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Benefits to a Construction Proposal That We Haven’t Even Talked About Yet

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An Overview of the Blueprint for Building a Better Proposal System

This past week John used the Blueprint for Building a Better Proposal system to do a couple of proposals. Just like when he’d learned to build a house, he had some questions.

As John smelled the pizza setting in the passenger seat, it reminded him of his first meeting with Gene. It’s hard to believe that today’s meeting was going to be the 8th time they’d met to learn this proposal system.

As they are eating some pizza, Gene asks John if he had used the proposal system this past week. John said he had. Gene asked what questions he had.

In between bites John said, “The project I was doing the proposal for was a small repair project to a deck that was settling and pulling away from the house. As I put in the numbers for digging a couple of holes, filling them with concrete and setting some posts…the price didn’t seem to be enough for the work that would be needed.”

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“Great question.” said Gene. “Sometimes a specific task is small or more difficult than normal. This will be determined once the quantity is entered and the price is deemed too low.

To adjust this, insert an additional row in the spreadsheet, below the row with the low price. Fill down the content from the row with the low price to the new row. Then in the description cell of the new row write small and in the quantity cell put in an amount that will adjust the price as needed for the time to do the small task. Usually the material price can be removed from the second row, due to the small task not requiring additional material. This will depend on what the specific task is. (See the highlighted cells in the example below)

If the low price is due to the task being more difficult, instead of, or in addition to being small, you will use the same procedure listed above. An example of this would be a small concrete project in the back yard where a concrete truck couldn’t get to the construction area and the concrete was going to be moved with a skid loader.

If you remember early in the process, we talked about the common mistakes that contractors make when bidding projects and one of those that this system solves is…

A construction proposal system that is customizable.

This leads to some of the other benefits this proposal system offers that we’ve only discussed in passing. These include, but aren’t limited to, a Scope of Work, a Production Budget and accurate progress payments.

A Scope of Work is important so that production crews and subcontractors know what’s included in the project and what’s not. This prevents the subcontractor/employee from doing more or less than was expected – if too much work is done there will be cost overruns, if everything the customer expects is not done then the customer is unhappy.

A Scope of Work is easy to do. It is simply saving a copy of the proposal and removing the customer’s prices for each item and the totals at the bottom of the page. Making a couple of simple changes to the document title and removing the signature lines.

That easily you have a Scope of Work

Preparing a Production Budget that can be shared takes a little more work. It involves the transferring of numbers from the Worksheet to a separate Production Budget template. The numbers that get transferred are generated automatically when the Worksheet is prepared.

We’ll wait to get into the payment application until later. For now, you just need to use the system for a while and get familiar with it.

This whole system comes down a clear description of what work the project includes or doesn’t and a consistent and accurate process for pricing.

This proposal system is the foundation for building a profitable business.”

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

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

Dollars and Cents Are What Make a Construction Project Profitable…or NOT

The Final Step to Completing a Professional Construction Proposal

How to Decide Where Your Time Is Best Spent

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It Comes Down to Knowing Who You Want to Be

Last week I wrote about the importance of spending time wisely. I shared how I was working to clear the fog to determine what things I should focus on. What should I do and not do? So, like budgeting money I decided to work on a plan for budgeting my time…enter the spread sheet.

Like money, we can choose what to spend our time on.

The difference is that with money there’s the possibility to make more, not with time. This makes spending time wisely, even more critical.

So, what did I find out about budgeting time using a spreadsheet?

What I’ve found so far is that I’ve overspent my time budget by 175 hours (2%) and I still haven’t got everything entered. It is making it very clear that I can’t do everything that I want.

This spreadsheet is allowing me to look at the big picture and see where I can move things around and/or remove things completely to fit into the limited time available.

I listened to a podcast recently that pointed out how important time is due to kids doing school at home and people working remotely. This got me to thinking about how I’ve never really separated my work and personal time. My time is all just…my life.

I think this is because growing up on a farm there wasn’t a ‘clock punching’ separation of time. In addition to that, I’ve spent most of my life self-employed which is the same. I may be doing family, community or church things throughout the day or, I may be doing work things late in the evening or on weekends.

Using the spreadsheet, it is allowing me to see the amount of time being spent rather than the specific time of the day or night. It allows me to be better at living a well-balanced life.

Ultimately the spending of our time comes down to a personal choice.

It’s all about who we want to be.

We can spend our time where we want. So…to that point…today I want to spend my time with my family having a movie marathon weekend.

That’s who I want to be.

I Love the Challenge of a Good Remodeling Project

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If It Was Easy, Anybody Could Do It

 

The challenge of a remodeling project is taking an existing building and turning it into something new while working within the buildings predetermined parameters. Otherwise just tear it down and start over.

 

The remodeling challenge isn’t for everybody.

 

Building new is simpler, it’s a less restrictive clean slate that requires less imagination. Where’s the fun in that?

 

On the other hand, new can be more cost effective than remodeling. This is one of the questions that needs answered early on. If remodeling is the decided-on plan, just be ready for the challenges.

 

The Lavallee remodeling project certainly fits the status of challenging.

 

This project starts with a home that was built in the late 1800s. It has previously gone through numerous remodels and additions. The amount of previous changes makes this project that much more challenging.

 

The project’s goals:

 

  • Increase the size of the master bedroom, add a new master bath and walk in closet.
  • Add a bathroom to the second floor.
  • Widen the narrow stairway to the second floor.
  • Increase headroom at the top of the stairs on the second floor.
  • Open wall between the kitchen and the dining room.
  • Lower the dining room floor height to match the kitchen.
  • Install new windows.
  • Change the exterior of the remodeled part to a low maintenance exterior finished insulation system (EFIS) system.

 

 

The challenges start even before the construction does:

 

  • Is remodeling the best option?
  • What is the project budget?
  • What is the project timeline?
  • Without a blueprint what will the floor plan be?
  • Where do the customer’s plan to live while the work is being done?

 

 

 

As this project gets underway there have been new challenges that have come up. They are hidden inside, behind or under something. Until things are opened up you won’t know what they are. As they do, we address them, find a solution and move forward.

 

A few of the challenges we’re dealt with while digging for the addition foundation:

 

  • Temporarily disconnecting and moving the air conditioning ductwork so the digging could happen.
  • Discovering a buried gas line, determining it was not in use and cutting it out of the way.
  • Finding some unused foundation pilings and determining a plan for dealing with them…final plan yet to be determined.
  • Reconnecting the ductwork so the customer has air conditioning in this upper 90-degree heat.

 

 

I will post more updates to this project as they happen. Check back regularly and watch as this phoenix rises from the ashes.

The Next Chapter in “The Saga of the Grain-Bin Home”

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The Hero and Her Guide Are Defeating the Evil Budget Monster

As the voyage continues, Hannah and Mark trek forward on their journey toward the allusive ‘Grain-Bin Home’. An expedition like this is not for the faint of heart. It requires the passionate desire of a hero and the experience and knowledge of a trusted guide.

This story began a year ago with the idea of building a small home by repurposing a couple of used grain bins. The two steel bins would be connected by framed wood construction. This idea was dreamt about, discussed, thought about, revised, discussed some more and over the next several months, the preliminary plan emerged.

The collaboration of the hero and the guide in developing a plan before starting on an adventure like this is critically important to achieving a positive outcome. This planning stage is often as long or longer than the building portion. Turning a dream into a reality is the hardest part of the quest. It’s also the most exciting. It is the part where the imagining turns into the doing.

We prepared a proposal based on the preliminary plans. The dollar amount was more than Hannah wanted to spend. So, we went through a list of things that could be changed or removed to get the project closer to the target figure. This included things like radiant floor heating, Pella Designer Series windows with blinds between the glass, and a pass-through indoor/outdoor fireplace.

As we worked on these revisions, Hannah on the drawing and me on the proposal we were presented with some benefits of having an experience guide and the connections that come with them.

First, I became aware of some tongue and grove V-jointed 1×6 pine that a painter had, which had been stained the wrong color for one of his projects. There was enough of it to do the interior wall that we are planning to put stained wood on. It was offered to us at the cost of the wood…we bought it.

Next, I received a communication from my Pella representatives, that Pella Products of Kansas was going to have a “Contractor Garage Sale”. This was to reduce the number of unclaimed, mis-ordered or slightly damaged items taking up space in their warehouse. Hannah and I went to this sale. With some ‘on the spot’ creative solutions we made some idea adjustments and were able to get all the windows and one of the doors needed. This was a price reduction for the customer of over $23,000 from the original proposal. We will spend a portion of that savings on painting the windows so they will all be the same color.

We are on the cusp of transitioning to the doing.

Hannah is finalizing the design changes created by the earlier price reduction list and the windows and door that were purchased. At the same time, I’m finalizing the figures as per those things as well. In the next few weeks Hannah will securing the money needed, and we will be starting on this adventure.

Keep watching for the next chapter in “Saga of the Grain-Bin Home” and share it with others you think might enjoy this story.

Dreaming About Budgeting

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The Roots of the Financial Planning Tree

 

A few weeks ago I wrote about the 4 W’s of budgeting. That post was an overview of the WHY, WHAT, WHERE AND WHEN of budgeting. It was a quick look at the purposes for budgeting from the outside. It didn’t answer the question of HOW I do my business budget. It is important to understand the underlying reasons or there is no motivation to prepare or maintain a plan. So we will peel off another layer of the onion and get closer to the process of HOW.

This morning as I was reviewing my schedule and once again trying to figure out how best to spend time, I had a thought…time and money both need to be managed and spent well. Both of them have a major role in achieving our dreams and need to be budgeted.

We can’t see into the future so we can’t know in advance how much of either of these, (time or money) it will take. What we can do is use information from our past and plan for the future. The hard part is maintaining the present. We need to be aware of where we are and be intentional in our actions using what we know from the past and what we want for our future, otherwise we just wander through life.

Dreaming about the future –

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            If you haven’t determined where you want to go, how will you ever get there? Growing up watching my Dad farm, that was what I dreamed of doing. I started in that direction without much of a plan (okay none) and then something unexpected happened…my Dad died. If his death wasn’t enough, the waves that it created completely changed my future. Granted there is no amount of planning that could have prepared me for his death, but the right plan would have served as a life preserver until the waves subsided. Instead my ability to dream was drowned. I went through years with no clear destination or direction. Then several years later I had a dream resuscitating incident. I fell while working on a second floor. I was unconscious for three days. After regaining consciousness and while recovering, I realized that God wasn’t done with me yet and I still had things to do and dreams to achieve. I think that when I hit the ground the impact must have restarted my ‘dream heart’. The point of this is the underlying importance of dreams. Having a plan can serve as a life preserver.

 

863937109_6245bef2c4_oI have always been a planner by nature. For years there was no purpose behind the planning. Dreams are what give the planning a purpose. My dreams now are big, more like they used to be. Things like; being debt free, renovating our home, traveling, owning rental property, flying my own plane and owning a NASCAR team…to mention a few. Everyone’s dreams will be different, but this will be the motivation behind the plan.

Okay now we have a reason for making plans. How much money and time are needed to achieve your dreams? Break each one down, what is it going to cost to get out of debt or buy that NASCAR team?

If my debt is $100,000.00, how am I going to pay it off? How long is it going to take? How much do I currently earn?

I will peel another layer in a later blog and we continue to go deeper. Until then what are your dreams?

The 4 W’s of Budgeting

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The Place to Start When Considering a Budget

 

Recently I have been asked multiple times about how I do my business budgeting. This question has come up multiple times over the last several years. Based on the number of times, it must need some discussion.

Budgeting has rarely been a very popular subject. Most people view it as restrictive, confusing or just too much work. It’s even more complicated when you’re self-employed and don’t have a constant or regular income. Before you can budget effectively you need to answer some questions.

The first question to answer is WHY do you want to bother with a budget? This could be because it’s just one of the things that the business world talks about, so it must be the right thing to do. It could be because you are tired of not knowing where your money is going. It might be that you feel out of control. Whatever the reason, this needs to be the first question to answer, because it will affect how you answer the remaining questions.

The next question is WHAT difference is a budget going to make? Before budgeting I would deposit a check and Debby would pay bills. Later I would be surprised when there was less in the account than I expected. After writing the numbers down and doing the math I could see exactly where the money had gone. Before it was written down it would be abstract and estimated. It was amazing how much difference it made seeing it written down. If your happy with your current money situation and can account for where it all goes, then you don’t need to bother with a budget.

6736189489_451af024b0_oIf you don’t like where you currently are then it’s time to sharpen your pencil and get ready to answer the next questions. WHERE do you want to be? This will be different for everybody, but it needs to be answered. Do you want to have money put back for your retirement? Do you want to be out of debt so that you aren’t feeling the pressure that comes with owing money to someone? Maybe you are just tired of your life being out of control and living paycheck to paycheck. Whatever the answer to this question, once you’ve answered it, you then have a destination. If you don’t have a map how will you ever be able to get there?

Next is WHEN will I get there? Once you have determined why it makes a difference and where you want to go, it’s time to figure out how long it’s going to take. This comes down to doing some simple math. Depending on what your end target is, it may seem overwhelming. The thing to remember is that if you don’t start you sure won’t get there. This is why some way of tracking progress is helpful. It can give the process a sense of reality rather than just being a fantasy. Dave Ramsey refers to Aesop’s Fable, the “Tortoise and the Hare” in his Financial Peace University course. We live in a high speed want it now world. We need to remember that slow and steady wins the race and not be discouraged if in the beginning it looks overwhelming.

After years of working through these issues I have come up with a system that works for me. It is an accumulation of different thoughts, ideas and plans from a variety of different people and places. In a future post I will break down and share HOW I budget and track my finances. So until then, answer the questions above so you will be ready to move forward and get control of your money and your life.