Can You Answer These Questions About How You Do Business?
June 25, 2018
By Shawn McCadden
One way I help my clients remodel how they do business is to first get them to actually document how they’re doing it now. Most they think they know how until I start asking clarifying questions as they attempt to explain. I did this exercise one time with a business owner and his management staff. The owner told me before we started how impressed I would be with how they do things and work as a team. About 30 or so minutes into the meeting he came to realize only he knew how to explain it and none of his staff were on the same page as he. In a frustrated tone, he then asked his staff, “How does anyone around here get things done if none of you can explain how we do business?”
One employee quickly jumped in and said something like, “Well, we have to ask you every time and it seems you have a different answer each time, so we stopped assuming and decided to just keep asking rather than risk being wrong.”
Below is a list of considerations regarding how you can do business as a contractor. The list starts with an initial inquiry from a prospect and is broken out by typical steps in the process up through wrapping up the project. There are many considerations for each step depending on the type of work you do, who your target customer is, and how you do or will decide to do business. Keep in mind your decisions in each step can or will affect other steps.
Please assume this to be a partial list. I hope you find the list to be a helpful way for you to get started thinking through how you do business.
Steps related to selling and completing projects
1. Original contact
• How will prospects contact your business and how will your business respond? You will need ways to respond to inquiries from email, voice mail, showroom/office drop-ins and or your website’s contact page. One goal of this step should be to manage prospects’ expectations about what will happen next and when.
2. Initial phone conversation
• Who will call the prospect back and when?
• Should it be a trained gatekeeper or the salesperson?
• What are the purposes of the initial call, for the prospect and for the business?
• How will the business decide whether to agree to a first sales call?
• Will your business establish and agree to an agenda and purpose for the meeting before you commit, or will you figure that out when you get to the prospect’s home?
3. First sales call
• Will this be at your place of business or the prospect’s home?
• Who has to be there besides your business, and how will that be decided?
• How long will the first visit take and why?
4. Decision time
• What does the business need to know about the prospect and their project?
• Will you have them make a decision about whether your company is a good fit before or after you commit to and invest hours of your time developing an estimate and or proposal?
• Will you require them to share their decision-making process about the project and price before you attempt to get them to make a decision, or will you deal with all that at the same time you are expecting them to make a decision?
5. Deciding if the prospect and project are qualified, and if so for which service the company offers
• If they are not qualified how will you let them know?
• If they are qualified what will you offer them?
• Before you commit to preparing a proposal, will you require them to commit to a presentation meeting or are you willing to hit Send and wait to see what happens?
6. Design/preconstruction agreement with a fee or free estimating and proposal generation
• Will you charge them to create plans and specs, create them for free, or expect them to already have plans and specs?
• If you will offer design, how will your process work, when does it begin and end, and what does it include?
• How much will you charge, and when will you collect the money: in full before you start, hourly as you go, after you already did all the work, other…?
• If you create plans and specs, who owns them?
• Will you leave them behind if they do not buy from you?
7. Proposal presentation meeting
• Who has to be there and if not there will you automatically reschedule and take your package with you?
• Are you expecting a decision at the meeting? If so, what should/will your business do to help them make a decision?
• If not expecting a decision at the meeting, how long is your proposal and price good for?
• If you charged to prepare the information, will it be applied to the project price or is it considered a separate fee and service?
8. Pre-construction and pre-staging
• Will you expect all product selections be made before offering a fixed price?
• Will you schedule the job if there are any open selections to be made?
• Will you get enough money at deposit to pre-stage the job with required materials, will you use your own money to pre-stage, or will you wait until you start the job to gather the materials?
• Will you require clients attend and participate at a preconstruction meeting?
9. Construction
• What type of payment schedule will you use: % complete, milestone based, time based?
• Will you finance the job for the client by billing after you complete a milestone, or will they need to pay you in advance for each milestone so your company always has positive cash flow?
• Will you use a production manager driven system to get the work done, or a lead carpenter driven system?
10. Project wrap-up
• Is the final payment due on completion or substantial completion? Do you know the difference?
• Will you allow a punchlist or require a pre-completion list?
• Do you have a process and supporting form you and your customers can use to both agree and confirm the project is complete?
11. Warranty
• When does the job end and the warranty begin? (What does your contract say about this now?)
• Have you clarified warranty responsibilities depending on who provides the materials?
• Will making the final payment be a condition of doing any warranty work?
Shawn McCadden is a consultant, educator and speaker who offers business consulting and coaching services for remodelling business owners who want more for and from their businesses and their lives. He also consults with construction-related product manufacturers and suppliers, helping them understand, find, educate and better serve remodelers. Check out Shawn’s website http://www.shawnmccadden.com/ and blog www.shawnmccadden.com/Subscribe-to-The-Design-Builders-Blog.
