Latest / Contractor Business Builder Podcast / Estimating Mastery Fixing the Proposal Mistakes That Cost You Projects

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Estimating Mastery Fixing the Proposal Mistakes That Cost You Projects · Contractor Business Builder Podcast

• 0:05
  For seven and eight figure GC's who were shocked when we
• 0:08
  uncovered what their proposals were missing and what it was
• 0:12
  costing them. If you want to win more jobs and
• 0:14
  stop guessing why clients aren't choosing you, this is for you.
• 0:55
  So this video is part of a series called Mass.
• 1:01
  This video is a part of a series called Estimating Mastery.
• 1:04
  And today we're going to be talking all about proposals, how
• 1:07
  to improve your proposals, how to be thinking about the
• 1:10
  proposals, how to present the proposals in a way that ends up
• 1:13
  winning you the job. Make sure you're not leaving
• 1:15
  money on the table. So the first thing we're going
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  to be talking about is the meeting, the actual proposal
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  meeting. This is one of the most
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  important parts. Yes, we're going to be getting
• 1:24
  into what, you know, the nitty gritty details of the proposal
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  and what's all on that and what to think about.
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  But this is where a lot of contractors don't put enough
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  attention or thought into is the actual meeting itself.
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  I've talked with contractors who thought that I'll just e-mail it
• 1:43
  over to my clients. I've already talked with them a
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  whole bunch. We've already talked about the
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  price. I was going to e-mail the
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  estimate, the proposal, whatever it may be.
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  Don't call it an estimate, call it proposal called a budget.
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  And then they'll get back to me. This is a easy way for them to
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  ghost you, for them to just move on to pick another contractor.
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  Whatever it may be, you always want to be setting up a meeting
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  to present your proposal to the client.
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  Ideally this is an in person meeting, especially if it's an
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  important project. If it's anything with a higher
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  value or important to your business, definitely want to be
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  meeting in person. Zoom does work well too.
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  If you are, you know, busy or your clients are very busy, it's
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  a little bit more convenient to do like a video type meeting.
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  But either way, you want to be live in a meeting with them.
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  This is paramount to closing a sale and moving forward with the
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  proposal. You also want to make sure all
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  the stakeholders are there. So if it's a husband and wife or
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  partners or or whoever it may be, anybody who's part of the
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  decision or is part of the project should be there as far
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  as like on the client side of things.
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  So make sure both people, if it's, it's team partnership,
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  whatever, everybody is there that's going to help make that
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  decision. And when you get started, you're
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  going to go through a little bit of, you know, meet and greet and
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  introduction or whatever, right? Build a little report when you
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  actually get to the proposal and start going through the line
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  items and the numbers. I like to show the bottom line
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  first or at least tell them this is where we're tracking.
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  You know, this new home is going to cost you 900,000 and you
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  know, $920,000, right? That's that's kind of our bottom
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  line. Just wanted to get that sticker
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  shock out of the way. Now go through the estimate and
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  show you exactly how the numbers all stack up in, in the scope of
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  work and what's all included with that.
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  How does that sound to you? Right.
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  And this way they are not thinking about what's it going
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  to cost? What's it going to cost if you
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  just start at the top of the estimate, the proposal and
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  you're going line by line and you're saying like this is
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  100,000, this is 50,000 and you know this and this, all that
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  they're doing in the back of their mind is like, OK, OK, you
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  know, what's this going to cost me is or you know, where are we
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  at, right. And if you've done your
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  estimating properly and budgeting properly, then there
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  shouldn't be much of A shock to them or surprise.
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  But it's probably still going to be different from the last time
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  you showed them a budget or whatever that that kind of the
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  scope of size of budget that you mentioned.
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  So I'd like to get that bottom line out of the way first and
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  then make sure you always have some sort of follow up sequence.
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  So when you first present it, ideally they're like, Yep, looks
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  good, let's get started. You don't send me the contract
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  and butter Bing butter boot, right?
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  That's that's the ideal situation.
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  A lot of times they're going to say we need to think about it or
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  we're not sure. We have to talk with, you know,
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  bank or financiers or or whatever, you know, whatever
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  kind of smoke screens they may show throw up or, or legitimate
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  concerns that they may have. Of course you want to work
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  through those, but essentially you're not going to necessarily
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  close the sale on the spot with the proposal.
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  So you always want to be scheduling a follow up meeting,
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  schedule a meeting from a meeting.
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  So if you get to the end, they're like, we need to think
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  about it. You know, great.
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  What kind of things do you feel you have to think about more?
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  You want to dive into it a little bit, but ultimately you
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  don't need to be like a pushy used car salesman where you're
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  like trying to close them on that that call right away.
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  You might say, OK, sounds good. I understand you guys needed a
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  little bit of time to go through this and think about it and talk
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  about it. You know, how is next Tuesday
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  afternoon? Do you think you know you'll
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  have enough time? And then I like to ask the
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  client like how much time do you think you need to think about
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  it? They say no, a day or two, give
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  them a little extra grace period because there may be just trying
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  to be nice, but make sure they have enough time.
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  And then say let's schedule another meeting for Tuesday at
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  4:00 PM, will jump on another meeting.
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  Any kind of concerns or questions or you've had time to
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  think about it, We can answer those and see if it's a good fit
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  and we can move forward. So that way you're always
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  setting the stage and you're not kind of leaving it hanging with
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  the client. You're always setting up the
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  next call and everything and we're going to get into the all
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  the proposal stuff like I mentioned.
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  But this part of it is so important because without a good
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  process for the actual meeting and follow up, it doesn't matter
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  how amazing your proposal looks, you're still going to fall flat
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  and probably not be optimized for, you know, sales conversions
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  and things like that. So that is the first point, the
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  actual meeting. Second point is the cover page.
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  So another common thing that I see a lot of GC's are are are
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  missing is they present the proposal or your estimate to the
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  client. And all it's got on there is
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  your line items and maybe a little blurb at the top of like
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  your business with the logo. There's no marketing, there's no
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  reason why they should choose you.
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  There's no indication of like how you run projects or anything
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  like that, right? So this is a great opportunity
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  for you to put a little bit of marketing material, a little bit
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  of, you know, extra finesse and touch on it to, to really
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  portray the proposal in the light and prepare them to be
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  reading through this proposal in the way that, that you want to,
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  to see them. So what should you have on your
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  cover page? I'm saying cover page, but you
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  could even have a couple of different pages.
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  If you've ever seen a design, you know, if you worked with an
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  interior designer, and they're often really good at this
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  because they're, they're, that's what they do.
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  They're good at design and players and all this stuff, but
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  often they'll have like a really graphically pleasing, you know,
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  very branded type of documentation to show selections
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  and how they work and all this stuff.
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  So something like that you can mirror.
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  I'll throw some examples up here so you can maybe see a couple,
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  but essentially you want to do about about your proposal.
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  So what should they know about the proposal?
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  You know, this is a budget that we've taken our time to put
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  these numbers. These are some things that you
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  want to be thinking about when we go through the pricing.
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  This is not an end appeal. If, if we need to make some
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  adjustments, we can, whatever rate you have to kind of put in
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  there what you feel is appropriate, then you should
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  have some stuff on your business.
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  So our approach, right, this is our approach to building.
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  These are the kind of the steps. This is how this proposal fits
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  into, you know, the rest of the building process.
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  This is, you know, what's important about our business.
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  And then of course you want to have your credentials on there.
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  So you should have credentials like if you've won any awards,
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  if you're part of any Chambers of Commerce or business building
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  type groups, if if you have certain certifications or
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  licensing or whatever it may be, even your warranty warranty
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  probably come later. But you want, you want to
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  portray your business, you know, we've got 4.7 Google, you know,
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  star rating, whatever it may be. Why are you qualified?
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  And you want to get that out, you know, right in the
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  beginning. And then if you want to really
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  go for that next level approach, have a few custom elements in
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  there. So you should have like proposal
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  for your clients name and all that kind of stuff.
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  So it's at least somewhat customized to the client.
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  But if you can have like a nice picture of their their house or
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  rendering or something to go along with specific to their
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  project, it just gives it that personalized touch.
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  And it's not like this is just another copy and paste thing,
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  you know, from our company. So that's what you want to be
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  having on the cover page. Alright, so moving on to point
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  #3 here, and this is the numbers, you know, brass tacks,
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  black and white, where the, you know, the buck stops the
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  numbers. I like to have itemized
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  sections. I I don't like just a flat fee
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  at the bottom. It's like here's this, you know,
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  pages of scopes of work and it's going to cost you $700,000.
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  You know, it just, it looks, it looks too intentionally like
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  you're, you're just trying to sort of hide numbers and not be
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  open, even though that may not be your intent, but that's kind
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  of the perception that comes off from from having something like
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  that. So at the very at least have
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  like phases. So you're preconstruction,
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  demolition or site, you know, site work, you know, whatever
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  framing like at least the big phases or sections of the of the
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  project. You should have numbers for
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  that. So you can build a price so that
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  they know that's 700,000. Well, that's you know, 50,000
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  for this, 100,000 for that. Like so they can see that
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  there's some involvement. I like to even have like a step
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  beyond that with more specific itemized pricing.
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  I know some GC's don't like to do this because they think the
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  client's going to start picking apart their estimate and
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  everything. But if you're using a pre
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  construction service agreement, then you should be getting paid
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  for doing that final budgeting and that really detailed like
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  drill down type budgeting. So if they want revisions, if
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  they want changes, essentially they're paying for it.
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  And you know, that shouldn't be an issue and it's a much better
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  working relationship from that. But all things considered, if
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  that's not the case, at least have it in the large chunks or
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  phases categories of the of the estimate chronological as well.
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  You could do it by sections or parts of the project.
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  But typically speaking, I like to see a layout of chronological
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  of like site setup, site work, pre construction before that
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  demo framing, rough and trades finishing, you know, like that.
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  It's just a nicer flow to the numbers to go in like a
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  chronological order of the beginning of the project, all
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  the items, you know, completion of the project, what have you,
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  and then maybe have like a bit of a miss or you know, extra
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  things at the end or whatever. That's the way I like to do it.
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  I know it's nice sometimes if you have like break it out by
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  like floors or rooms or phases of a project, but that's kind of
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  chronological as well. But this is the nicest way that
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  I've found to do it. And of course, details matter.
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  The more detail you can put on your, your scope of work, your
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  proposal, the better. The more the client is going to
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  believe that you've done your due diligence, you've done your
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  homework and the trust is higher.
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  Even if for you it doesn't seem like I don't need to, like,
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  specify every little detail or go over all of this stuff, it's
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  going to take a lot of time and work.
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  Yeah, you have to find that medium.
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  But ultimately, if someone's presenting a proposal and it
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  says framing, you know, whatever 30 grand as opposed to yours, it
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  says, you know, framing materials, sheeting, lumber,
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  trust package, you know, whatever, like you've got it
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  more detail and then 30 grand. It's just going to seem like
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  mores included and that you've done more than your number is
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  more real because it shows everything that's included
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  there. So you know, it's making sense.
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  Does that make sense? If you have any questions at
• 12:58
  all, truck or comment below. A lot of you know, reading your
• 13:01
  comments grief me, don't agree with me, still love it.
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  Drop your comments, I will respond.
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  All right. So that takes care of the
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  numbers section. Now moving on to #4 so 4 is
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  contract ready. When you go into this proposal
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  meeting and you present a proposal, it you should be ready
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  to sign a contract on the spot or that day.
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  And this means having templated contracts and very easily plug
• 13:28
  and play, ideally doing this through some sort of cream
• 13:30
  software so that it's all kind of set up and ready to go.
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  You can collect digital signature signatures, you'll
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  attach plans, schedules, pictures and selections.
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  So anything pertaining to that project should be attached as
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  addendum or some other additional document that's
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  mentioned in the contract, attached to the to the actual
• 13:52
  contract. So when they sign, it's like
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  these are the plans. This is the schedule, this is,
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  you know, whatever pictures and selections that you've you've
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  you've selected and approved so that there's as little Gray area
• 14:05
  as possible. And if you ever need to go back,
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  it's like, well, these were the plans when we sign, we've
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  changed the plan. So now you know, this change
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  order is relevant or, or whatever, right?
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  So make sure that your contract is ready when you go into that
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  proposal meeting or you can at least get their verbal
• 14:23
  commitment and easily get them a contract that day or within, you
• 14:28
  know, a couple an hour or two, whatever it may be.
• 14:32
  Clients love speed. Everybody loves speed and
• 14:34
  convenience nowadays. You want to make it easy,
• 14:36
  simple. And if they've made that
• 14:38
  agreement and are ready to move forward, they should not be
• 14:40
  waiting for you at any point. It should be let's go, let's get
• 14:44
  this done. Let's move forward with whatever
• 14:46
  it may be All right, quick one there number 5 all right, 5 is
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  the things to not forget. So don't forget this on your
• 14:54
  proposals or in your contracts because it can come to bite you
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  in the ass and really just, you know, burn a lot of your money
• 15:03
  potentially or goodwill with clients.
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  So the first thing is you need your inclusion.
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  So what does this include? What kind of, you know, this
• 15:11
  include a warranty? Does this thing you know, are
• 15:14
  all materials and services included?
• 15:18
  What's all included in this? And then exclusions are a big
• 15:21
  one as well. What's not what's not included
• 15:24
  is it no permits excluded is obviously like rot or fire
• 15:30
  damage or unexpected circumstances.
• 15:33
  Want to have your terms and conditions in there of what are
• 15:37
  the terms when you know if they accept this in 60 days, is it
• 15:40
  still valid? You know, you want to have a
• 15:43
  window for accepting of, of the proposal terms of it warranty
• 15:48
  you're mentioning what's your warranty?
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  Are they getting, you know, one year on this, three-year on
• 15:51
  that, five year on on foundation or 10 year or whatever may be.
• 15:56
  And then list the responsibilities of the builder
• 15:59
  and of the client. So you know, communication, fast
• 16:02
  decisions, whatever it may be, you want to have a list of
• 16:06
  responsibilities and things like that.
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  If you need help with this, reach out to us.
• 16:12
  We've got lots of documentation that helps contractors with this
• 16:15
  whole thing gets the other proposal that we do work with
• 16:18
  clients building out these processes and things.
• 16:21
  There are links in the description below, so make sure
• 16:23
  you're checking on that. We've got an estimating template
• 16:26
  stack which has the templates for estimates for walk through
• 16:31
  and walkthroughs as well as SOP's and things like that.
• 16:34
  So check out the links in the description.
• 16:35
  We've got a bunch of great resources there.
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  All right, number 6. There we go.
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  Number six, the closing page. So this is like the kind of the
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  nice ending to the whole proposal.
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  As you can see, this proposal is going to be somewhat of a
• 16:51
  document. It's not just like a couple of
• 16:53
  pages with a bunch of squiggly lines of estimating and numbers
• 16:57
  and stuff like that. This is a proposal that that
• 17:00
  should be proposing. I think if you're proposing for
• 17:03
  marriage, you're not going to dress up in, you know,
• 17:07
  sweatpants and and an old cut off tank top shirt or whatever,
• 17:11
  right? So put your best foot forward,
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  dress your proposal up, make sure that you're communicating
• 17:17
  well through the proposal, putting on a really
• 17:18
  professional, really professional phase two proposal
• 17:24
  because you're going through all that work with estimating,
• 17:27
  working with the client, getting to this point.
• 17:30
  And then if your proposal falls flat, you're just, you're
• 17:32
  shooting yourself in the foot. So make sure it looks good.
• 17:35
  Closing page. So I'm closing page.
• 17:37
  You want to have something that asks them.
• 17:39
  If you have questions, please express them to us.
• 17:42
  We'd love to, to let you know to, to answer any of your
• 17:45
  questions. So ask for feedback, ask for
• 17:47
  questions. Make sure it's very clear that
• 17:49
  you, this isn't like an open and shut case.
• 17:51
  This is a discussion and you're more than happy to fill in any
• 17:55
  gaps or, or explain stuff. If something wasn't clear, have
• 17:59
  a couple of testimonials in the in the closing page.
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  So it's like, Hey, these are all clients who have been in your
• 18:07
  same shoes. We presented a proposal, they
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  move forward and this is the great things that they have to
• 18:13
  say about us, right? So it just, it builds that
• 18:15
  social trust, that proof. It kind of puts them in that
• 18:18
  group of like, do you want to be like our other clients who had
• 18:21
  an amazing experience and move forward and work with us?
• 18:24
  And then a few like next steps. You don't have to go like way
• 18:28
  into the future, but next steps is like once if you have any
• 18:32
  questions, please let us know If you're ready to move forward, We
• 18:36
  will send you a construction contract agreement that you can
• 18:40
  sign. And then we'll go through the
• 18:42
  onboarding process and and, you know, schedule your project and
• 18:45
  let you know when we can get started kind of thing or
• 18:47
  whatever. A few next steps so that you're
• 18:50
  always kind of pregaming them for this is a natural, you know,
• 18:53
  this isn't a stopping like Start Stop gate.
• 18:55
  This is just a natural kind of next step to get to the next
• 18:59
  steps making sense. So as mentioned, get the free
• 19:03
  templates in the description below.
• 19:05
  I will see you on the next video and as always, thanks for
• 19:08
  watching.