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Trying to Build a New Business

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

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

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

So why don’t they do something about it?

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

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

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

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

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

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

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

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

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

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

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

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

Don’t believe it…it’s a lie.

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

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

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

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

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

What Makes a Construction Proposal So Important?

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

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

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

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

A proposal taken from blueprint to reality.

Let’s get started.

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

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

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

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

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

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

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

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

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

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

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

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

You now have completed the proposal!

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

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

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

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

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

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

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

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

Previous posts in this series:

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

What Does it Take to Build a Successful Construction Company

It’s Time for the First Meeting

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

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

Do You Want to do a Good Construction Proposal?

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

What Makes a Construction Project Most Profitable?

What Makes a Construction Project Most Profitable?

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It All Comes Down to Dollars and Cents

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Enter the quantity of the work to be done.

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

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

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

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

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

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

Previous posts in this series:

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

What Does it Take to Build a Successful Construction Company

It’s Time for the First Meeting

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

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

Do You Want to do a Good Construction Proposal?

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

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

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Clear Communication is Critical to Happy Customers

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

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

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

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

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

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

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

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

What is a Scope of Work?

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

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

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

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

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

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

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

Previous posts in this series:

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

What Does it Take to Build a Successful Construction Company

It’s Time for the First Meeting

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

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

Do You Want to do a Good Construction Proposal?

Do You Want to Do a Good Construction Proposal?

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It Starts by Asking the Right Questions

Another week has gone by and Gene’s looking forward to today’s meeting. As they wrapped up last week’s meeting, John indicated that they would “actually” learn the first step in the proposal system today.

As Gene enters SMR Construction Company’s conference room, John is sitting at his computer with a Power Point on the big TV ready to go. “Good afternoon, Gene. Are you ready to get started learning the first step for doing better proposals?”

“I’ve been looking forward to it all week long.” says Gene.

“Okay. There’s oriental takeout there on the counter. Fill a plate and let’s get started.”

As they fill their plates, John asks Gene,

“When you begin talking with a new customer, what’s the first thing you ask?”

Gene ponders the question as he sets down. “I ask them about their construction project. What is the work they want done? For example, are they wanting to add on a room addition or remodel the kitchen or do they want to replace the windows?” Then Gene continues “You know…

WHAT is it they want done?”

John responds, “This is the typical question asked by most contractors. Without a doubt, it’s a question that needs to be asked. But there’s another question that will help you serve your customers better in achieving their construction dream.

The most important question is WHY.

Why does the customer want to do this project? Do they need more space, does something need repaired or replaced, are they looking to make an area more usable, or is it just because they want to? Learning their “why” early helps clarify their “what”.

As the construction professional, it’s your job to guide the customer through this process. Most customers have very little if any experience doing construction projects. Often, they get ideas from DIY programs on TV or the internet, other people’s projects, etc. and they just want one of “those”, whatever that is.

Every project is as different as the customer. Without blueprints, specs or seeing the existing location, the chances of giving the customer the project they want is almost impossible. Unless they have a full set of blueprints and specifications to bid from, you need to gather the information for each specific project.

The customer will have a vague image in their mind of what they want. It’s the contractor’s responsibility to guide them to the realization of that dream.

Last week we talked about the documents and definitions that make up the proposal process. Here are the steps to preparing a proposal:

  • Gathering information
  • Preparing the Scope of Work
  • Pricing the Project
  • Quantities
  • Preparing the Proposal

The important thing when gathering information is to not overlook something. This is what makes the Bid Sheet so important. It includes a list of most of the different construction tasks that might be needed and provides space under each task for a brief description, dimensions, specific notes, drawings, etc.

A pre-determined list minimizes the possibility of forgetting something.

The information gathered can be recorded in whatever way works best for you. 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.

If you use an electronic device (tablet, smart phone, or laptop) to gather the information, you can enter it in the appropriate space on the Bid Sheet template. With most electronic devices now, you can either type, write, or draw right on the device.

Using an electronic device streamlines the process and reduces the chance of something getting overlooked. Be sure to keep a copy of the template for the project you are working on; this will leave a blank template for the next time.

Forgetting to include something in the proposal is a sure way to lose money.

There are over one hundred items listed on the Bid Sheet and it still doesn’t cover every possibility. Construction projects vary a lot. Even small projects can include a lot of different pieces. If you leave one of the pieces out, someone’s going to be disappointed.

Here’s an example of finding out the WHY:

When meeting with customer, Jane Smith, she explained that she wanted to add a laundry/sewing room to her house but didn’t know where to start or what it should include.

We asked her WHY.

We found that she loved to sew and did a lot of it. Currently she used the table in the main floor dining room for measuring and cutting and did the sewing on a machine in the basement. In addition, her washer and dryer were in two separate closets in the master bathroom. Both situations were inconvenient.

Finding out “her why” helped us to find solutions for building her dream.

Here’s an example of the information gathered on the Bid Sheet:”

As they were finishing up John said, “If you’re serious about doing better proposals and haven’t got your Building a Better Proposal Stystem yet, I would suggest that is the first thing you do.

I would recommend you use the Bid Sheet this week when you meet with a customer wanting a proposal. Bring it with you next week so we can use the information from the Bid Sheet to prepare a Scope of Work.”

If you’d like more information about the proposal system referred to in this blog post, you can check it out here or join us at the free Building a Better Proposal Workshop at 10:30 CST on Saturday, February 10th. Attendees will be able to get the proposal system at half price plus a 90-minute, one-on-one training on how to use it for free.

You can learn more about some of the other tools and training 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?

What‘s 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

Building Anything is Better When You Start with a Plan

Building Anything is Better When You Start with a Plan

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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)

 

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

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This is the First Step in Building a Better Proposal

Even though Gene was still overwhelmed, and his schedule was packed, he knew the only way to ever get control was to keep his upcoming appointment with John.

Gene had spent a lot of time this past week considering the questions John had asked at the first meeting.

  1. Why do you do what you do?
  2. Do you love what you do?
  3. Why do we need to do proposals?

As Gene was driving to the office of SMR Construction, these questions were still banging around in his head with a wide variety of answers and no real clarity.

As he entered the office, Gene smelled something amazing. He hadn’t realized how hungry he was. John was providing lunch this week, and the smell made his hunger apparent.

In the conference room John was stirring some chili. “Lunch is ready. Grab a bowl and let’s get started.”

As they sat down John asked, “Did you come up with answers to the questions?”

Gene sat there for a minute and said, “I’ve come up with way too many answers. About the time I think I have it figured out; another answer shows up.”

John grinned, “That sounds about right.

The important thing is not having every answer to every question, but rather to continually be asking the questions and actively looking for the answers.

I still ask and answer questions every day.”

“A good way to find WHY answers is to figure out things that work and things that don’t. Let’s start with a WHAT question. John handed Gene some papers and said,

“What are the most common bid mistakes contractors make?

Here are seven mistakes that construction companies consistently make that cost them a fortune in both time and money. The first one is…

#1 Customers lack clarity – You remember the story I told you last week about that misunderstanding I had with a customer? This is a perfect example of how the lack of customer clarity is a problem. You need to provide a clear detailed description of the work and the materials you’re going to provide. A clear scope of work helps avoid customer confusion. The Building a Better Proposal provides a system to give clarity to your customer.

#2 Production crews lack clarity – The scope of work not only provides customers with clarity, but it also gives the production crews a clear understanding of the work to be done. This prevents subcontractors and employees from doing more or less than the project includes. Too much work done means cost overruns. Too little and the customer is unhappy. The Building a Better Proposal system gives the production crews a clear description of the work to be done.

#3 No production budget – When the production crews don’t know what the budget for the project is, they often spend more than expected. These cost overruns mean less profit.

When I was just starting out in business a banker told me…

If you take care of the pennies, the dollars will take care of themselves.

Let your production crews know how many pennies they have to spend. This will lead to more dollars of profit. The Building a Better Proposal system provides the production crew with budget numbers.

#4 Unsatisfied customers – Unhappy customers can be a series problem. Not only can they be a drain on company morale, but they can cost you money and hurt your reputation. They’re paying you to have their dream turned into reality. When they don’t have an accurate project amount before the work’s done, they won’t be happy when it’s finished and costs more than they expected. The Building a Better Proposal system gives the customer a clear expectation of cost before the work starts so that when it’s done for that price, they’ll be happy.

#5 Unprofitable projects – One of the biggest problems in construction is Guesstimates. Guessing at the amount of time and material it’s going to take to do a project is a big risk. Different size projects require different overhead and profit margins. The Building a Better Proposal system provides predetermined options of overhead and profit when preparing a proposal.

Proposals done this way can increase the profitability of your projects.

#6 Trying to do everything yourself – Most small construction companies only have a few employees. Their focus is usually on the physical construction which doesn’t leave time for doing accurate detailed proposals. Most contractors don’t like paperwork. This leads to hasty, inadequate, and oversimplified proposals. The Building a Better Proposal is a system that allows you to focus on doing construction while office staff does paperwork.

#7 Your bidding system isn’t customizable – Most construction projects consist of a variety of different areas of construction. You need a system that gives you the freedom to pick and choose what’s included and what’s not. Because markets vary greatly based on geographic locations, you need a system that you can adjust to your area’s specific requirements and rates. The Building a Better Proposal system allows you to customize proposals in these ways and more.”

John could see that Gene’s eyes were glazing over. “I know this is a lot to take in and doesn’t feel like we’re getting any closer to actually doing proposals, but I assure you…

Getting clear on these mistakes is the first step to providing better proposals.

Next week we’ll break down and look at the parts that make up the Building a Better Proposal.

You can check out the other Business BUILDing Tools that John uses here.

If you have questions about the Building a Better Proposal tool or how we can help you take control of your construction business, set up a free 30-minute construction company consultation.

It’s Time for the First Meeting

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And Gene’s Not Sure He Can Squeeze It In

It’s Friday, and Gene is in his normal state of overwhelm. He’s supposed to be meeting with John tomorrow afternoon to go over the Building a Better Proposal system, and he doesn’t know how he can fit it in.

There are still so many things that need to be done.

“Maybe we can reschedule,” thinks Gene, “I’ll just give John a call and see about moving the meeting back a week… Okay, that’s enough.” Gene says to himself. “The whole purpose for this meeting is to change things, so that I don’t have to feel this overwhelmed.”

“I’m tired of always feeling out of control.”

A few minutes after noon on Saturday, Gene pulls up in front of the SMR Construction Company office and admires the building. As he gets the pizza out of the truck and goes up to the front door he thinks, “I sure hope I can have a place like this someday.” As he walks through the door John greets him with a solid handshake and a grin as he says, “I wasn’t sure that you would make it.”

“I wasn’t sure either.”, Gene says with a smile. “I came really close to calling yesterday, to see about rescheduling.” “I’m glad you didn’t.”, replies John. “You’ve taken the hardest step in a series of hard steps.”

“The first step is the hardest. It requires a change of thinking and direction.”

“Bring the pizza and let’s go into the conference room.”, John says. As they make their way into the spacious comfortable room Gene thinks back on when they used to have their weekly production meetings in this very room. Looking back, he realizes how much he had taken what John had accomplished for granted.

John hands Gene a plate and they both get some pizza. “There’s water and soda in the fridge like always.”, says John, “Help yourself.” As they set down and start eating John asks Gene, “Why did you start your own construction company?”

“Why do you do what you do?”

Gene sat there for a while chewing his pizza at the same time chewing on this question. “Why was he doing this?” He had asked himself this question a lot, but it was usually a question of frustration, not really looking for an answer.

After what seemed like an eternity, Gene answered, “I really don’t know. I suppose that seeing what you had accomplished, I wanted the same thing.”

“That’s the same answer I would have given if I’d been asked why I started SMR Construction.”, agrees John. “It wasn’t until I realized that to have a successful and profitable business, one that I was running rather than it running me, I needed to make some changes. One of those was to answer that question.”

“The WHY is more important than the HOW. Maybe your why is to make a lot of money, the enjoyment of building, the control that comes with owning your own company, something completely different or a combination of things.”

“Do you love what you do? In your current situation, do you even like it?”

Now Gene has another unanswered question to ponder. Does he like what he does? Life sure was easier when he worked for John. What was it that prompted him to go into business?

John interrupted Gene’s thinking, “Gene, you probably won’t get the full answer to these questions today, and we’ve already been discussing this for a while now. I would suggest that you take some time to think about these questions and dig down deep to find the answers.”

“The answer to these questions is the foundation your business will be built on.”

“Before we run out of time today, let’s move on to the topic you came for, a better proposal system. Here’s an overview of the proposal system that we’ll go over today. These are yours to make notes on and take with you.”

“Just like the why question for your business, you should answer the why question about proposals.”

“Why do we need to do proposals?

“Gene, there is a huge misunderstanding between construction companies and customers. The biggest part of this gap is poor communication. Even when attempting to communicate clearly, it often goes badly. Let me give you an example.”

“Several years ago, I met 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 agreement. He asked if this was a problem. I told him 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 was really asking was…”is it going to cost more?”.”

“The response ‘in reality’ was, “It’s no problem to dig the additional 100’, but it will cost you more.” Neither party intended nor expected this to be a problem. It was a simple matter of misunderstanding…a lack of communication.”

The bulk of the communication responsibility is the contractor’s; we are the professionals after all.

If you follow along on the overview, on page 2 you can see the importance of a proposal system and why you need it. Page 3 has reasons for and common reasons against doing proposals. Page 4 is a list of documents included in the system and descriptions of how they work. Pages 5 and 6 are an overview of the proposal system.”

“As we wrap up today, Gene, I would recommend that we schedule some time weekly to work through the proposal system. I know that you don’t feel like you can spare the time, but I would point out that if you want things to be different, it’s going to require you to do some things differently.”

Gene thought about this for a few minutes, “I get excited about the possibilities for my future every time we talk about this. Let’s do it. How does next Saturday sound, same time and place work for you?

“If I don’t commit to doing something different, nothing will change.”

John smiled wide and remembered when he had made this same decision. He was encouraged about Gene’s future and excited to be a part of it. “Remember when you called me a few weeks back and how frustrated you were? And then in the next call we discussed the possibilities for your future? Think on these things and your why as you study the pages from today. When we get together next week, I want to hear about your why, and we’ll go deeper into the Building a Better Proposal system.

“As you go through these pages write down any questions you have, and we’ll discuss them next week.”

If you’re interested in the Building A Better Proposal system that John and Gene are working on, check out Solution Building’s Business BUILDing Toolbox. To discuss how the proposal system could help your construction company, you can schedule a meeting with me here. As always, feel free to post any questions you have in the comments!

What’s it Take to Build a Successful Construction Company?

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Gene’s Excited About His Meeting with John

As usual, Gene had been on the go, nonstop, trying to keep construction projects moving forward, collecting money, paying bills, and meeting with new potential customers when he realized he still had six projects needing proposals. As he thought about this, he realized it had been more than two weeks since he had talked with John about how he did construction proposals.

It’s so easy in business to get caught up in fighting daily fires.

Gene picked up the phone and dialed John’s number. “Hey John, this is Gene, have you got a few minutes?” “Sure,” John said, “What can I do for you?” “I just realized that I’ve got six projects that need priced, this reminded me of our conversation a few weeks back, when you offered to go through your bidding process with me. Does that offer still stand?”

“Sure,” said John, “when would you like to meet?” Gene thought for a minute, realizing he wasn’t sure when he would have time to squeeze in anything else. “I don’t know John, as usual, I’m booked pretty full.” John waited for a minute and then said, “I understand. Think back to what you said in our previous conversation. Do you remember how frustrated you were?”

“Your situation isn’t going to change until YOU decide to change it.”

Gene rubbed his forehead. He knew John was right. “Okay”, Gene said, “I can probably squeeze in an hour or maybe two Saturday. Would that work?” John shook his head and smiled, remembering what it was like to be where Gene is.

Then he said, “Gene, I appreciate where you are, but the process of getting from where you are, to where I am, isn’t going to happen in an hour or two. I’ve been doing it for forty years. If you can commit to four hours Saturday, I will be glad to meet with you and we can start the process.”

“YOU are the only one that has the power to make this change.”

Gene sat there with all the things that needed to be done, bouncing around in his head. Then he thought about how tired he was of feeling out of control. Once again, he knew his mentor was right. John had taught him so much about construction and how to build things.

Now it was time to learn about the business part of construction.

“Okay,” said Gene, “How about we meet at noon on Saturday, and I’ll bring the pizza.” John said, “That sounds great, and we can get started, but that’s all this meeting will be…getting started. Like I said before I’ve being doing this for years. It takes work, it takes commitment, but the end result is worth it.”

“It’s more than just learning. It’s a lifestyle change.”

“Gene, most people in construction never learn the business side of operating a company. This is where they struggle until they get to a point where they give up. Bring an open mind and an open heart and be ready to have them both filled.”

“Nothing is going to change until something gets done”

Now Gene was getting excited and looking forward to meeting with his friend and mentor and making some changes in his business and his life. He was beginning to realize that a construction project started out right, begins long before any actual construction takes place.

It takes the right tools, training, and action to build a successful construction business. It requires you to do more than just talk about it.

If you or someone you know is feeling out of control like Gene, there are tools and training available to help get control of the business. The Business BUILDing Toolbox is filled with construction business tools.

If you would like to dive into the Blueprint for Building a Better Proposal, we’re hosting 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 questions about the workshop or business systems, you can schedule a free 30-minute construction company consultation here.

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

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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.