a three-legged table with a short leg…kind of wobbly.

I know I have felt this way and sometimes still do. You have probably heard the saying ‘feast or famine’. This seems to be especially true in the construction industry. It refers to the common problem of either having way too much to do, or worrying about how you are going to pay the bills if you don’t get some work soon.

Sometimes this is caused by situations beyond our control. The economy, the weather, or some other external force. More often than not the reason is an “out of balance business”.

Like a table with a short leg.

I wrote about this originally in April of 2016, and it’s a topic that is still relevant. I say this because I’m currently going through one of those times of famine. This is not due to a lack of leads for construction projects. It’s because I’m spending time getting the coaching and consulting for construction companies started.

One thing that I’ve learned over my 40+ years in construction is that business is a lot like a three-legged table.

When all the legs are the same length, it helps provide a level, sturdy platform for the company to sit on. When any one or two of them is too short, the table begins to lean. If it tips too far the company will slide off.

It’s never good when a company crashes to the floor.

The three legs of the construction business are:

1 – Sales/Marketing – Searching for and finding customers that you can help by providing your service and/or product through word of mouth, advertising, and awareness. Meeting with potential customers, determining what they want/need and preparing estimates, proposals, and contracts.

2 – Production/Operations – Organizing, scheduling, and maintaining construction projects. Determining who the right people are to perform specific tasks. Knowing the parts that are needed and making sure they fit. Maintaining communication between all parties involved.

3 – Administration/Finance – The preparation of documents needed to communicate, track, and record all aspects of the business. The filling out and filing of income, expense, banking, and tax papers. This leg is one of the easiest for ‘tradespeople’ to neglect. When it gets short, it can really cause the table to lean.

The tabletop is the big picture planning and organizing. It’s what connects the three separate legs. It’s easy to give too much attention to one or two legs and forget the others. This is when the tipping begins.

To get so focused on production of projects that we forget to follow up with a new customer shortens the Sales/Marketing leg.

To get so into preparing proposals that we forget to invoice shortens the Administration/Finance leg.

To work so diligently on tracking expenses that we don’t leave enough time for working on projects shortens the Production/Operations leg.

There is no perfect formula to keep the table from ever leaning.

The most important thing is to realize that it can happen and continually strive to keep the table balanced.

Most of us in construction started out by learning our trade while working for someone else. This is how I got started. The problem with this is that while I learned how to build a building, I wasn’t taught how to build a well-balanced company.

After years of struggling and learning things the hard way, I developed Business BUILDing tools that are great for building a construction business.

Just like any tool, if you don’t use them…things don’t get built.

Having the right tools and using them only goes so far. You also need to continually work to keep the table legs the right length so that the company doesn’t come crashing to the ground.

This is why at Solution Building we offer coaching and consulting to help you keep your construction business well supported and level.  

Now that I’m done sharing this solution, I’m going to get to work on some proposals so that I can lengthen the Production/Operation leg of my construction business!

Trying to Build a New Business

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Why Does Everyone Tell You It’s Easy When It’s Not?

Helping people in the construction industry build their businesses has been a real struggle. They say they need a better way of doing things but won’t take the time to do anything about it. They struggle with construction proposals, change orders, payment applications, saving money, communication, etc.

I know because they tell me this all the time. Not to mention, I was there too once so to totally understand.

So why don’t they do something about it?

Because, doing something about it is not a simple thing. I know because I struggled with these same problems in my construction company. Then I decided to do something about it. But what?

I began looking for solutions but couldn’t find what I needed. This involved things like computer software, hiring a consulting firm, etc. Not that any of these things were bad, but they didn’t fix the problems.

This is when I realized that there is no magic solution. It’s going to take time and hard work.

It’s a little like building a building…there’s no computer program you can download from the internet, or it won’t magically appear from a blueprint or some written instructions. It requires time and hard work.

When building a building there’s going to be bumps along the way, it’s not like after the first one is built the second one is going to be much easier. But, with each new project it gets better. The mistakes are reduced, and the process becomes more repetitive with experience. Then at some point it becomes so routine you can do it in your sleep.

It takes time and hard work, but it’s worth it.

This brings me back to the problem at hand – helping people in the construction industry build their businesses.

I’ve been working to get other construction companies to use the business building tools and systems that they have been asking for. I’ve been working on this for years and wondering if I’m supposed to keep trying. Then I think back about the difficult journey of building my construction business and keep going.

Part of the problem, like building the first building, is there’s a big learning curve, and it takes time to learn it.

I realized the other day that this is not just a construction business problem…it’s an every kind of business problem.

And the problem is this, we’ve become an immediate gratification society. We don’t want to wait for anything, and a business is no different.

We’re being over promised on social media and the internet with advertisements telling us how we can buy this thing and lose all the weight we want by next month or make a million dollars in six months, etc., etc.

Don’t believe it…it’s a lie.

I’m not saying these things are impossible. What I am saying is that they are highly improbable. After spending a lot of money and not achieving expectations, people are left disappointed and feeling like failures.

Marketing does a great job of doing what it’s supposed to. It gets you to buy things. The problem is the marketing makes it look easier than it is.

Building a business, like building a building, is not for the faint of heart.

This is why I’m going to tell you right now, if you buy our business building toolbox it’s not going to magically make your business an overnight success. Implementing and learning to use these tools is not magic.

Like any tool, if you buy it and don’t ever get it out of the box, you’ll never learn how to use it. If you’d like to learn more about how we can help you through long journey of building a successful construction business, schedule a free 30-minute construction company consultation.

What Makes a Construction Proposal So Important?

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It’s Like Quality Construction, It Sets You Apart as a Professional

As Gene is driving to his weekly Saturday training with John, he remembers how hard it was in the beginning to convince himself to take the time to learn this system and how glad he is that he did. He thinks back over what he’s learned during the past several weeks:

Gene’s getting excited as he pulls up to the SMR Construction Company office. Today they are going to put all the pieces together, creating a finished proposal.

After John and Gene have some lunch and get caught up on the past week’s events, John asked Gene, “You know how exciting it is when you see a new home coming to completion after starting with nothing but a blueprint? That is what we’re going to do today…we’re going to see…

A proposal taken from blueprint to reality.

Let’s get started.

The final step in preparing the Proposal is to transfer the information from the Scope of Work and the Worksheet to the Proposal template.

Start out by opening a Proposal template from the Building a Better Proposal tool.

If you use a project number, insert it behind the number sign at the top of the page, below the proposal title. Next, insert the customer and project information in the open areas as it pertains to the project.

Insert your company name at the beginning of the introductory sentence.

Copy and paste the description of the work to be performed and material to be supplied from the Scope of Work in the body of the Proposal template.

Next, take the prices from the Worksheet for each individual task described on the Proposal, and place it under each task on the right side of the page. At the end of each section, put the total price for that section. This allows the customer to see a price for each section, i.e. foundation, framing, roofing, etc.

Now that the description of the work to be performed, the materials to be used, the prices for each task, and the subtotals of each section have been placed on the Proposal, it’s time for the project subtotal to be inserted at the bottom. Insert a separate price for the sales tax below the subtotal. Sales tax rates will be determined by the location where the work is to be performed.

Next insert the project total after, “For the Sum Of:” on the Proposal both in written and numerical forms, this duplication (just like on a check) helps with clarity.

Now that you have a project total you need to determine how payments will be made. There are several different factors which can determine how this will be done, i.e. the size of the project, when material will be ordered and/or paid for, the financing of the project, your personal preferences, etc. This could be done at the completion of set production tasks, scheduled times (weekly, monthly, etc.) or when the project is finished.

Determining the date in which the Proposal will expire will be up to you. If the Proposal includes some materials that fluctuate in price often then you may want the expiration date to be sooner rather than later. A standard time frame is 30 days.

The duration of time to complete the project can be determined from the Worksheet. At the bottom of the Worksheet there are four cells, with corresponding amounts for each category.

The Labor Price is the total amount of labor costfor the project. The Hours, is the total man hours needed for the project, dividing the hours by $60/hr. This hourly rate can be adjusted to whatever dollar amount you determine. The Days are the total hours divided by 7 hours of production per day. The Weeks are total working days divided by 5 days of production per week. You then have the number of working days needed to complete the project. This will then be entered into the corresponding blank space on the Proposal. It’s a good idea to add a little more time for the unplanned.

You now have completed the proposal!

At this point I recommend going back through and proofreading the scope of work for each task, checking the math to make sure that the prices on the Proposal add up correctly. Don’t be surprised if a few of the numbers on the Worksheet totals are off a cent or two from the total on the Proposal. This happens sometimes due the combinations of formulas on the spreadsheet. The most important thing is that the prices on the Proposal add up correctly.

Now sign the proposal and deliver it to the customer.”

John looks over at Gene and asks, “Well what do you think?”

Gene smiles and says, “You’re right. It does feel like seeing a house where there wasn’t one before. It’s very satisfying.”

“Know this Gene, it’s also going to be like building the first house. You’re going to have questions when you start using the proposal system. Start using it and let me know when you have questions. It will be tempting to go back to doing bids like you used to, but don’t.

Providing proposals like this communicates clearly with customers and prevents misunderstandings. It gives you a production budget and scope of work for the production crews which increases your bottom line. This is different than how most companies do proposals and will set you apart as a reliable professional.

“Next week we’ll review your experience and spend our time answering those questions.

Now go use this tool and start building better proposals.”

Previous posts in this series:

What is “business clarity” and how do you find it?

What Does it Take to Build a Successful Construction Company

It’s Time for the First Meeting

Being Aware of Bid Mistakes is the Best Way to Avoid Them

Constructing a Building is Better with a Plan, a Proposal is No Different

Do You Want to do a Good Construction Proposal?

What is a Construction Scope of Work and Why Do You Need One?

What Makes a Construction Project Most Profitable?

What Makes a Construction Project Most Profitable?

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It All Comes Down to Dollars and Cents

It’s week six of learning the Building a Better Proposal system. As time consuming as learning new things is…Gene is beginning to see the benefits this proposal system will provide.

Just like building a house uses repeated actions to reduce the need to think about how to do things, this proposal system does the same thing when bidding construction projects.

As they settle in and begin the meeting, John tells Gene, “Let’s take a quick look back at what we’ve covered so far. We started by asking ourselves some foundational questions. Next, we discussed the common mistakes contractors make when doing bids. Then we went over the system and its parts. The last couple of weeks we’ve worked on gathering information and turning that info into a Scope of Work. Today, we’re going to start working on Pricing the Project

Communicating a clear description of the project is achieved with the Scope of Work. Accurate pricing is equally important to avoiding misunderstandings.

Poor communication will cause heartache, poor pricing will cost you money.

Open the Worksheet template. This blank Worksheet is where you will paste the information from the Data Base as it relates to each of the specific tasks of the project.

The Worksheet template has six different options for overhead and profit ranging from 20% overhead and 10% profit to 40% overhead and 20% profit. You can use whichever of the six options works best for you on the specific project you’re working on.

Typically, larger projects, i.e. new construction, large renovations, remodels, or large additions will use smaller percentages, while small projects will use bigger ones. You can use whichever works best for you. These percentages can be adjusted after you have finished the pricing if you want them increased or decreased. These documents can be modified with custom percentages as well.

Open the Data Base and prepare to copy the appropriate content into the correlating cells of the Worksheet of the project you are working on. Use the previously written Scope of Work to determine which of the categories specific to the project need to be copied from the Data Base and pasted on the Worksheet.

If more than one item for a specific task is needed, for example shingles, synthetic underlayment, and metal flashings, these individual items will be entered separately then added together to create one price for roofing.

You can add as many additional rows as you need, just be careful to keep the formulas intact by filling the content of the existing row to the new ones.

Determining which tasks should be inserted into the Worksheet is the next step.

Most of the tasks on the Data Base have options; determining which to use will depend on the specifics of the project. For example, how is the excavation, trenching and landscaping going to be done…with a skid loader, mini excavator or by hand?

Once it’s determined which methods, actions or materials are to be used for a specific project, copy the pertinent cells from the Data Base and paste them to the Worksheet.

After the pertinent information from the Data Base has been placed on the Worksheet it’s time to…

Enter the quantity of the work to be done.

Fill in the quantities needed to do the work for each item listed on the Worksheet. This may be in lineal feet, square feet, square yards, cubic feet, cubic yards, or numbers of pieces. Once this is completed for all the categories, you’ll have a price for each task of the Proposal!

This system offers a consistent repeatable process for preparing accurate proposals and is the difference between making money or losing money on construction projects.”

John looks at Gene and asks, “Well, what do you think?”

“Well, I thought my head was spinning before today…now I’m getting dizzy.”, Gene replied with a grin.

“I know it seems like a lot, but it really isn’t once you get started using it.” John says reassuringly. “Experiment with it this week. Call if you have any questions. Next week we’ll bring everything you’ve learned together into a proposal ready to be presented to the customer.”

Construction projects are consistently more profitable when you’re intentional with the dollars and cents.

Previous posts in this series:

What is “business clarity” and how do you find it?

What Does it Take to Build a Successful Construction Company

It’s Time for the First Meeting

Being Aware of Bid Mistakes is the Best Way to Avoid Them

Constructing a Building is Better with a Plan, a Proposal is No Different

Do You Want to do a Good Construction Proposal?

What is a Construction Scope of Work and Why Do You Need One?

What is a Construction Scope of Work and Why Do You Need One?

by

Clear Communication is Critical to Happy Customers

Last week John explained to Gene what project information needed to be gathered…

  • Project info (customer name, mailing address, project address if different than mailing, phone number, email address, project overview, budget, project deadline, any other relevant information)
  • Measurements and dimensions, existing and new
  • Building materials, existing and new
  • Pictures of pertinent areas and existing construction
  • Customer’s design ideas and finishes

Overlooking or forgetting something is a sure way to lose money when doing a construction project.

This week they’re going to take the information gathered and turn it into a Scope of Work. This will be the foundational form of communication between everyone involved in the process, i.e., customer, contractor, sub-contractors, employees, etc.

As they get started on this week’s meeting John asks Gene if he had an opportunity to use the Bid Sheet this past week and if so, how it worked.

“Yes.” said John. “It was a little awkward in the beginning. By the time I was finished gathering the project information I was glad I had it because there were a couple of things that it reminded me to do.”

John replied, “That’s great. Do you have any questions?” Not yet.” said Gene. With a smile John said, “You will before we’re done.

Okay. Did you bring it with you”? “I did.” said Gene, “I’ve got it on my laptop.” John told him to open it up and follow along. “Today we’re going to work on the most important part of communication between contractor and customer…the Scope of Work.

What is a Scope of Work?

A Scope of Work clearly defines and explains the work to be done. It should describe what is included in each specific task in terminology that both the customer and the contractor understand. A scope of work describes the work to be done on a project, who is responsible for completing the work, how the work must be performed (techniques used), and what materials will be used. It helps in the smooth operation of a project, minimizing situations leading to disputes. It is the first step to building a mutually beneficial relationship between a contractor and customer.

Communication with the customer needs be simple and direct while explaining clearly and thoroughly.

After having gathered the information needed for the project using the Bid Sheet, write out in a few sentences, or less, what each specific task is going to consist of. Explaining what you’re going to do in a way that a person with little or no construction knowledge can understand. Include as much detail and specifics as needed to be clear on what is or is not included in each part of the project.

Once this process has been finished for each task included in the project, you have a Scope of Work ready to be transferred to a blank Proposal template.

Here’s an example of a Scope of Work using the information from the Bid Sheet we worked on last week.”

As they’re wrapping up this week’s training John tells Gene. “Next week we’ll get into the pricing of a project.”

The real value of this Proposal System is in the pricing.

Previous posts in this series:

What is “business clarity” and how do you find it?

What Does it Take to Build a Successful Construction Company

It’s Time for the First Meeting

Being Aware of Bid Mistakes is the Best Way to Avoid Them

Constructing a Building is Better with a Plan, a Proposal is No Different

Do You Want to do a Good Construction Proposal?