Search

communication

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

by

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.

There’s a Good Reason We’ve Been Give Two Ears and One Mouth

by

It’s Because Good Communication Takes Twice as Much Listening as Talking

Miscommunication happens too often but doesn’t have to if we weren’t so quick to jump to conclusions.

Our Pastor told a story about visiting a lady in the hospital who had had a stroke and was unable to speak. She kept pointing at something, but he was having trouble understanding. She was getting frustrated and kept pointing. He kept turning around and going to different things trying to figure out what she was pointing at.

This went on for a while until he realized that she was pointing at him…his zipper was down.

Then they both had a good laugh.

Even in the middle of this difficult situation they were able to share a good laugh.

There are more than 7000 different languages around the world. The one word that is most universally understood among all of those different languages is the word “huh?”.

This is what Pastor Lee kept asking the lady in the hospital.

Not asking enough questions and listening, really listening, to the answers is where communication begins to break down. We presume we know what the other person is going to say before they even open their mouth.

I believe this is why God gave us two ears and one mouth. We need to listen twice as much as we talk if we’re going to understand others.

In Acts 2:1-21, Jesus’ followers were all together when a noise like a mighty wind came from heaven. The Holy Spirit took control of everyone, and they began speaking in whatever language the Spirt led them.

There were many different people from different countries in Jerusalem at that time. When they heard this commotion, a crowd began to gather, and they were surprised because they were all hearing everything in their own language.

Communication can be hard, but it doesn’t have to be if we are just willing to listen.

The Holy Spirit can help us communicate better, but we must be open and accept the help. The Holy Spirit will help us to see clearer, understand better, and give us ideas for sharing God’s love (Acts 2:17).

13-year-old Abraham Olagbegi needed a bone marrow transplant due to a rare blood disorder. He decided to use the Make-A Wish gift he received to help others rather than getting a gaming console or taking a trip somewhere. He wanted to use it to help feed the homeless.

Abraham’s Table planned to provide meals once a month for a year to homeless people in Jackson, Mississippi. Abraham’s mom always says, “It’s a blessing to be a blessing.” This was a big undertaking for a 13-year-old but, the Holy Spirit gives us thoughts and ideas that God wants us to do. It’s up to us to do it.

When you come up against a big mountain, you need to remember you have a big God.

Listen to the Holy Spirit. Listen to others. Ask questions. Communicate clearly through your words and your actions.

What’s Needed for a Good Construction Contractor is Simple

by

I Said It Was Simple…I Didn’t Say it Was Easy

Over the past couple of weeks, I’ve written about the difficulty in finding good, qualified construction contractors and how this problem is amplified after a disaster such as a hurricane, tornado, flooding, etc.

Finding a good construction contractor is a huge problem and has been around for a long time. I’ve thought about this off and on for years and recently has been one of those “on times”.

Why is this a problem and what do we do about it?

As I’ve been thinking about it, I’ve concluded, that even though it’s a big problem, the solution is simple…but hard.

The key to this solution is…

Treat others the way you would want to be treated.

Granted, different people have different ways they want to be treated, because each of us is different. Add to that, the long-term acceptance of “this is just the way it is” and it becomes more difficult than ever to solve the problem.

To clarify how we should treat others, we should use God as a measuring stick. Do your work with all your heart, as if you are working for God, not for men. Colossians 3:23

Working as if for God is the opposite of how the world operates.

As I was speaking with a customer just last night, they were telling me how they had been trying to find someone to do their project for years.

They had contacted several contractors who said they would come by and look at the project and never did.

They met with some who did show up only to never be heard from again.

With one contractor they got as far as getting a price but then they could never get him to come do the work.

Equally as bad is when a contractor does agree to do the work, but the customer never knows if or when they’re going to show up and then the  job drags out and out and out.

This is an unacceptable way to treat God or anyone else.

The first and most important thing a good construction contractor needs is…COMMUNICATION.

Communication is more than just talking. It includes:

  • Listening to find out what the customer wants.  
  • Clearly explaining the work to be done, what it’s going to cost and when it will be done.
  • Transparency and honesty. Letting the customer know what to expect and when.
  • Willingness to be vulnerable. If you can’t be there when you said you would…let them know.

I plan to unpack what’s needed from a good construction contractor more over the next few weeks.

Poor Communication is the Number One Reason for Disagreements

by

Avoid Disagreements by Going the Extra Mile to Achieve Clarity

As I stepped out of my comfort zone this week and prepared the proposal for VB Homes’ “construction proposal system”, I was reminded of the importance of communication.

As I worked on this proposal, I considered reasons for them needing this system and it reminded me of the importance of good communication. The consequences of poor communication are huge.

An excerpt of a previous post from August 2016

Over the last few days, I was reminded of how important good communication is.

Two separate instances have come to my attention confirming this.

One situation is of a customer who had been given a price for a project and then after the project was started (concrete was poured) found out the price for the project was more than they were told. This caused some real problems for both sides.

The second was someone who had a project done with no written agreement. Once the project was almost completed there were some quality issues. This left both the customer and the contractor in a place where they felt cheated. The contractor billed for work done but wasn’t getting paid. The customer felt that the work was below standard and couldn’t get the contractor to come back and fix it.

As is usually the case there were extenuating circumstances in both situations and both sides had legitimate viewpoints.

Both projects would have had less problems had there been clearer communication from the beginning.

It has been my experience that there are differing opinions on how much detail should be included in the communication between customer and contractor. The bottom line is that it needs to be enough so that all parties involved know what to expect.

Rarely have I known small to midsized contractors to spend the time and effort to include very many details.

I understand, it takes time. The question we should ask is this…

Is it better to spend the time communicating before the project starts or wait until there’s a problem and everybody’s upset?

On the other side there is the possibility of too much information and the customer being confused and feeling lost (I know, it’s hard to believe that I just wrote that).

Often large commercial contracting firms and architects do this. I recently was aware of a commercial project that the communication was overly complicated. There were forty-one pages of drawings and a spec book over 1” thick and it wasn’t that big of a project.

With all that information the customer was overwhelmed and unclear about the project. Don’t get me wrong I like details and information. I think it is essential to good communication. The problem is that if it’s too complicated the customer still is uniformed and lost. This is still poor communication.

Ultimately proposals should be about helping customers know what to expect and get their dream project done.

I have lost count of the number of times that I’ve heard customers say that a building project was the worst experience they ever had. How sad is this?

They were excited and looking forward to having some new project done and then they are left with feelings of regret. I think there’s a balance between the two extremes.

This is where the real challenge is, finding the sweet spot for all involved.

There is a lot to consider when it comes to good communication, but the first thing is, ask questions and listen to the answers. As a contractor, don’t go into a project with your preconceived ideas of what the customer wants.

Find out what THEY want and HELP THEM BUILD IT.

Hopefully the proposal sent to VB Homes was clear and understandable and gives them a clear picture of what to expect.

Things Will Go Much Smoother When the Contractor Knows How to Speak Customer

by

The Importance of Learning a Foreign Language When Doing a Construction Project

It’s difficult to understand someone speaking a language you don’t know or understand. Imagine being in a country that speaks a different language and trying to explain something.

This is the same thing that happens with construction customers and contractors.

The contractor says something that the customer doesn’t understand. The customer doesn’t want to appear like they don’t understand so they just nod and go on. This is contractor language…

Most customers don’t speak contractor.

This disconnect can lead to misunderstandings. Misunderstandings can lead to hurt feelings and frustration. The hurt feelings lead to disagreements and impasses.

This is the biggest problem in the construction industry.

I’ve written about the importance of good communication multiple times. On more than one occasion I’ve been asked by customers to help them understand “contractor” they found themselves at an impasse with their contractor.

Every contractor, at some time, has had an unhappy customer. This is almost always due to poor communication and/or a lack of understanding. It may have been some small misunderstanding or might have been major enough to result in being fired or going to court.

Several years ago, a partner and I were meeting with a customer early in the process of building a new home. The customer pointed out that the distance from the electric meter to the house was more than the 50’ allowance, as per the written proposal.

He asked if this was a problem. My partner told him no, it wasn’t a problem. Guess what…

It was a problem.

The problem didn’t surface until later when the customer was billed for the additional 100’. After some research, the communication breakdown was uncovered.

The customer asked, “if it was a problem”. What he really was asking was…”is it going to cost more?”.  

My partner’s response in reality was, “it’s not a problem to dig the additional 100’, but it will cost you more”. This isn’t what was said.

Neither intended nor expected this to be a problem. It was a simple matter of misunderstanding…

A contractor not speaking customer and a customer not speaking contractor.

That was a small thing that was clarified and resolved.

Sometimes they turn into big legal battles than can result in catastrophic outcomes.

Once again, I’ve been called in as a translator. This time it’s by a person having a construction project done by a contractor who doesn’t speak “customer”. This situation is going to be expensive for all parties and involves attorneys.

Situations like this break my heart. I understand why they happen…but they don’t need to. As the professionals in these situations the communication responsibility is the contractors.

Contractors need to learn to speak customer.

This is the reason I developed my proposal system. It’s a way for contractors to speak customer.

If you know someone in the construction industry that would benefit from learning to speak “customer” share this link to the Blueprint for Building a Better Proposal with them.

What is Your Motivation for Being in the Construction Business?

by

Having the Wrong Motivations Gives the Rest of Us a Bad Name

I’ve written before about situations where I’ve been involved in resolving issues between contractors and customers where they’ve gotten crossways with each other.

How poor communication leaves both sides with unrealistic expectations and sometimes ends in legal battles.

Once again, I’ve been asked by a construction customer to help them with a construction disagreement. They just want to get their home and their life back.

They’re in the middle of a dispute with a construction company that has been dragging on for more than a year. Their home has been left unfinished, damaged from rain leaking in, poor quality work, etc.

Why is it that they find themselves on opposite sides of this battle?

I’ve always advocated that poor communication between contractor and customer is the biggest problem. However, as I’ve been working on the current situation, I think there might be another deeper level to this issue.

Communication is certainly a part of it, but maybe communication would be better if the underlying motivations of both parties were considered. A skilled communicator can convince you that what their saying is true, even if it isn’t.

I think this is the underlying problem. It’s a lack of trust. None of us want to be lied to. Last week I wrote about competition vs. cooperation and how we can have both and everybody wins. It comes down to who we are competing against and who we are cooperating with.

Our motivation is directly connected to our why.

Contractor – Why am I in the construction business? Is it to help the customer achieve their dream construction project or to just make a lot of money? Don’t get me wrong. To stay in business, you have to make a profit, but if that is more important to you than serving your customer, it leads to situations like the one I’m currently working on.

Customer – Why do I want to do this project? Is it to improve the value, make it more functional, reduce maintenance, or to impress the neighbors? It’s your project and any of these motivations is fine.

The important thing is that both parties involved know the motivations.

Sometimes the motivations are hidden and not discovered until problems begin. Sometimes motivations aren’t clear, even to oneself. Knowing what the motivations are and being true to those motivations is critical to minimizing these kinds of problems.

Discovering motivations requires asking questions.

It frustrates he heck out of me that these kinds of situations happen…and they don’t have to.

We need to raise the bar of construction industry standards.

Why My Blood Pressure Goes Up When I Receive Texts

by

Okay…Maybe It Doesn’t Really…But It Sure Feels Like It

My sense of dread when my phone vibrates with a text makes me apprehensive. This is at a lower level when getting phone calls, but still happens. Why? What about someone contacting me makes me feel anxious?

Some examples –

            Got a text just last night from my wife – Pictures of the chicken pen missing a side and of a chicken on the loose. (Yes, this is the same chicken pen I wrote about last week) This was not good. After some follow up, I found out that the dog had tore it up. One chicken was missing, one was out. I needed to go home and fix this so that the remaining ones had a place to roost. Had to stop what I was doing and deal with it.

            Got a text from a tenant late one evening – Water heater was spraying everywhere; carpet and clothes were soaked. Needed to get the water shut off and stop the leak. It was a 30-minute drive to the property. It was too late to get it fixed then. It was late and I had just got home from a long day. Had to figure out a plan.

            Got a text from a customer wanting to make changes – This was to work that had already been done as per agreement. This is going to upset the subcontractor because they were going to have to redo their work. This was going to cost them, me or both of us, time and money.

What’s causing this apprehension? …communication is a good thing…right.

I’ve been aware of this feeling for a while and thinking about it a lot recently, trying to figure out why. I’ve come to some conclusions that connect with who I am and my personality.

A few weeks ago, I wrote about going through the Enneagram in Business Made Simple. I haven’t finished it yet, but have determined my Enneagram type and my wings (the personality type on either side of my dominant type).

This has helped better understand why my blood pressure goes up when texts come in.

In the previous post I referred to the personality type that I thought I was…it’s conclusive…in the Enneagram, I’m a Perfectionist. For those of you that know me, this is a big surprise, right. 😊 Wings of the Perfectionist are the Peacemaker and Helper.

Traits of a Perfectionist –

  • Fair
  • Reliable
  • Feels obligated to fix errors
  • High integrity
  • Feels counted on
  • Feels responsible
  • High self-expectations
  • Wants everything to be orderly
  • Has a plan and needs to stick to it

Traits of a Peacemaker –

  • Want to avoid conflict
  • Put other’s priorities above their own
  • Like routines
  • Say yes too much

Traits of a Helper –

  • Caring
  • Supportive
  • Need to be needed
  • Focused on meeting other’s needs
  • Want to do it myself

Looking through the characteristics of these three personality types I’m beginning to see why I don’t like getting texts.

It’s going to mess up my plans.

More often than not, texts and calls are cries for help. Most people sending them know that I will do everything I can to help. This is my job after all. What they don’t usually know, is that I will provide this help even if it destroys my schedule.

So, now that I’m aware of this, it’s up to me to deal with it.

This means…

Changing my perspective from a negative, being bothered, messing up my plans attitude to a this is who I am and what I do. I find solutions! These texts and calls are opportunities.

Learn to say no. This is a combination of no’s before getting overwhelmed balanced with giving myself more value compared to others wanting their way.

This newfound awareness will allow me to intentionally change my perspective to see these texts in a positive light.

And who knows…it might lower my blood pressure.

(Stay tuned for the chicken pen update)

Honesty is the Best Policy When It Comes to Construction Communication

by

Construction Customers Deserve You Being Brutally Honest with Them

Honesty is something that is in short supply now days. It’s like we think if we say something long enough and loud enough it makes it the truth.

Being honest with people is especially difficult for amiable people with stable “Golden Retriever” characteristics, as per the DISC personality profile. (Take the personality test here) It doesn’t help that 40% of the population is this way. People with this personality just want to get along, they try to avoid confrontation at all costs.

I know this because this is a part of my personality. it’s hard to tell people things they don’t want to hear.

The honesty issue doubles when both the contractor and customer are “Golden Retrievers”. Both parties want to get along, and make assumptions based on their perspective, then are disappointed when things don’t go as expected.

In an effort to get along things get left unsaid.

As a customer you need to be willing to ask questions when you need to know something. Even with written proposals and contracts things are overlooked or misunderstood.

As a contractor you need to take time to go through the paperwork and explain things. Be willing to tell the customer the truth about what to expect through the process. This can be hard, especially when customers wants the project started today and finished tomorrow.

In this fast pace, want it now world, expectations are often unrealistic.

Setting realistic expectations reminds me of an old TV commercial. In this commercial there is a young couple and a “rough and rugged” building contractor in overalls setting at a table in a kitchen.  The contractor is explaining the construction process to them as he is writing.  

He tells them, “…when we get started, we will take out all of your cabinets and then be gone for a couple of weeks. When we come back, we’ll take out the patio door in the dining room and put plastic over the opening. It will be left that way for several days. During that time, it will leak in when it rains. Then when the countertop is installed…it will be wrong. We’ll have to order a new one and that will mean another 4 weeks wait.”

Then he slides the contract over to the couple as they look at each other in disbelief and he says, “But when we’re done, you’ll have the kitchen of your dreams and you’re going to want to kiss me smack dab on the lips.”

Then the tag line for the commercial was “Brutally Honest”. I think the commercial was for a cable company, but I’m not sure. As a contractor I certainly could identify with it though.

This was an exaggeration, of course, but there still is a level of reality in it. Construction projects by nature, with all the various parts, never go as smoothly as anyone would like.

There are going to be some bumps along the way in every construction project.

Construction customers deserve this kind of brutal honesty.

It’s hard to hear things that don’t align with the dream picture in our mind. It’s hard to tell people things that they don’t want to hear.

Setting realistic expectations upfront will reduce disappointment in the end.

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

by

Because It’s Critical to Clear Communication, Whether You’re the Contractor or the Customer.

Last week Gene explained to John 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 that you need)
  • 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 in to 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 this week’s meeting Gene asks John 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.”

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

Okay. Did you bring it with you? Asked Gene. “I did.” said John, “I’ve got it on my laptop.” Gene 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, of 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 is needed to be clear on what is or is not included as a 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 Gene tells John. “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?

Learning How to Get a Construction Project Started Out Right

It’s Time for the First Meeting

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

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

A Good Construction Proposal Starts by Asking the Right Questions

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

by

We’ve Discussed the Why, Now Let’s Work on the How

It’s Saturday and today will be John’s third meeting with Gene. Even though there’s been no change in John’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 opportunity to learn more.

It’s John’s turn to provide lunch and Gene’s in for a treat…John’s bringing chili-cheeseburgers and fries from the Burger Station. On the way to Gene’s office, the smell of those burgers is more than John can bear and he has a few fries on the drive.

As soon as John steps in the office door, Gene yells out from the conference room, “You brought Burger Station”. Over the years when John was working for Gene, the two of them frequented this fine establishment often.

As John gets lunch out, Gene says, “We have a lot to cover today, so we better get started. As we go through this today, consider the similarities of building a proposal with building a construction project. Now let’s review…

First, we started with WHY.

Why do you do what you do? Why do should you do proposals? Both of the questions are similar to the question that should be asked of a customer 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 the 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.  

The ones that are commonly made and are costly. Being aware of these mistakes 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 (link to 1st meeting post) I gave you the bid proposal overview to take and review. Today we’re going to go through it. I know it seems like were still not doing proposals. 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 definition 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 to fill out a blank worksheet template by copying and pasting.

After reviewing and discussing these documents and definitions they looked at the 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 using 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 present to the customer.

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

Gene 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.

Previous posts in this series –

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

Learning How to Get a Construction Project Started Out Right

It’s Time for the First Meeting

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