Building Anything is Better When You Start with a Plan

So Wouldn’t You Like a Plan for Doing Construction Proposals

It’s Saturday, and today will be Gene’s third meeting with John. Even though there’s been no change in Gene’s overwhelming workload, today is the first time he’s not considered canceling. He knows the value of this information and is looking forward to the opportunity to learn more from his mentor.

It’s Gene’s turn to provide lunch and John’s in for a treat…Gene’s bringing chili-cheeseburgers and fries from the Burger Station. Driving to John’s office, the smell of those burgers is more than Gene can bear, so he samples a few fries on the way, just to be sure they’re okay.

Gene had barely gotten in the office door before John yelled out from the conference room, “You brought Burger Station!”. Over the years when Gene was working for John, the two of them frequented this fine establishment often.

As Gene gets lunch out, John says, “We have a lot to cover today, so we better get started. As we go through this today, think about building a proposal as compared to building a construction project. Now let’s review…

First, we started with WHY…

Why do you do what you do? Why should you do proposals? Both these questions are similar to the question we should ask customers when they’re considering a construction project. Why do you want to do this project?

Second, we discussed that communication is the contractor’s responsibility.

We are the professionals in this arrangement. We shouldn’t expect the customer to know everything about construction. This is why they are looking to hire someone to do their project. It’s up to us as contractors to communicate clearly.

Third, we discussed bid mistakes. 

These mistakes are commonly made and are costly. Being aware of them ahead of time helps you know what to avoid and increases the opportunity for happy customers. Not to mention it gives you a big advantage over your competition.  

In our meeting two weeks ago I gave you the proposal overview to take and review. Today we’ll go through it and break it down. I know it seems like we’ll never get to actually doing a proposal, but think about it like a construction project…

The designing and planning take as long as the construction.

Let’s start by looking at the documents included in the system and a brief description of each.”

Bid sheet – A Word document with the various construction categories and individual tasks listed with space for filling in the scope of the work to be done, dimensions, materials, locations, etc., for each category as needed for clear communication.

Worksheet – An Excel spreadsheet with all the construction categories and individual tasks listed with overhead and profit markup formulas.

Proposal – A Word document with space to fill in pertinent information, i.e. customer’s information, what will or will not be supplied by the contractor, the scope of work, the proposed price for each specific element, a total project price, payment arrangements, and project duration.

Data Base – An Excel spreadsheet with prices for material and labor for a wide variety of specific construction tasks. This information will be used in the worksheet template.

After reviewing and discussing these documents and definitions, they looked at the process of doing a proposal.

STEP 1 – Gathering Information

Gathering the right information correctly and effectively is critical to preparing an accurate and thorough proposal. Once you’ve been contacted by a potential customer, start by scheduling a meeting to discuss their project and find out what they hope to accomplish. At this initial meeting gather –

            Measurements and dimensions, existing and new

            Building materials, existing and new

            Pictures of pertinent areas and existing construction

            Customer’s design ideas and finishes

The information gathered at this meeting can be recorded in whatever way works best for you. The important thing in this step is to gather any and all information needed to prepare an accurate proposal. It can be handwritten on a printed out Bid Sheet template, or it can be entered directly to a Bid Sheet on a tablet, smart phone, or laptop. Using the Bid Sheet minimizes overlooking things because the different areas of a construction project are already listed.

STEP 2 – Preparing the Scope of Work

After the preliminary information has been gathered it’s time to clarify the scope of the project by writing out the description of each specific task in terminology that both the customer and the contractor understand. It needs to include enough specifics to be thorough without being too technical. It doesn’t help communication if the terminology is confusing to the customer. This written description on the Bid Sheet will be transferred to the Proposal and serve as a written scope of work to be performed and materials to be provided.

STEP 3 – Pricing the Project

Next is putting prices to the project. This process involves two different Excel spreadsheets, the Worksheet and Data Base. Based on the descriptions written on the Bid Sheet, content from the Data Base will be copied and pasted into the correlating cells on the Worksheet. After the pertinent information from the Data Base has been placed on the Worksheet, it’s time to fill in the quantities.

STEP 4 – Quantities

On the Worksheet you will fill in the quantity needed to do the work on that line item. This may be lineal feet, square feet, square yards, cubic feet, cubic yards, numbers of pieces, etc. Once this is completed you will now have prices for each of the different tasks listed on the Proposal.

STEP 5 – Preparing the Proposal

Now you have everything you need to complete the Proposal. You will take the descriptions from the Bid Sheet and the prices from the Worksheet and put them both on the Proposal. After filling out the customer’s information at the top of the page, the scope of work, the price for each task, the total project price, how payments are to be made, and the duration of time to do the project, the Proposal is ready to be presented to the customer.

As they wrapped up the meeting, John looked at Gene and asked him what he thought so far. Gene said, “I had no idea there was this much to doing proposals.”

John said, “I know. That’s why most contractors either guess at their bids or just give estimates…and we’ve all seen how that well that works out.

Next week we’ll dig deeper into GATHERING INFORMATION.

If you’d like more information about the proposal system referred to in this blog post, you can check it out here. You can learn more about some of the other tools for building a successful construction business here. If you have any questions, schedule a free 30-minute construction company consultation.

Previous posts in this series:

What is “business clarity” and how do you find it? (12/24/23)

What Does it Take to Build a Successful Construction Company (12/31/23)

It’s Time for the First Meeting (1/14/24)

Being Aware of Bid Mistakes is the Best Way to Avoid Them (1/21/24)


What is “Business Clarity” and How Do You Find It?

You Start with a Plan

Once again, Gene was alone at the office late on a Saturday night working to get at least one more proposal done, before going home. He had promised four different customers their proposals this week. If all goes well, he’ll have this second one finished before midnight.

As Gene crunched numbers hoping he hadn’t forgotten anything, he asked himself, “Why am I doing this? I could go to work for somebody else, make more money and work less hours. This sure isn’t how I pictured it five years ago when I started the company.”

“I had no idea that running my own business would be this hard!”

Gene rubbed his eyes and stretched his back and thought, “I must be doing something wrong. When I was working for John at SMR Construction things looked easy. I wonder what he was doing different.”

It’s Saturday, and Gene has been working like crazy all week long. Between production crews not showing up, materials not being delivered on time, cost overruns and computer issues…projects were behind schedule and the company was losing money. Even if he works tomorrow, he’s going to have to disappoint at least one of the customers waiting on a proposal.

“How am I ever going to turn this around?”

When Gene finishes the proposal and looks at the clock, it’s 12:40. It’s already Sunday and he still needs to proofread it, print it and sign it. Something has got to change! “I’ve been leaving home early and getting home late all week. I haven’t even spoken with my wife for days. I’m calling John on Monday to see how he did things.”

First thing Monday morning Gene called John. After a few minutes of catching up, Gene asked John the question that he couldn’t quit thinking about. “John, I’ve been working day and night trying to keep up. When I worked for you it seemed like you had everything figured out. You weren’t stressed even when things didn’t work out as planned. Your customers understood what to expect with their projects and were happy when they were finished. What am I doing wrong?”

That’s the question that almost every business owner asks themselves.

“Know this,” John said, “When I started my business, I was just like you. I struggled to keep up, worked too many hours, neglected my family, was mad at myself for letting down my customers, my family, and myself. I kept asking myself that same question. What am I doing wrong?”

“By the time you were working for me, I had figured some things out. It’s amazing what you can learn when attending the ‘school of hard knocks’. Keep in mind this is the most common process for learning but isn’t the most effective.”

“What really turned my business around was when I found out about Solution Building’s, Blueprint for Building a Better Business.”

Think about how much easier and better a construction project goes when you have a plan. The same thing is true for a business. A plan gives you direction, keeps everyone involved working together, and improves the odds for a successful outcome.

“Gene, if this is something you would be interested in, I would recommend starting with the, ‘Blueprint for Building a Better Proposal’. This is the most important and most neglected part of construction communication. If you’d like I would be happy to meet with you and go through the process and answer any questions.”

“There’s a lot more to the ‘Blueprint for Building a Better Business’, but starting out, you should focus on the proposal system. After you get this part implemented, we can discuss which part of the business blueprint system would be best for you, next.”

After talking with John, Gene thought, “I’m sure glad I made this call. For the first time in a long time, I feel like there might be a light at the end of the tunnel that isn’t an oncoming train.”

If you struggle trying to keep up with operating a construction business or know someone who does, we are going to be having a free 90-minute workshop for Building a Better Proposal on Saturday, January 6, 2024, at 10:30 CST. Register for the workshop here.

If you have any questions about the workshop or business systems, you can schedule a free 30-minute construction company consultation here.

It’s Important for You to Have the Right Tool for the Job

And There’s More to the Right Tool Than You Might Think

For those of you that remember the TV sitcom “Home Improvement” you’ll remember Tim ‘the Tool Man’s’ Taylor’s attempts to give “more power” to everything from cars to household appliances and the infamous ‘grunts’ that accompanied this.

Guys love tools. There’s something primal in getting a new tool and learning to use it.

You’ve heard it said, “The way to a man’s heart is through his stomach”. I agree this works pretty well. However, I would argue that an even better way is…give him a new power tool.

There is a tool out there for every job, usually more than one. As cool as they all are, they’re worthless if you don’t have them and don’t use them.

The biggest “tool” problem is…the lack of “business BUILDing tools”.

Most “construction guys” would prefer to use a circular saw or screw gun rather than a computer. Paperwork most likely isn’t what they think of when considering tools.

One of the most important tools in the “construction toolbox” is paperwork.

Profitability and the success of the company hinges on the accuracy and knowledge of income and expenses. It requires having the right tools, knowing how to use them, and then actually doing so. 

Some of the tools needed for BUILDing successful construction businesses are sales tools like construction proposals and contracts. Production tools like change orders and payment applications. Financial tools like job tracking, job profit/loss and savings account transfers.

When I started my construction company, I had no tools for BUILDing a business. Like most construction companies, I just guessed. After looking for business BUILDing tools and not finding what I needed…I developed systems that took the guess work out of running a construction company. I’ve been using and refining these tools for more than 35 years.

You can have these same tools by purchasing the Business BUILDing Toolbox (complete with templates, instructions, and examples of the tools). This way you can stop rolling the dice with your profits and take control of your money and your business.

Too often construction companies see the benefits of having tools and systems for their business but aren’t willing to spend the time or money. They can’t see the value. These same people wouldn’t think twice about spending hundreds or thousands of dollars to buy cordless tool kits or pneumatic nail guns and compressors, not to mention the price of things like skid loaders!

The real question is value…not price.

When considering tools, you should consider the return on your investment. Those power tools that you purchase are going to wear out over time and need to be replaced. The Business BUILDing Tools won’t. You can get the whole toolbox for less than the price of a good quality cordless tool kit and the return on that investment is priceless.

Having the right tools, knowing how to use them, and then actually doing so can be the difference of having a successful company or giving up and going out of business.

You’ve never been afraid of getting a new power tool and learning how to use it. Don’t be afraid of Business BUILDing Tools either.

You can learn more about these tools here or feel free to schedule a free 30-minute construction company consultation.

We are going to be starting a half price Holiday Special on Black Friday (Nov. 24th) with the toolbox price increasing $25 each week through the end of the year. So, be ready to grab your toolbox full of Business BUILDing tools at the sale price before it’s too late. Also, feel free to share this holiday offer with any construction companies that you think could benefit so they can take advantage of the reduced price!

Why Choose Trick over Treat…Isn’t Treat the Better Choice?

You Would Think So, But Construction Companies Do It All The Time

Halloween is almost here. Most of us have done trick or treating as kids. You know, that tradition where children dress up in costumes and go from house to house asking for treats with the phrase “trick or treat”.

The “treat” is usually some form of candy/sweets, although it might be some other small gift. The “trick” refers to a threat, usually an idle one, to perform mischief on the resident(s) or their property if no treat is given. 

Sure, there’s some cost to buying the candy and it requires some time to answer the door and pass out candy, but given the choice…

As a property owner…a treat seems like the better choice.

If the treat is the better choice, why do construction companies continually insist on tricks?

I’ve written a lot about construction companies being scared to do things differently. They’re stuck in the rut of “we’ve always done it this way”. Trying to build your dream business this way is like being in a horror movie.

Everything is predictable. Rather than doing something different, they hide in the basement, the attic or behind the chainsaws, when they could just get in the running car.

Hiding behind chainsaws is what most construction companies do. They choose the discomfort of the known trick, over the uncertain treat.

I don’t think these companies started out hoping to have unhappy customers, or not have enough money to pay the bills, or to be working 70-80 hours a week for minimum wage.

The reason most construction businesses are stuck here is fear. They are afraid that trying something different might not work. They choose the discomfort of the known over the unknown.

It doesn’t have to be this way!

This is why over 30 years ago I decided that I wasn’t going to hide behind the chainsaws anymore and I got in the running car (okay, really it was truck).

Did everything I try work…no. Was it scary…yes. But I didn’t stop, I kept trying until it did. Then I worked on it some more to make it better. And then I started working on a new and different business tool or system.

This is where I figured out the 5-step business BUILDing process. I BECAME AWARE that what I was doing wasn’t working. Then as I researched, I began to UNDERSTAND the problems. Next, I compiled INFORMATION about what was needed and began IMPLEMENTING new tools and systems into my business. The more I used these tools, the more I LEARNED and the easier it became. This process led to BUILDing my DREAM business.

The great thing is, YOU don’t have to go through the long, hard, and scary process to build your dream construction business by yourself.

You can get the tools and systems that we use by going to the Business BUILDing Toolbox and get started quicker, and it’s less scary. If you would like to learn more about these tools and systems, check out the 5-step Business BUILDING Process. To learn more about how these business tools and systems can help you build your dream business, schedule a free 30-minute consultation.

Set yourself apart from your competition by choosing the treat over the trick.

Why is it so Hard for Construction Companies to Stay in Business?

It’s Really Not That Hard…It Just Requires a Change of Perspective

It’s crazy the number of business that start and fail. Millions of businesses get started each year, but only a small portion survive. Why is it that 90% of all businesses fail? An article by Luisa Zhou is full of research-backed business failure statistics.

  • 18.4% fail within the first year
  • 49.7% fail within the first 5 years
  • 65.6% fail within the first 10 years
  • Only 25% make it beyond 15 years

There are countless reasons that businesses fail, but just because other businesses fail, doesn’t mean yours will too. Being aware of and understanding these statistics increases your chance of survival.

You can’t succeed if you don’t try.

If your dream is to own a successful construction business, you need to do your homework and then commit to it. Construction businesses do have a high failure rate, but that’s not to say you should avoid the construction business.

It just means you need to be aware and get prepared.

Listed below are five small business types with notoriously high failure rates.

  1. Restaurants – Independent restaurants have a failure rate of over 60% at the 10-year mark. The key to success is the ability to raise capital when needed. If a business owner cannot do that, there’s not much left but to close the doors.
  • Retail stores – Another business with intense competition is retail stores. Not only do you have to contend with other brick-and-mortar stores, but you also have online businesses undercutting your prices. Like independently owned restaurants, retail stores have a failure rate of over 60% at the 10-year mark.
  • Direct sales – Yes, it’s your own business, but if a friend asks you to become part of a multi-level marketing (MLM) business, say no. What you’ll hear are success stories. You won’t hear that, like a pyramid scheme, 99% of direct sales reps suffer significant financial loss. It’s the people at the top and the person who recruits you who makes money. 
  • Construction – Starting your own construction business is a tough gig. Construction businesses also have a failure rate north of 60% at the 10-year mark.

Not only do you have to be good at your craft, but you have to become a full-time salesperson, accountant, administrator, bookkeeper, and part-time counselor.

If you have a passion for building and offering unique touches that buyers can’t get from another builder, you’re off to a good start. The thing that’s usually missing is a business plan and the right business tools.

  • Insurance sales – Insurance agents face the same challenges of construction…wearing too many hats. They must be a master of administrative work, sales, and an ever-changing insurance scene.

If you’ve been in construction for any length of time, or know someone who has, you’ve become aware of how hard it can be to operate a successful construction company. Understanding the things that are needed to achieve this is one of the BUILDing blocks in a solid business foundation.

NOW WHAT? Now you need to change your perspective.

Perspective is a particular way of looking at something. This doesn’t mean it’s right or the only way. It just means that it’s our perspective.

Rather than assuming you’re the only one in construction dealing with issues you need to understand that this is not the case. These struggles are common across the construction industry. But changing your perspective is just the beginning.

Real change requires action. You’re going to have to do something.

So, what is the something that you need to do?

You need to lay the next block to BUILD the foundation of your business. This block is INFORMATION, INSTRUCTION, and IMPLEMENTATION. This is the third block in our 5-step Business BUILDing Process. Check back next week, and we’ll take a hammer to this building block to see what it’s made of.

It can be really frustrating trying to figure out how to build a successful construction business. But you don’t have to do it by yourself.

After owning and operating a construction business for more than forty years, I’ve developed business tools and systems that we are now making available to construction companies to give you an advantage over the competition.

If you would like to learn more about BUILDing a successful construction business, you can schedule a free 30-minute consultation here.

What is it About TOOLS That Building Contractors Love So Much?

Wielding a Power Tool Gives Us a Sense of Control and Respect

Last week we discussed how to build the construction company of your dreams with a plan and the right tools. We talked about how scary it is to step out of your comfort zone and try something new. We also discussed how this plodding back and forth can get us stuck in a rut.

You need some powerful business building tools to help you get out of your rut.

The feeling of that power in our hands is amazing. We are in control, but the machine can never be tamed. We have to respect it, or we will regret it. We pretend to be in charge of the “power tool beast”, but we know better.

Power and control

  • Power tools have the power to create. When the power tools come out, we have no idea what is about to happen. Every time we connect with that much electricity, a child-like excitement oozes from our pores.
  • Power tools have an untamed spirit that screams: “Anything can happen.” Turning on a generator makes you feel like you are The Generator. For a few minutes, you’re off the grid and in-charge. You have the power and can decide who you will bestow it upon.
  • Power tools let us pretend that we can do anything. Don’t fool yourself, your power tool is in charge! Just look at the sticker on your SAWZALL: “Warning this device is powerful and is capable of doing serious harm to your home, your person, or your entire way of life.

Meditate on the raw power, the Amps and the Volts. Be in awe and imagine where your power tools may take you.

This fascination with tools is very similar to the reason most guys would take almost any ridiculous “man challenge” for the promise of a gold sticker on their forehead and “buddy cred”.

“Hey, I bet you can’t crush that can with your head!” Sound familiar?

Hopefully, most of us are smarter than this.

As builders we love the rush we get from building something. That sense of accomplishment that comes from creating a dream home out of that stack of boards. Tools give us the power and control to do this.

A tool that is even more powerful than the biggest, meanest chop saw is the Blueprint for Building a Better Proposal.

I know it doesn’t make as much noise or make your arm numb after using it all afternoon, but it’s a tool that will allow you to build your business into a skyscraper of success.

The hardest thing you will ever build is a business. The tools used for this kind of building are different than what we normally think of when thinking tools.

During my forty plus years of building my business, I’ve continually worked to achieve and maintain a sense of control over my profit and build the successful company of my dreams.

Just like any other building project, it’s important to have tools and know which ones to use in specific applications. You wouldn’t use a cordless screw gun to saw a board, or a reciprocating saw to nail down a shingle.

You can saw a board with a hand saw or you can use a circular saw. We both know which is faster, easier, and makes more sense.

The same thing is true when building a business…you need to have the right tools.

Why is it that we builders are so stubborn when it comes to trying something new and different. Business building power tools sound too good to be true.

You can use the old school “guesstimation” method or you could use the new and improved Building a Better Proposal power tool.

It’s important to have the right tools for the job.

Maybe you uncover some termite damage, or your customer decides after the project has started that they would like to do some additional work.

These kinds of things happen on construction projects quite often. This presents you with the option of moving forward without giving your customer a price or preparing a change order.

I know it’s another one of those uncomfortable “get out of the rut” kind of situations.

What if there was a power tool for preparing a change order…oh that’s right, there is! It’s called Building a Better Change Order.

These are just two of the power tools that will be available for you in the digital Business BUILDing Toolbox. We plan to have these tools and more available later this month.

If you or someone you know would like to feel the power of a tool that provides control for building a successful construction business, while respecting that power without regret…stay tuned for updates on when we open the lid on the Business BUILDing Toolbox.

If you have questions about how these business building power tools could help you build the business of your dreams, you can schedule a free 30-minute consultation here.

Having a Plan for Building Something isn’t Any Good if You Don’t Use it

The Bible is a Blueprint for Building Our Best Life

We live in a world of idea bombardment, and it’s hard to sort through it all to know what is real. We see things on the news, social media, the internet, and TV programs. We hear things from our family, friends, neighbors, and community. So many different opinions.

The world thrives on conflict.

How can we determine what is real and what’s not, what’s right and what’s wrong? This is a subjective question that can be hard to answer. Who do you believe and why?

Just like building a structure can be done in a variety of different ways…so can your life. Ultimately some things work, and some things don’t. A house without a roof is going to get wet inside when it rains. A house without a foundation is not going to stay standing when the ground erodes.

A house built on a solid foundation will weather the storm.

Back to the question of how can we know how to build our best lives? Just like building a good building, we need a plan…a blueprint. Just like how a building project doesn’t go well when the blueprint is ignored, so it is with our lives and ignoring the Bible.

The Bible is our blueprint for building our best life.

Using a blueprint requires some work. Just because you have a blueprint in your office doesn’t mean it’s going to help you if you don’t get it out and use it. This doesn’t mean that unrolling it and flipping through the pages is enough…it’s not. You need to study it, learn it, and implement it or the building will not turn out well.

The same is true for life. If we don’t get the Bible off the shelf and study it, learn it, and implement it, our lives won’t turn out well.

A good builder doesn’t just look at the blueprint once and then put it away. There are questions and problems that come up constantly throughout the project. He uses it every day until the project is finished. The more he studies it, the more he knows about what is expected.

We should use the Bible in the same way. We should study it daily so that we know what is expected.

Another problem that can happen with blueprints is when a builder doesn’t fully understand or misinterprets the blueprint. Just looking at the foundation plan doesn’t tell us about the roof. Just looking at one page of the print will lead to mistakes in the construction as well as subcontractors being led to do the wrong things. This is why it’s important to ask questions and discuss it with the architect and other builders.

This happens with the Bible as well. We can’t just pick and choose a verse here or there and not know the whole plan.

You need to take the whole Bible into account so that you don’t make a mistake when building or lead others to.

Blueprints let us see what the architect expects from the builder. He shares all the different aspects of a building and how they should fit together. A builder who has built buildings before can begin to think he knows how to build and doesn’t need a blueprint. Inevitably this is when mistakes happen and can be very costly.

God is the architect of our lives and when we begin to think we know more than Him problems are sure to happen.

A builder must decide if he’s going to trust the architect’s plans or not. He can ignore them and build the building however he wants. The problem is…the building doesn’t belong to him, and if it’s built wrong, he won’t get paid.

The same is true for us. We have free will, and we can live our lives however we want.

The problem is, in the end, the payment we receive will be what we earned.

Use the Bible as your life blueprint. Get it off the shelf, study it, learn it, ask questions, and build your best life.

This past Sunday, Jim Miller shared the message to “Just Tell Them the Truth”. Here is a list of Scriptures that he used throughout his message.

  • Matthew 6:33
  • 2 Corinthians 11:2-3
  • Ephesians 4: 14-15
  • Colossians 2:8
  • 2 Timothy 4:1-4
  • Hebrews 2:1
  • Revelation 2:4-5
  • Revelation 3:3
  • Romans 3:23
  • Romans 6:23
  • Romans 5:8
  • Romans 10:13
  • Romans 10:9
  • Romans 12:1-2

How Building Your Business Is Critical to The Success of Your Business

Like the Construction of a Building – You Need a Plan for Your Company

If you own your own business and aren’t being intentional about the organizational operation of your company, it is likely that you won’t make it past your 5th year. This is according to the Bureau of Labor Statistics.

Just think about the number of businesses that you have seen come and go.

Whether you are a solopreneur or have a team. It doesn’t matter if you have been in business for 30 years or just starting out. Regardless of the kind of work you do, the organizational plan is just as important as the work you do…maybe more.

I know in my 40 years of being in business I have learned some lessons the hard way. Let me tell you, the tuition for ‘The School of Hard Knocks’ (SHK) is expensive. There were times when I got behind on taxes to pay bills and other times when I got behind on bills so that I could pay taxes. Neither of these is a very good business plan.

One of my SHK professors once told me, “That when you steal from Peter to pay Paul, you make Peter a Paul bearer”. If you want to avoid the need for a pallbearer for your business…you need a plan.

Starting a business without a plan is not a very good plan.

Often, someone who has learned a trade or a craft decides, for whatever reason, to go into business on their own. Most of the time they have given little, if any, thought to business structure.

You show up every day working hard and then…surprise, you owe some taxes and don’t have the money to pay them. You needed a plan…a Blueprint for Building a Better Business.

There are a lot of similarities in constructing a sound building and constructing a profitable business.

  • Both need to start with design plans – The thing that gives you a clear direction of what you want the outcome to be.
  • Both need an architect – The person that can see the vision of what the finished product will be.
  • Both need a good solid foundation – The thing that will support you when the storms come.
  • Both need a good framework – The thing that holds everything together.
  • Both need a builder – The person that reads and understands the plans and puts all the different pieces together correctly.
  • Both need the proper tools – These are what allow the pieces to be shaped and fastened together in the right places in the right order.
  • Both need a good team – These are the different people with the different skills and knowledge needed.

It doesn’t matter if you have been in business for years or are just starting, YOU NEED A PLAN. If you would like to minimize the time you spend attending ‘The School of Hard Knocks’, then keep following our blog. We are working on some Business Building Solutions for just this purpose.

In what areas of building your business would some ‘higher education’ be helpful?

Originally posted 2/24/18.

How Our Payment Application Tool Works to Help Build a Better Business

This is One of the Most Important Tools in the Construction Business Toolbox

Last week we talked about how construction companies struggle with cash flow and how not knowing what to expect can be very damaging to the business.

Communication between construction companies and customers is one of the biggest problems in the construction industry. The Payment Application is a business tool used for tracking project progress payments. It’s a way to communicate the financial expectations to the customer…and it’s only fair to let them know what to expect, when they’re the ones writing the check.

Construction customers don’t like surprises.

Our Payment Application is an Excel spreadsheet that lets the customer see the numbers before the project starts, continuing all the way through to the end…and this prevents them from being surprised at the end of a project with a bigger than expected bill.

The Payment Application is a document used to show the customer the price of a construction project broken down by item. It tracks the breakdown of payments being made, what has been paid up to this point in the project and what remains to be paid. This document is given to the customer with each invoice so they can see what they are being billed for on the accompanying invoice.

Starting with a blank payment application –

Step 1 – Filling out the project information – This process includes filling out the project information box with the customer’s name, the project name, and the project address. Next fill out the application information box with the application number, application date, project number, and the date the contract was signed. With each new payment application, the application number and date will be revised.

Step 2 – Filling out the scope of work information and value – This information will come from the signed proposal and will be entered in the first three columns on the left side of the spreadsheet. Using the proposal, take the number of the first item and enter it into the first cell on the column titled Item #. Next, write a brief description of the work described on the proposal in the column titled Description of Work. Finally take the dollar amount for this item on the proposal and enter it in the third column titled Scheduled Value. Once this is done you will repeat these three steps, one row at a time, as you go down the spreadsheet until you have all the information from the proposal entered on the payment application.

Step 3 – Confirm the dollar amounts – After all the values are entered, the total at the bottom of the Schedule Value column should match the total price of project on the proposal. If it doesn’t review the numbers in the Scheduled Value column until you find the mistake and correct it.

Now you are ready to use the Payment Application to accompany invoices. This will let the customer see what they are paying for. Seeing a large dollar amount broken down into smaller ones helps the customer understand what it is they are paying for.

It is a good idea to invoice for a percentage of a project prior to starting. This shows the customer’s commitment to the project and helps cover the contractor’s expenses on the project if something were to happen that puts the project on hold or stops it all together.

Entering the payment prior to starting in the application –

Step 1 – Determine the dollar amount for each item – Based on the predetermined percentage of the project prior to starting you will need to get the percentage of material and labor for each item. This information will come from the Worksheet used in the bidding process.

Step 2 – Enter the dollar amounts – The 4th and 5th columns of the Payment Application is where this information will go. These columns are the Work Completed columns. The 4th is material ordered, stored or used. The 5th is work done. Starting with the first row you will go down the sheet entering the percentage amounts in the corresponding column.

Step 3 – Confirm the dollar amounts – This step is the same as step 3 in the initial filling out of the form. It is to confirm that the dollar amount of the two columns added together matches the dollar amount given to the customer as the payment prior to starting.

Step 4 – Confirming percentage – Column H is a formula that is automatically calculated and shows the percentage this payment is of the total amount for each item. Once again you want to confirm this percentage matches the information given to the customer in the proposal.

We’re going to stop here today.

Next week we’ll get the Payment Application ready for the next progress payment.

This may seem like a lot of work, but it isn’t nearly as bad as it appears on the surface, and the benefits of communicating clearly with a Payment Application are well worth it.

The Payment Application is one of the best communication tools in the Business BUILDing Toolbox.

It’s Christmas Time and This Is the Most Wonderful Time for Giving

However, Proposal Systems are Not What We Normally Think of When We Think About Giving

Giving is an interesting word. For such a small and simple word, I had no idea how complex it was. In the Meriam-Webster dictionary there are sixteen different definitions with several sub-definitions for the word give. This is just as a verb, plus there are additional ones for uses of nouns, etc.

Just like the large number of definitions for the word give, there are a lot of great ways of giving.

One way of giving is the traditional wrapped presents under the Christmas Tree. And who doesn’t look forward to getting together with the people we love and sharing in the excitement of unwrapping that unknown gift?

Another great way of giving is sharing our knowledge and experience.

In my forty years in the construction industry, I learned some things. 😊 After struggling trying to figure out how to do accurate proposals, communicate clearly with customers and prepare a production budget, I knew there had to be a better way.

While a lot of construction companies are great at “constructing”, they often struggle with the business side of things. There’s a lot more to owning and operating a construction company than just building.

Unexpected costs, changes to projects and poor communication plague the construction industry.

It doesn’t have to be this way.

That’s why I developed the Blueprint for Building a Better Proposal system. This proposal system will give you the documents and instructions needed for preparing proposals that communicate clearly and accurately with the customer, while allowing you to be profitable.

This system includes templates for:

            Bid sheet – A Word document with all the construction sections and individual items already listed out with space for filling out the scope of the work to be done, dimensions, materials, locations, etc.

            Worksheet – An Excel spreadsheet with all the construction sections and individual items already listed out with optional overhead and profit markups already inserted in the appropriate cells.

            Estimate – A word document with spaces to fill in the pertinent information, i.e. customer’s information, what will or will not be supplied by the contractor, the scope of work, the estimated price for each specific element and a total estimated price.

            Proposal – A word document with spaces to fill in the pertinent information, i.e. customer’s information, what will or will not be supplied by the contractor, the scope of work, the proposed price for each specific element, a total project price, payment arrangements and project duration.

            Contract – A word document with spaces to fill in the pertinent information, i.e. customer’s information, list of referenced documents, construction funding information, property specifics, project start date and legal terms and conditions.

            Proposal-Contract – A word document that is a combination of a proposal and contract in one.

It also includes:

            Data Base – An Excel spreadsheet with prices for material and labor for a wide variety of specific construction tasks. This information can be copied and pasted to the worksheet.

            Instructions – Complete and comprehensive instructions for how to use this system and put it to work.

            Example documents – Complete Bid Sheet, Worksheet, and Proposal for a hypothetical construction project.

Back to the spirit of giving –

I want to give of my experience and knowledge because I want to see more successful construction contractors and more happy construction customers.

So, this Christmas we’re giving by reducing the $497 price of our Blueprint for Building a Better Proposal system by 80%.

The Christmas price is only $97!

This reduced price will allow contractors to give clearer more accurate proposals to their customers.

If you know someone in the construction industry that you think would like the chance to save $400 on this proposal system…give them the link to the Blueprint for Building a Better Proposal or give them the link to this blog post.

We also have a free document you can download called the 7 Bid Mistakes. It will walk you through the common mistakes that cost contractors a fortune and how to avoid them. And because it’s free…we’re giving it too.