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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?

Lack of Quality, Honesty and Integrity

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The Remainder of the Construction Complaint List

 

 

This is the fourth and final post in this series of building solutions on how to avoid construction project nightmares. Previously I wrote about the most common reasons construction projects fall apart. The next two posts dealt with the high cost of poor communication and what contractor communication should include. This week we’ll focus on the character portion of the list.


We’ve all have had experiences where things didn’t turn out like we had envisioned. This is true in everything, especially construction. Lower standards have become accepted and normal.


The low bar of expectation has become the construction industry standard.


I believe this to be attributed mainly to the focus on price. We should be conscious of what things cost, but when it is the determining factor above everything else, something will give. Most likely that will be quality and service.

 


The second factor is that we’ve become a fast-paced drive-through people. We expect everything to be instantaneous. The cost for this lightning fast speed is the same as price…quality and service.


Raising the bar is simple really.


It starts with an awareness of how low the bar is. It has been moving down in small increments for years. It’s happened so slowly that most don’t even realize how low it is. Raising it up will be a slow process as well.


The remainder of the list of reasons construction projects fall apart is as follows:

 

  • Poor quality
  • Cluttered and unorganized job site
  • Left hanging part way through an unfinished project
  • Lack of scheduling or poor time management

 

Quality, honesty and integrity cover this part of the list. These are character issues. They are about choosing to give as much importance to someone else’s needs as I do my own.

 


Quality – is the degree to which something is produced correctly. It can be somewhat subjective, but the higher the bar is raised, the higher the quality standard becomes.


Honesty – is moral character that is trustworthy, loyal, fair and sincere. It is absent of lying, cheating and stealing. Thomas Jefferson is attributed with having said, “Honesty is the first chapter in the book of wisdom.”


Integrity – is adherence to strong moral and ethical principles and values. One has integrity to the extent that they act according to the values, beliefs and principles they claim to hold.


Poor quality and a disorganized job site are part of the physical construction skill set. These things are skills that should be taught through apprenticeship and mentoring.


The same is true for lack of scheduling and poor time management. These things can be taught. Learning and applying these skills is more difficult, in that they are more directly connected to specific personality traits.


Leaving a job hanging partially finished, however is strictly a moral issue and unacceptable, short of some life altering emergency.


The entire issue of construction projects falling apart is unnecessary and unacceptable.

 


It doesn’t have to be this way!

 


You can choose what you want, it’s up to you. Learn more, expect more. Raise the bar as high as you can reach.

How To Prevent Your Construction Project From Falling Apart

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Emphasis on, “The Project”, Not the Construction

 

 

You or someone you know has had a construction project, ‘not go as planned’.

 


To get it back on track may have just required a little clarification or…it may have ended up in court. Clarity of the project up front is the most important and most overlooked part.

 


I’ve heard people say the worst experience of their life was a construction project gone bad. It doesn’t have to be this way!


This problem can, and should, be addressed before any actual construction begins. The underlying issue with any disagreement is, different people seeing things differently. A good contractor’s job is to sort through these differences and develop a clear picture of the project scope, design, schedule and price.


Most construction projects fall apart for one of these reasons:


• Misunderstandings due to poor or no communication
• Blindsided by cost overruns or hidden costs
• Completed project wasn’t what you wanted or expected
• Not understanding construction terminology
• Poor quality
• Cluttered and unorganized job site
• Left hanging part way through an unfinished project
• Lack of scheduling or poor time management

 

The number one foundational problem between customer and contractor is –


LACK OF or POOR COMMUNICATION.


The first four…half of the list, are communication related. Good communication takes time and effort. Time and effort translate into additional cost. Additional cost means your project’s price is higher. Price is important and often leads to choosing a lower bid. Full circle back to the importance of communication. If you are aware of the differences and are presented a clear plan, you can make the best decision for you and your project.


The next two on the list have to do with trade skills and a LACK of QUALITY WORKMANSHIP. The level of craftmanship expected has been decreasing for years. I believe this is the result of importance placed on price rather than quality.


The last two focus on the LACK of HONESTY AND INTEGRITY. This is another place where the bar has been lowered and needs to be raised back up. Contractors need to say what they do and do what they say.

 


This entire list of issues can be remedied with attention given to these three overarching areas –


Better Communication
Quality Workmanship
Honesty & Integrity

 

 

Next week’s solution will focus on the number one reason construction projects fall apart – LACK OF or POOR COMMUNICATION. We will look at things you should know and expect from your contractor before any construction begins and throughout the project

 

Share your worst construction experiences in the comments below.

The Cost of Change Can Be More Than Time and Money

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It Can Be Reputation and Loyalty, and To Me These Are More Important

Change happens for all kinds of reasons, some needed, some not. Some people love change, it excites them. These people are the ones pushing the envelope and coming up with new ways of doing things. Others on the opposite side never want to change anything. It’s scary to change. What if it doesn’t work? It’s warm and comfortable a lot like being in the bottom of a rut. It’s been said that a rut is just a grave with both ends kicked out.

So, which of these positions should a business take?

I think it depends on the situation, the people or person and the reason(s). As is the case most times, the right answer is somewhere in the middle.

Let me preface this next portion with the fact that I have been a longtime supporter and user of Pella products, for more than 30 years. I have enthusiastically advocated and installed their products throughout that time.

I AM NOW RETHINKING THIS. I was informed yesterday of some product changes that have been implemented at Pella and one of those changes may just be the straw that will break this camel’s back.

Pella has always been ahead of the curve when it comes to innovation. (A part of what gained my admiration and loyalty.) One of these innovations is…was…one of my favorite products. Double or single hung windows with blinds or shades behind a removable pane of glass has been discontinued. This would have been the window I would have recommended above all others, short of some specific design parameters. This is the very window that I planned to put in my home in the next few years. I never imagined that this window would not be available.

I don’t profess to be a Pella historical authority, but I do remember some things that happened in the late 1990’s or early 2000’s. This is not about specific times or details, but about a decided trajectory that began and seems to be continuing.

Prior to that point customers would talk about the exceptional quality of Pella windows. The first straw was the question that I began getting about the ProLine Series “builder’s” windows. People wondered why Pella was making a lower quality builder’s window. It seemed to be counter to what Pella stood for. I assured them the quality was as good as ever, there were just less options and fixed sizes in this series.

The next straw came with the introduction of vinyl windows. More questions about what was going on. Why is Pella selling “cheap vinyl windows”? I would tell people that it was just a way to give the public more options. It was a way of helping more people and Pella quality was still available in the wood windows.

Then the next straw came. It was when there began to be problems with the bottom sash of the ProLine casement windows rotting. I continued to defend them. This was a fluke…just some bad sealant on one select style in one series. The straws continued to come, and I continued to defend Pella and my supplier. The service and support were great. We would do what was needed to help them through this freak incident.

Now, full circle back to yesterday’s straw. I can’t say why Pella made this change to no longer offer shades between the glass in hung windows. I assume it was monetary as I presume all these decisions were. I don’t have any of Pella’s internal decision-making criteria, but they are a company that needs and deserves to make a profit.

What Pella needs to remember is that dollars are certificates of appreciation and consider that my appreciation may go somewhere else.

I’m sure that as big a company as Pella is that they won’t even notice when I’m gone. What they may notice is the size of the snowball when more and more contractors and customers do the same.

These types of changes have become too common place over the last 20 – 30 years. Too many times companies have chosen to sell more for less rather than seeking to provide high quality at a high price. There’s nothing wrong with buying inexpensive projects for less. It’s about deciding who you want to be and who you want to serve.

Pella’s decisions are theirs just as my decisions are mine.