I’ve recently been attempting to create some sales aids to sell SCA’s as well as other remodeling services. Jon’s thread about asked about the mechanics of the SCA . That led me to this question: What are the benefits of an SCA?
I ask that question because SamT, and many others have consistently re-inforced the idea that when we are talking to clients, we have to be selling the benefits of the service, not the actual service.
Sonny’s document “The Process” digs deeply into the subject and at first glance seems to be a good marketing material. Upon second thought though, I’ve decided that it is best used as an oveerview of the remodeling experience and as addittional material to support some sort of power point slide that will show the benefits of an SCA.
So, my goal of this thread is to draw out all the benefits of an SCA. Once I get the laundry list of the benefits, I’ll figure out how to portray those benefits in picture form on a short series of slides.
The most obvious benefit of an SCA is that the contractor gets paid for work that he used to do for free, but I don’t think that’s going to get a client excited….
blue
Just because you can, doesn’t mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I’m a hackmeister…they might be right! Of course, they might be wrong too!
Replies
blue..
the client that is goping to pay for an SCA or a Proposal is interested in hiring a pro who can reassure them in this evil world
the client has no idea how the contractors do business.. and the contractors have no idea how they do business.. it's all based on guesswork.
ask yourself who created the way houses are contracted for ?
basically it was the Master Builder.. who eventually became the Architect.. who eventually started hiring General Contractors..
who decided that "Free Estimates" should become part of the ad?
who knows what "Fully Insured " means?
it's all hokum..i'm a Pro.. i decide how i'm going to conduct my business within the scope of the law..
my clients never flinch when i tell them i'm going to charge them to pepare a Proposal.. it just rolls off my tongue.. occasionally i don't charge.. and guess what.. it usually gets screwed up..
i recently spent 10 hours figuring a bath remodel for my former piano teacher.. when i got done .. she was embarrased.. the price was two or three times what she had in mind.. i could have saved us both some time and embarrasment if i had told her i wanted $200 to prepare the Proposal.. because then we would have gone thru the process and the word "BUDGET" would have been discussed..
charging for Proposals also means that i'm committed to creating the Proposal... it's contractual.... not charging is harder for me to focus.. there are only so many hours in the day.. shopuld i work on the ones that will pay me... or the ones i hope will pay me ?
and.. ABSOLUTELY.. any DESIGN work has to be paid for... it's a service that costs money and has value... ANY DESIGN WORK !
but... i charge for the Proposal even if there is no design work on my part
Mike, you're preaching to the choir and I can relate to your wasted efforts.
The problem that I'm trying to solve is the exact verbage of what the benefits are to your client.
I think your opening sentence started to describe a benefit but you didn't sum it up in a sentence that I can tell a client.
"the client that is goping to pay for an SCA or a Proposal is interested in hiring a pro who can reassure them in this evil world
the client has no idea how the contractors do business.. and the contractors have no idea how they do business.. it's all based on guesswork"
I'll try to sum up your benefit. "When you purchase a SCA from me, you'll avoid evil contractors."
I've cleverly shown the benefit in bold. That is the raw idea, now I'll try to refine the language and add pictures.
Thanks.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
"I'll try to sum up your benefit. "When you purchase a SCA from me, you'll avoid evil contractors.""Warning, Warning, Danage Will Robinson, Warning, WarningBull #### Alert, Bull #### AlertWhat law in the universe keeps an "evil contractor" from selling SCA's.
think that applies to more than one statement.
bobl Volo, non valeo
Baloney detecter
Mike! Sorry, I almost overlooked this benefit; "...charging for Proposals also means that i'm committed to creating the Proposal".
That means that I would tell them "When you commission me to do an SCA, you get the benefit of my undivided attention to your project. Your dream project gets moved from the exploratory phase into the commencement phase. In essence, we are moving your dream forward into the reality phase.
Is that a benefit? I think so.
blue Just because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
blue....i'm a stickler for truth..so.....
<<<That means that I would tell them "When you commission me to do an SCA, you get the benefit of my undivided attention to your project. Your dream project gets moved from the exploratory phase into the commencement phase. In essence, we are moving your dream forward into the reality phase.>>>
i ... personally.... could never say ( suffering from ADD as i do ) that they would get the benefit of my undivided attention...
they would become part of our system , of which I am the major constraint ( remember "the Goal " )....but then ..i'm also the guy in charge of everything.. so they get me... a little bit at a time.. until it's done
it's lunch...so far today i've worked on 6 different jobsMike Smith Rhode Island : Design / Build / Repair / Restore
I'll bite.
H/O gets a rock solid price on developed plan.
Not a ball park on what he thinks he might want.
It takes the guessing out of the equation. The h/o wants to know what he needs, after all that is why he is hiring you right?? SCA allows you to develop for them, a directive, a plan to get them from where they are to where they want to be, and the ability to have your ear for selections as opposed to being told (or not!) what will be spec'd.
H/O may open to doing this themselves, but at what cost and how?? They don't know the products or the techniques. That is what they are paying you for.
I believe it was Sonny that says that if they want bids for free, that's exactly what they will get, and they will be worth every penny they paid for them. Every single penny!!
As a proffesional contractor Mrs. Blue, I have found through my years of experience in the industry, that it is an absolute neccesity for the contractor to be able to spend a sufficient amount of time with the h/o and other associates to develop a well thought out plan, in order to complete a project such as yours with in a timely and professional manner, as well as within your budget.
Through this process I am able to guarantee excellent results, the like of which will make you ultimately satisfied as a consumer, and me proud of my workmanship as a tradesman.
Sign here please!!
Eric
I Love A Hand That Meets My Own,
With A Hold That Causes Some Sensation.
[email protected]
BTW Blue,
didja send the book out yet??
EricI Love A Hand That Meets My Own,
With A Hold That Causes Some Sensation.
[email protected]
No Eric...I'm hogging it!
Actually, I just retrieved it along with a couple others that were out of the library. I was feeling a bit guilty and was considering sending it by buying a new copy from Amazon and just mailing it direct but for some odd reason, I wanted to send Mike's copy....call me weird, it just seemed important.
I've got it in my possession and will send it tonite or tomorrow morning.
Sorry about the delay.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
I'll bite.
H/O gets a rock solid price on developed plan.
Not a ball park on what he thinks he might want.
The benefit would be: a fixed price on the developement of the plan from dream stage to paper.
It takes the guessing out of the equation. The h/o wants to know what he needs, after all that is why he is hiring you right?? SCA allows you to develop for them, a directive, a plan to get them from where they are to where they want to be, and the ability to have your ear for selections as opposed to being told (or not!) what will be spec'd.
The benefit would be: We act as your expert and consultant which blends the design process and value engineering into a package that delivers your dream at the lowest possible cost.
H/O may open to doing this themselves, but at what cost and how?? They don't know the products or the techniques. That is what they are paying you for.
The benefit is: Our expertise is available to you.
As a proffesional contractor Mrs. Blue, I have found through my years of experience in the industry, that it is an absolute neccesity for the contractor to be able to spend a sufficient amount of time with the h/o and other associates to develop a well thought out plan, in order to complete a project such as yours with in a timely and professional manner, as well as within your budget.
The benefit is: "Mr Homeowner, the tendency for most contractors, when developing "free estimates" is to rush through the task, knowing that every hour spent might be a huge waste. Instead of devoting the appropriate amount of thoughtful time into designing your dream, they rush through trying to minimize their possible loss, which would occur if you choose another contractor. When you contract with us to develop your bid package, we spend a sufficient amount of time to properly plan your project.
Through this process I am able to guarantee excellent results, the like of which will make you ultimately satisfied as a consumer, and me proud of my workmanship as a tradesman.
Excellent ideas Eric. I'm sure there are more....Just because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
blue....
<<<delivers your dream at the lowest possible cost.>>>
why discuss cost ? at this stage anyway... perhaps cost has little to do with it.. perhaps reassurance is more important..
dreams and "lowest possible cost" are not always compatible.. matter of fact i would imagine that "lowest possible cost" automatically excludes me
value engineering does not exclude me.. but it isn't synonomous with "lowest possible cost
Mike Smith Rhode Island : Design / Build / Repair / Restore
<<<delivers your dream at the lowest possible cost.>>>
why discuss cost ? at this stage anyway... perhaps cost has little to do with it.. perhaps reassurance is more important..
dreams and "lowest possible cost" are not always compatible.. matter of fact i would imagine that "lowest possible cost" automatically excludes me
this is a good point, but part of the purpose of doing an SCA would be to put some hard numbers on what have only been ideas up to this point. maybe when discussing costs it would be good to say something like.......
"We can flush out a reasonable dream project buget and then look for savings in certain areas if you would like to reduce costs. Or, alternatively, we can give you a no-frills buget and include some options to upgrade. How would you feel most comfortable proceeding?"
(previously known as Bunny - the only time i've ever changed to calm my boyfriend)
Edited 4/8/2005 6:05 pm ET by lucky penny
SCA update: even though I bungled my way through the selling of the SCA process as bad as anyone could, I just got my first order for one. This one is priced at $2500.
blue Just because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
Blue,
Congratulations.
Tim
lucky.. my Proposal is not going to list a lot of itemized things.. i think SOME of the detail that you were describing is unneccessary and only confuses the issure..
i give specs on all of the things i think are germaine..
think of an editor helping an author to hone his 700 page manuscript down to a readable 300 pagesMike Smith Rhode Island : Design / Build / Repair / Restore
I don't think I was very clear about what I was expecting, so let me try again.
I'm not saying that I was expecting for a bsmt reno the kind of detailed spec that a big company would put together for a hospital project for example. I just mean that I think breaking up the quote in such a way that the HO and the design/builder can talk about where the big ticket items are, what the basic materials are and where they could up-grade or leave out or make a substitution. In situations where they may be talking to other people as well about the work, they can see not only have you given them a price but they can see a little better how you came to it.
For example a price....
for all the plumbing (and then in point form what the work is to be done)
the fixtures
all the electrical (ditto)
the light fixtures
the floor (whether patch or new or insulation or no and the finish)
the walls (insulation or no)
built in furniture and cupboards (what materials? solid oak/particle board?)
any other service like emptying their bsmt and storing the stuff for them
hourly rates and estimated hours
total
This way when they say mmmm well that's kinda high, you can say well you asked for solid oak furniture, how about I do it in pine instead, or oak veneer?
We're talking about how to sell an SCA and I just think that in the future this is an arguement that I would use. That it's a way to make sure the HOs are clear on what you're going to do before you do it and how much each part is going to cost. I think it's got to be less stressful all around.
Sure there are people who say oh just go ahead and do it, but they are probably people who have never done it any other way and can't anticipate what kind of questions they might have when things get going.(previously known as Bunny - the only time i've ever changed to calm my boyfriend)
<<<
For example a price....
for all the plumbing (and then in point form what the work is to be done)
the fixtures
all the electrical (ditto)
the light fixtures
the floor (whether patch or new or insulation or no and the finish)
the walls (insulation or no)
built in furniture and cupboards (what materials? solid oak/particle board?)
any other service like emptying their bsmt and storing the stuff for them
hourly rates and estimated hours
total
This way when they >>>
that sounds more like a hunting license than an SCA. i don't think Sonny intends to break down a price that way...
i know i will not break down a price that wayMike Smith Rhode Island : Design / Build / Repair / Restore
Well then tell me what you are talking about. Tell me how you would break down a price.
First, you are accusing me of wanting a manuscript, now you're accusing me of being what exactly I'm not sure, a lazy vacationer?. How about fewer dismisive remarks and a little bit more helpful advice.
(previously known as Bunny - the only time i've ever changed to calm my boyfriend)
Edited 4/8/2005 10:28 pm ET by lucky penny
I'm going to be interested in where this thread is heading.....
Mike, is it possible that you could post your style of SCA. Just change the names and numbers of an acutual project?
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
blue.... i don't do an SCA..
i tell the prospective customer that i will prepare a fixed price Proposal for their project.. ( no design work involved ).. i will charge them $x to do this..
the one i'm working on now i charged $400..
i was to break it down into roofing, window replacement, and siding.....
since exploring the scope.. i've decided that i will give them a price for roofing..
and one price for combined window and siding..
since that is a big nut..
i will break it down into 5 prices... roofing, east elevation, north, south & west elevations.... that way , if they want to do it on the installment plan, they can
but the trim , siding & windows are all so inter-related that i won't break it out..
it would be stupid to do the siding without replaceing the rotten windows.. and it would be stupid to replace the windows withoput replacing the leaking siding..
but i'm not going to seperate my labor.. and my markups .. and the cost of the siding.. and the cost of the windows.. blah , blah , blah
i will give them what they need to make value judgements..
here's how much i will charge for this scope.. and here's how much i will charge for that scope
and miss penny... you want some more info , you'd best get off your high horseMike Smith Rhode Island : Design / Build / Repair / Restore
Would you stop poking me! There's not a high horsy bone in my body and anybody who's ever crossed my path would tell you that but how can you blame me for getting steamed you've chucked insults at me ever reply you've sent me.
What's your problem? (previously known as Bunny - the only time i've ever changed to calm my boyfriend)
blue.. i'll look over some of my old ones... and post it up.. i don't want to post any that are too current.. it would amount to arroganceMike Smith Rhode Island : Design / Build / Repair / Restore
i don't want to post any that are too current.. it would amount to arrogance
Mike, why would posting a current item be considered arrogant? How is it possible that something that is real, is arrogant?
Take it easy on Penny, she's just trying to figure all this out too.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
Blue--
Sorry I got here late on this one; I just speed-read through the whole thread and unless I missed it somewhere, nobody's mentioned what looks to me like the most basic benefit to the client of the 'SCA' (I call it a 'DCA' for 'Design and Cost Analysis). It makes sure both the contractor and the client are talking about the same project.
I bill it in hours; whatever time it takes me to produce needed drawings, do product research, materials pricing, and labour estimating--all those hours are billed as DCA on my invoice. I don't drive a nail or rip off a shingle until the drawings and e-mails have gone back and forth as many times as necessary and both sides agree that this is what we're going to build....
As Mike has stated several times, I find this an essential filtering element to save me from wasting my time. (See the thread 'NO MORE FREE ESTIMATES, DAMMIT!' from last year.) The fact it also saves the HO's time is (to me) incidental and secondary...but it does save his time as well. That should be worth something to him.
My DCA is produced to make sure that I'm going to build what the HO wants. It does not promise a fixed price or time frame. It does specify my labour rates for the duration of the contract, and the amount of markup I charge for materials. It also estimates the number of man- hours I believe each phase of the project will require (but does not guarantee that number) so the customer can make his own cost estimate from my cost analysis.
Dinosaur
'Y-a-tu de la justice dans ce maudit monde?
Thanks for getting in here Dino. You're not late, your right on time!
"It makes sure both the contractor and the client are talking about the same project." certainly is the result. It solves one of the biggest problems that occur in the remodeling industry. I don't think it's the benefit though. I'm going to try to re-phrase this because I think that you're statement is the heart of the DCA idea.
Here's my thought process using your statement.
"Mrs Homeowner, remodeling projects are notorious for creating homeowner-contractor conflicts. The reasons for this are complex. In our experience, we find that we can create a professional relationship with you by first carefully crafting a detailed DCA. It makes sure both the contractor and the client are talking about the same project. That statement is so critical, I'm going to repeat it: It makes sure both the contractor and the client are talking about the same project. As a result of this extraordinary effort to inform and address problems before they occur, your project has the highest possible chance of proceeding smoothly, which eliminates the stress and conflict that quite often occurs with major remodeling projects. You gain significant peace of mind knowing exactly what is going to be done and what it is going to cost."
Thanks Dino. That statement is great. When I create my PP slide, it will show a picture of the homeowner dreaming about their project. In the four corners of the slide will be four different contractors, each with a different dream. As I say the words "It makes sure both the contractor and the client are talking about the same project." I will switch the slide and show the same homeowner with the same dream but this time, each contractor in the four corners will have the same dream!
blue
Just because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
Blue, one thing I noticed in reading your major posts in this thread was my reaction to your carefully crafted sales presentation. I find myself being put off...even though the content of what you're saying is basically the same thing I say myself when meeting with a client. So I asked myself why?
Well, Power Point and prepared scripts are way beyond where most remodeling guys I know ever go. I am getting that 'I AM BEING SOLD SOMETHING' feeling I get whenever a pushy salesman anywhere starts to work on me. Is it the media you are choosing to use in your presentation? Is it the 'prepared script' wording?
I dunno for sure. I am pretty sure this kind of approach would not work for my business. If I showed up with a laptop and projector and started setting up to do a big presentation, I have a feeling I'd price myself right out of being asked for an estimate before I got all the extension cords plugged in.
So is this a function of project size? Most of my projects fall in the range between $1000 and $35,000 with the bulk noodling around the 8-10G mark. If I show up for a first meet with a Class I ladder on my truck, a tape measure, a couple of sheets of photos out of the brag book, and a pad of graph paper with my company name and phone printed on it (which I leave behind after we've done doodles on it!) I am looking very pro by the standards of this area.
Or is it a function of project type? If I were looking for a contractor to build me a custom house, now that laptop and hour-long presentation doesn't seem so out of place.
Is your kind of presentation pretty much obligatory in the US these days? Am I still 'dinosauring' my way through the prehistoric sales jungle?
Anyway, just my personal reaction. (I do tend to be a salesman's nightmare, admittedly.)
Dinosaur
'Y-a-tu de la justice dans ce maudit monde?
Dino, you are misunderstanding what I am doing with this PP.
Understand that the PP is an internal training document/slideshow. It's not something I intend to pull out every time I have a face to face sitdown. I will however use it to teach my salespeople the entire theory behind making the remodeling sale.
After the power point is created on the computer, I will print out each slide and slip them into a presentation book. This book will be with me when I do the sitdown with my clients, or, more correctly said: when my sales rep sits down with the client.
The purpose of printing out the PP point will be to have that material available as the presentation evolves. If the conversation is going smoothly, and the words are flowing and there's obviously a lot of mutual understanding, these slides might remain hidden. But, when a topic seems to need further explanation, the slides will be available to be taken out of the presentation book and placed on the table. The slides them selves will be visual aids which tell the story in picture form.
Also Dino, understand that we are attempting to target larger projects, 50k and up and it is my opinion that we can't possibly look too sophisticated for these presentations. I think the more resources we have, the better, but I still don't see a computer presentation in the works...yet.
I might drag a laptop in during the SCA and DCA. If I found useful techical info, like say a short dialogue on the dangers and uses of foam insulation, I might consider that. I'm not that far into my remodeling career yet though!
Thanks for the warning though, everything you said rings true to me too!
blue
Just because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
Okay, now it makes sense. In-house training using these kinds of AV aids is something I'm quite familiar with (I'm frequently on the receiving end of it during my winter employment for a major ski centre). In fact, I think it's probably an improvement over the old overhead projector/flip-chart stuff we used to see in that it can be made more interactive.
I'd like to work my way up to the $50k project level eventually and seem to be headed that way slowly in spite of my lack of enthusiasm for sales; but my real dream is to reverse what you're doing and get out of renovation and build one spec house per year which I design and build and sell with no interference from anybody.
Now, is that a dream...or a nightmare, LOL??Dinosaur
'Y-a-tu de la justice dans ce maudit monde?
but my real dream is to reverse what you're doing and get out of renovation and build one spec house per year which I design and build and sell with no interference from anybody.
Dino, if that's your dream, what is stopping you? You can start the process today if you really want to do that.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
Ohhhh, man, you don't wanna know all the things that are conspiring to stop me. Like the phone call I got from my lawyer at 4pm today which is good all by itself to keep me from sleeping for the next 15 years or so....
The short answer is the $$$ to build that first one. But you already knew that.
Gotta log off. Expecting (hoping for) phone calls from a couple of high-profile hired guns to help in the next round of my custody battle for Ryan. Things are not going well, and I've got a feeling they're gonna get even worse before they get worse....
Dinosaur
'Y-a-tu de la justice dans ce maudit monde?
The short answer is the $$$ to build that first one. But you already knew that.
Dino, the dollars are near you somewhere. Your "problem" is quite solveable, if you decide to solve it.
Assuming that you actually have the ability to spec a house, the obvious answer to your "problem" is very basic. You have to solve someone elses "problem".
The other guys problem is the reverse of yours. He has the $$$, but doen't have the ability to spec a house. By combining your assets (you have the ability, he has the $$$$), you have the solution.
You need to find someone stuck at a job that they hate and make an offer that they can't refuse. At this point in time, there are a lot of people that would love to diversify their investments. The memory of getting burned by the dot.com bust is still fresh in their minds. When you find someone that lost a half million cash in their 401k's, you're probably talking to someone that might be inclined to offer their cash, or credit line to fund a spec house.
If you pose this suggestion to most tradespeople, they'll immediately sound the alarm about "partners". They obviously don't know about limited partnerships.
Don't let negative thoughts stall your entry into the spec business. Instead, run the numbers thoroughly and let the facts tell the story. When you run the numbers, carefully look at both the actual current costs and recent sales. Get a comptetent advisor to do comps for you if you don't know how.
If things are selling in your region, this is not a hard business to get into. There's a guy in every office wishing he had a way out, dreaming about being in business for himself. You can find investor wannabes at every REIA meeting all over America. Do a google search and attend a meeting.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
not to rain on yer parade there Blue ...
But if what U just typed to Dino is true ...
why ain't U a millionaire several times over yet?
U sound like every other late nite "instant millionaire" commercial. Money makes the world go round .. and if U ain't got it ... someone's not sitting in their cubical just waiting to give U some of their's.
what's next ... U gonna tell us how to turn our debt into profit!
Never pay taxes again ... something along those lines?
Yer dreaming too much, buddy.
Jeff Buck Construction
Artistry in Carpentry
Pgh, PA
Jeff, remember, many, many, many, many people became/become millionaires from taking advice from those who weren't or are not. I have three siblings in my family who are millionaires from taking the advice form our Mother and Dad, who came here broke from Greece around 1920, yet ended up doing pretty good for themselves. Oh, and a nephew who last week while visiting us fro Chicago attributed his substantial wealth to my advice about 20 years ago.Notice I don't have a slew of employees, nor have I franchised my business format, yet I periodically get emails from those I have "advised" who are or have done well.
it's still chasing rainbows and looking for the pot of gold.
Dino said he's got severe cash flow problems at the moment ...
wishful thinking don't make that go away.
Jeff Buck Construction
Artistry in Carpentry
Pgh, PA
Jeff,
At the risk of Blue kickin my azz, I'll say this.
It's a little better than wishful thinking, and maybe the toppic for a new thread.
Theoretically, what he is saying or suggesting is sound. You need to make this effort your job though, and that's where things start getting sticky. You need to have capital, or a place for free to sleep and eat.
Example.
Guy I know just purchased a peice of land in an OLD development. When the development went in, these lot(s) did not sell cause they sucked. Read HOLE.
Fast forward 20 yrs, lot(s) have been on the market (Hot, Hot, Hot) for almost a year as "difficult" lots.
Guy looks at them, (it), goes to the county clerk. It's actually TWO buildable lots, subdivided 20 some od years ago.
Good!
But wait, it gets better.
He does a little poking around and finds out that the lots have BOHA from way back when. Engineer says fine, but maybe I'd like to do a quick perk, just to check..........
Asking was 80K. He's in contract for 60K. Put up 6k.
He can flip them (can't list with MLS cause he doesn't own them) at ONE closing.
He will sell them for 150k EACH. And he can do it for less than 20k. His deposit, some emgineering and closing costs.
Not bad for a couple of months work.
Eric
ps I DON"T disagree with you Jeff. I live where you are. Just keep your mind open. You have some good sales stategies. Turn them around to make things like that happen for you.I Love A Hand That Meets My Own,
With A Hold That Causes Some Sensation.
[email protected]
not trying to be positive or negative ...
just shooting for realistic.
yer mileage may differ.
Jeff Buck Construction
Artistry in Carpentry
Pgh, PA
Eric, I don't agree that you have to make "this effort your job". For some types of deals, yes, it will have to be your full time job, but there are a ton of others than can be done partime.
Let's look at your example. You're talking about a guy that found some lots that were on the market at 80k. The actual market value of the lots is 300k. That represents an equity position of 220k. Keep that number in mind, because it is the core of the issue.
Lets assume that the fellow that discovered that property and it's ensuing value didn't have a nickel to rub together. Lets just say, he worked the cashier's job at the gas station and barely made his bills each week. How would he secure this deal? He doesn't have the 6k to put it under contract. What does he have?
That's the main point. What does he have?
The answer is critical: he has knowledge. He has an idea. He's thought of a way to create value where everyone has saw none.
How can he capitalize? It all depends. If he's been practicing negotiating skills, he might be able to put that property under an option contract for as little as $1. Do I think that is probable? Not really, but it's possible. Would he get that seller to take a 60k offer on an option for a buck? Probably not. What if he offered full price though and asked for a very short time frame of one week? Why would a seller say no? If the seller can still keep the property on the market and take counteroffers, I don't see any reason why the seller would say no.
Lets assume that the seller takes the option offer and pockets the buck, thinking that he'll either get to buy a lollipop or sell next week at full price. The poor cashier now has what? He is out a buck, but he has a week to find funds to do this deal.
Where would he go? Well, I don't know about you, but my newspaper is filled with people trying to buy real estate. There are tons of people that are looking for investment property.
What is the cashier selling? He's selling his option contract.
What is the option contract worth? I'm guessing that it's full value is 300k less the 80k selling price and about 10k worth of engineering and closing costs. That makes the equity position in that piece of paper worth about 210k.
I'll say this. If he walked up to me and offered me that contract and demanded 10k for it, do you think I'd buy it? Hmmmm, 10k for 210k of equity, secured by real property? I think I'm interested.
To illustrate how valuable these types of contracts are, I'll tell you a little story. I was attending a real estate investment meeting in Oakland County, MI (a wealthy suburb of Detroit). At some point in the presentation, the microphone was offered to anyone that had any announcements. A guy walked up and told a story of having a buy contract on a property that was heading into foreclosure. After explaining the current market value and explaining the purchase price, he mentioned that he didn't have a way to close the deal and he was interested in finding someone to partner with him to solve his money dilema. Since the equity position was substantial (I think it was around 50k) and the deadline looming, he needed help. As he walked away from the podium, I saw at least 20 investors stand up and walk over to make the deal with him.
The point is that we all tend to exist in our own reality, not fully understanding that other people have different realities. Once you understand that their money problems aren't the same as yours, you'll be able to structure a win/win proposal.
My Son in Law had a conversation this year with an investor that wants to do something with him. The old guy told him this: "Over the years, I've done a lot of things. I got lucky on some of the things and made a lot of money. I don't want you to take this the wrong way, but I've got a money problem. Dont get me wrong it's not a bad problem, it's a good problem. I've got more money than I know what to do with it. I'm constantly looking for good ideas to invest in. They are hard to find, and then finding good people, people that I can trust is even harder." They were discussing an idea that my SIL has and he is very anxious to fund that idea. As soon as they relocate, they will start that venture. I'm also going to be prticipating and funding that venture as a limited partner.
Eric, understand that some ideas take a lot of time, others fall into your lap. The key point is to be ready and willing to capitalize on an idea. If it's truly a profitable idea, someone will fund it. If it's a dog, only a fool will fund it. Most people with money can tell the difference. It's your job as the "idea creator" to properly research and present the facts. IF you do your job, getting the money is easy.
And yes, I'm doing all of the things I'm talking about. I'm not dreaming it, I'm living it.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
Jeff, that pot is here.
here too!
but nothing happens without money first.
here or there.
don't try to read too deeply ... I was just commenting on Blue's advice to Dino.
borrowed money is still money.
banks don't loan money unless ya got money.
nothing's free ....
if all those "no money down" video's were right we'd all be rich.
Jeff
Jeff
Jeff Buck Construction
Artistry in Carpentry
Pgh, PA
Jeff, I'm more inclined to be in your camp on this one. I never borrowed money to start any of my several businesses; just started very small each time and worked up in size until it no longer made sense for my then current situation. At which point I sold out, took a break, and started something new....
My now current situation is that A2BX is bleeding me dry in lawyer's fees and the divorce proceeding hasn't even got to the money settlement stages yet. We are still fighting for Ryan's life. (She wants to ruin it; I want to save it.) I got a call at 4pm today from my lawyer telling me that I've got till next Friday to come up with about 10 grand...or I'll be on my own.
I somehow don't think this is a good time for me to start asking strangers to fund a spec house. It's starting to look like I'm gonna be bankrupt and living in my truck by the time this is over, and I sure wouldn't want to take anybody else down with me.
Dinosaur
'Y-a-tu de la justice dans ce maudit monde?
Sorry to hear about your tragic personal life.
It might not be a good time to start a spec house business, but if your market is hot and they sell, then I'd say it's the perfect time.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
banks don't loan money unless ya got money.
Jeff, that statement isn't necessarily true, but we'd have to discuss specifics to make sure we are talking about the same term when we use the word "money".
One thing I'd like to point out though is that conventional wisdom tells you to go to the bank to get money. That's not bad advice, but it's important to understand that there are maybe 100 different ways to fund a deal and your bank is only one of them. Even if you decided that you only want to deal with "banks", there are a very wide variety of investment programs offered through banks. Each bank has their own investment strategies and you might have to go to 25 different banks to find one that specializes in your ideas.
I was interviewing real estate brokers last week. I had a very long conversation with and agent that I'm probably going to list with. He relayed a story about some commercial property in a small town. It consisted of 20 apartment rental units in a building. Here's the story: Two years ago, a guy found the undervalued property. He realized that it would be a perfect situation to change the building over to condos (that is the rage here in Michigan right now). He took his knowledge back to the big city and got his investor to agree to the deal. The investors turned out to be non professionals but heres what they did. Since the building appraised at over a million dollars, and the selling price was 700k, the guys went to closing to pick up some checks worth 200k. They were going to use the money to renovate each unit and sell it. Well, instead of doing the work, they simply didnt make any payments and signed the property back over using a deed in lieu of foreclosure.
Did the bank lose? No. The bank worked with local contractors to do the renovation and used this realtor to sell the units. They sold them as fast as they got them done becasue they were priced under market. Banks aren't allowed to profit so they just sold them to cover their costs.
These guys made money without having any. They made it because they were looking for it. I wouldn't advocate their methods, but I'm just pointing out that it can be done. Money is lent based on market values, not down payments.
blue Just because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
it's still chasing rainbows and looking for the pot of gold.
Dino said he's got severe cash flow problems at the moment ...
wishful thinking don't make that go away.
I wouldn't advocate chasing rainbows, but I would advocate reading Think and Grow Rich, and reading it again and again until it is understood. Then, I'd recommend reading, listening to about another 100 books, maybe 1000. Whatever it takes.
The lesson in Think and Grow Rich is often missed. Wealth surrounds us in many forms. Why do some people see the wealth while ten thousand people walk by and not see anything? The answer is attitude. If you seek it, you will find it.
When I posted to Dino, he said nothing about severe cash flow problems. He mentioned sleepless nights, but that could mean anything. Even if he did mention severe cashflow problems, that only means that he needs to take severe cashflow creation steps to solve the severe negative cashflow situation.
I will agree that wishful thinking won't make a problem go away, but nothing I posted is wishful thinking. It's only wishful thinking to people that look at the half empty glass, instead of the half full glass.
Wishful thinking isn't the same as learning new ideas and techniques. If someone truly wants to escape their financial plight, all they really have to do is learn the things that wealthy people already know, then make the effort to implement those ideas. If they dilligently apply the new knowledge, and never give up, I doubt that they will fail. It might not go as fast as they want, but I'm 100% convinced that they will significantly change their financial course. I find it almost impossible to think that someone could gain the knowledge, then ultimatly fail with no recourse. Here in America, that's not possible.
Jeff, I don't mind your skepticism, but I'd rather debate the specifics of what/why/how all this stuff is accomplished. I think that would be better information and useful to those that have a need or dream.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
Yer dreaming too much, buddy
I don't think so Jeff. The joint venture technique that I described to Dino is done every day in every county in the USA.
not to rain on yer parade there Blue ...
But if what U just typed to Dino is true ...
why ain't U a millionaire several times over yet?
I don't mind if you rain on me Jeff, I have a stout umbrella.
The post I made to Dino is true, logical and it makes sense. The only reason that I'm not a millionaire many times over is that I didn't acquire this information, and fully understand it all until very late in my career. I only began to fully understood the full power of the knowledge in my last year even though I have actually been involved in several joint ventures over the years. Since I was doing relatively well in my Specialty Contracting business of Rogh Framing, I always envisioned that I'd eventually create enough cash reserves and cash flow to expand into any other type of business that I desired. In the interim, I've spent the last few years studying various types of business looking for a fit for me and my personality. I've tried several different things and have drawn some conclusions from the effort/ventures.
To prove that it works, I can tell you that we got a commitment from an investor just yesterday (the coincidence is ironic). The investor has agreed to sign for the construction loan and will put up enough cash to get the house started. We are debating the location and style of the home right now. Since we are in the process of building two homes that will be similar in style and in the same general area, we decided to stall this particular venture until we get precise 2005 construction costs (we have all the subtrade proposals, but we just want to make sure there isn't any significant surprises) before we sign a joint venture agreement with this party.
I'll post a copy of an investment offering letter I drafted this past winter using estimated costs on the houses that we are building. I'm not sure whether the numbers are firm and I'm not sure that this will be our final offering, but it's my start with regards to spec building.
Will this endeavor make me a multi-millionaire? I don't know. I know one thing for sure after 30 years in the rough framing business....I'm not going to be a milliionaire because of framing income!
U sound like every other late nite "instant millionaire" commercial. Money makes the world go round .. and if U ain't got it ... someone's not sitting in their cubical just waiting to give U some of their's.
Sorry if I sound like the commercials. I wouldn't have known that because I don't listen to them. In years past I had a television system that allowed me to surf by them and occasionally I'd hear five seconds worth, but I've never really stopped to hear them out. I think that I listened in on Carlton Sheets once for five minutes or so, but that was because I'd already listened to his entire real estate course and another one on creating partnerships to invest in real estate. I was just curious about how he was marketing the products that I've already had access to.
A lot of people criticize Sheets and call him a huckster, but I don't agree. Since I've read and listened to a large volume of stuff from a variety of sources and authors; some hype,,some substance, I know that Sheets offers a very basic package of information that has some value. Will it make you a millionaire many times over? Maybe. If you put his knowledge to work, you'll figure out what works and what doesn't. The process of creating wealth is in the doing, not in the reading/listening.
what's next ... U gonna tell us how to turn our debt into profit!
Never pay taxes again ... something along those lines?
Actually, every astute business person knows that accepting the right type of debt is a necessary step in creating profit.
The "never pay taxes thing" is easy. Just don't have income.
blue
Just because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
not to rain on yer parade there Blue ...
But if what U just typed to Dino is true ...not to rain on yer parade there Blue ...But if what U just typed to Dino is true ...
why ain't U a millionaire several times over yet??
Jeff, I had to revisit this question because I remembered another reason while I was doing the one hour drive to the jobsite today.
why ain't U a millionaire several times over yet?
BECAUSE NO ONE EVER TOLD ME ABOUT THIS INFORMATION IN MY EARLIER YEARS!
When I think back at how close I was to unlocking the secrets of wealthbuilding, I'm always amazed. I came from a drinking dad's blue collar background and I always thought that you had to work an hour to earn an hour's pay. I envisioned that I'd work hard, save my money and some day I'd have enough to get started in a business of my choice instead of carpentry contracting. In my earlier years, I didn't have the luxury of an internet to learn things such as I have posted. I didn't have a support group that understood the financial laws of success. I didn't have a group of friends that read financial books and investment magazines. Basically, I surrounded myself with my small group of friends and family members. I was doing as good, or better than all of them!
Then one day, I decided to broaden my horizons. I decided to take my financial path into my own hands. I decided to study and learn what wealthy people study and learn. Instead of reading the sports pages, I started browsing Forbes. Instead of reading comic books, I started reading financial books. Instead of thinking "I can't afford that, I started thinking "How can I afford that?".
Years ago, I prowled through an abandoned house on the banks of a river. I knew I could fix it and make it worth something. I didn't have the money, but I had the know how. Instead of doggedly pursuing that rehab project, I let it drop and went on with my life. Where would I be today if I had pursued that project and researched the same real estate books that I've read today? By that time Robert Allen had already written his Zero Down books and even if I didn't use his exact templates, I probably would have found some way to fund that deal.
A few years later, I found out my step Father in Law owned some farmland that was ONE SUBDIVISION NORTH OF MY HOME! He owned the land and I was capable of putting up the houses in it. He eventually sold it to a developer who made MILLIONS MORE ON IT, even though he paid millions for it. If I knew then, what I know now, do you think I could have structured a joint venture with my Father In Law? I do. I KNOW I could have made him an offer that used his land as the security to borrow the funds for the roads and infrastructure and a model. As the inevitable orders came in, I know I would be capable of superintending a simple residential sub and my Father in Law would have made millions more because he would have garnered all the lot profits and made millions more by taking half of the build profits. That would have left me with a few paltry millions for my self.
Why didn't I do all that? Because I didn't think I could!
I now know better.
There have been many other instances when the teacher appeared but this student wasn't ready.
Has your teacher ever appeared?
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
U already covered it ...
but I am a skeptic ... especially when it comes to other people.(ie ... the instant millionaire commercials and such)
I'm also an optimist when it comes to myself.
maybe there's hope for me after all?
btw ... I read thru the whole Carlton Sheets deal years ago ... my sister in law .. always in a state of finding her next "easy million" .. which would be her first also ... ordered the set and never did anything with them ... I gave them a quick once over.
I will give the guy credit for saying up front that this "side job" would take about 60 hrs a week to make any money at. Free money's never free. I think at that time he was pushing for people to go out and do the leg work ... and if the deal was sweet enough ... he'd help finance. I learned a bit about repo's amd sherrif sales.
Maybe someday ... figured if I put that energy and focus on my own business ... I'd get similar "get rich quick" results. U know ... quick ... after years of hard work.
Jeff Buck Construction
Artistry in Carpentry
Pgh, PA
I will give the guy credit (Carlton Sheets) for saying up front that this "side job" would take about 60 hrs a week to make any money at..
Thats one reason that I never fully invested myself into the real estate market like Tim and DanT have. I'm not looking for a business that takes more time than my carpentry! I've dabbled looking for a real estate niche that takes LESS time, but really haven't succeeded. I am putting my resort property on the market this weekend for 659k though, so I don't feel too bad about my lame efforts! Real Estate is very forgiving. You can make a lot of mistakes (I did) and still come out smelling like roses! LOL! The gains of inflation and appreciation make everyone look like geniuses!
I don't believe in get rich quick schemes myself either. Every attempt that I've made to make fast cash have been slow! That's why I have taken the time to read so many different books about financial matters, real estate, etc. I'm going to do it right in my downstretch!
If I don't, I won't have a pension!
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
"...next round of my custody battle..."
I feel your pain. Went through this about 15 years ago - pure hell, ruined my credit, left me bankrupt, my marriage suffered, emotional wringer for all involved. I even went through a period where I couldn't even talk to my own daughter because some quack counselor said she was so adamant about wanting to live with me that I must have brainwashed her, hence I was a "threat" to her!The system is set up to perpetuate itself, to "milk" you for all they can squeeze you for. Now for the good news: my story had a happy ending, my little girl is now a lovely young lady, living with us, doing great, and is considering joining me in my newest contracting venture. A word to the wise: no matter what happens, just stay emotionally close to your kids, be supportive, keep in touch, and try to insulate them from the legal hassles between you and your ex.
It's amazing how many people on this board have been through the same sh!t the same way with the same result. Everytime I mention it in passing, somebody else lets me know I'm just another member of the same club of abused fathers. Thanks for your thoughts; you know how hard it is, and you know how much every kind word helps....
But we better knock this off; last thing I had in mind was to hijack Blue's thread.
Back to Business, boyz N girlz....
Dinosaur
'Y-a-tu de la justice dans ce maudit monde?
But we better knock this off; last thing I had in mind was to hijack Blue's thread.
Hijack away. The thread has run it's course.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
I don't think it's run its course, but it has legitimately veered into another aspect of business, investments and getting rich. This is fodder for lots of discussion. (My problems are only fodder for lots of sympathetic head-nodding; seems like every man I know has been down this road at least once and none of us has yet found a solution. Maybe we should burn our bras--uh, Jockey shorts--on television??)
An ex GF of mine many years ago had a very rich BIL who owned several investment banks, including one in NY and another in Hong Kong. I got along well with him at family get-togethers, and I remember him saying once, "It really isn't hard to get rich. The problem is you have to dedicate your entire life to doing nothing else. If you're willing to do that, anyone can become rich." He meant it, and he was anything but a huckster. But he had a typical rich man's blind spot, and that was that his first 'small' forays into investment banking occurred (a) when he was right out of Harvard Business School, so he was well-connected with other rich-men's sons, and (b) with the piddling start-up amount of $4,000,000 given to him as a graduation present by his father back in H.K.
I try to be an optimist, and I strive to avoid undue pessimism. On balance I find this makes me a conservative realist. My experience has been that most real individual fortunes are created and held within a small sector of human society which, whether consciously or unconsciously, tends to re-invest in itself rather than expand in population.
So the initial problem in getting rich is to find a way to buy that first ticket to the club. After that, it doesn't matter how much you don't have; public perception that you already have it will enable you to get more without having to do anywhere near as much to earn it as you did that first time around....Dinosaur
'Y-a-tu de la justice dans ce maudit monde?
Dino, your reply brings a few thoughts to mind.
First, you said "I try to be an optimist". I'd like to address that issue.
A wise mentor once said to me: "Try to pick up this pencil" as he dropped his pencil to the floor. I easily bent over and picked it up and handed it to him. "No, I said to try to pick it up!. He again dropped the pencil and again I easily picked it up. The third time he explained: "I asked you to try to pick it up and instead you ARE picking it up!". The difference between trying and doing are substantial.
When you think about your attitude and analyze your optimism, where do you stand? Are you trying to be optimistic, or are you BEING optimistic?
Fix that little problem and pretty soon other problems will start to get fixed easier too! I'll be the first to admit that this task is easier said than done.
Your gf's bil story is one opinion. He obvioulsy felt that the only way to develope wealth was to live that life and abandon all others. I disagree and I could point you to many wealthy authors that will clearly explain that you need to find balance in your life.
Your most compelling statement is in your last paragraph. You think that your road to wealth requires a down payment of only money. Again, I don't agree. I will agree that a down payment of money might be the easiest route to take, but money is only one part of a wealth building equation. Time is just as important and if you have time to trade for money, someone will have more money than time. That is a match made in heaven, but you have to seek it to find it. It may find you, but usually those things dont' work out that way.
Here's a good example of how a positive attitude and a definite plan will work to create wealth.
My partner Frank was experiencing back spasms and went to the chiropractor. While he was in the middle of the treatment, an aide knocked on the door and told the Doc that he had a call come in that he was waiting for. The doc excused himself and took the call. When he came back in, he chatted with Frank and explained that a deal had just fell through, one that he was going to make a lot of money on. He went on to say that is was a developmental deal...something about developing raw land and building subdivsions. Since Frank and I are both in the process of hunting development properties AND seeking investor money, he immediately explained that to the chiropractor. The doc was glad to know that Frank was interested in doing deals and told him to bring him ANY DEAL THAT MIGHT BE OF INTEREST TO HIM. He went on to explain that a group of five chiropractors have formed a small investment firm and were actively looking to do deals. They had pooled a small amount of money to work with, a couple of million dollars, but they would be very interested in working with Frank.
Why Frank? Because Frank's sister has been a very loyal and good employee at the DR's office for more than 6 years now. He had treated Frank many times and they already had some form of relationship.
The point I'm trying to make is this. Last year, if that conversation had happened, Frank would not have been so focused on that Dr's "problem". Last season, Frank and I were focusing our business on expanding the crew, doing multi units. We were up to our neck and eyeballs with 24 employees and focusing all our energies on keeping the cashflow current. This year, we took a step back and decided that if we don't make a concentrated effort to change, we'd be in the same boat next year and the year after.
So, we decided to make a change. You can even track that decision. I posted it right here on this board under a thread called "It's Official". Why did I post that. It's called a public affirmation. I made a decision and I told people about it. I told this board, I told my family, I told my business acquaintenances. I told/tell everyone. Why? because if I don't, I'll still be known as a framing contractor.
The certainty of the decision has led us down many different paths than what we normally would take as carpenter contractors. Since we decided we are subdivision builders/developers, we ARE subdivision builders/developers! When I was up north interviewing realtors to list my property there, I was also looking at development properties. I call on properties everywhere. I take my camera and snap pictures of possible sites and signs. I talk regularly with a mentor, a syndicator, that is actively looking for a deal to do. Does all this take money? I haven't spent a dime that was explicitly targeted at buying a subdivision unless you count my talking minutes on the cell.
So, what is the difference between you and I? It's attitude. Both Frank and I are CERTAIN that we will land a subdivion deal and yet neither of us have the skill, experience or money to do either. But, since we lack all of that, we have that alternate plan...joint venturing in whatever we need to do. The other very important thing that we are doing is that we are "doing the right activities" related to this endeavor. We are studying the market. WE are looking for properties. WE are talking with possible investors. We are talking with other builders to pool resources with. We are talking with suppliers. We are setting up accounts. We are engaging in building homes rather than just framing homes. We negotiating option deals on lots owned by others to use as our lot inventory for spot builds. Etc, etc, etc.
Dino, I'm not trying to minimize your plight and I don't want you to think that doing all the above activities are easy. I've spent a lot of time researching topics that are important to this latest effort. I can talk intelligently about many different aspects of this type of business even though I've never done it. I somewhat understand the challenges and I'm willing to tackle them. I also understand that when a deal comes up, we will be committing to it full time and the deal might take 2 or 3 years to complete. All of these issues and more are part and parcel to the success that I KNOW we will achieve. I just want you to know that none of this would be possible if I decided that it couldn't be done.
The difference between those that say this can't be done, and those that know it will be done is summed up in one word: ATTITUDE.
I'm not trying to be optimistic, I AM optimistic.
You can be too. It might be a bigger challenge for you, but if you weren't the type that could get it done, you wouldn't be as far along as you are today, would you?
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
Blue--
Short answer to a long commentary: I agree that attitude is an essential element. But please understand that when I said 'I try to be an optimist' I left out one important word, the word 'Generally.'
So let me rephrase it: "Generally, I try to be an optimist. But as this isn't always a realistic or safe policy, there are times when I must be a pessimist or get my a$$ shot off...."
A person who is always an optimist is an easy mark for con games. If I got a phone call or e-mail telling me all I had to invest was $100 in order to reap $1,000,000, I'd be more than an optimist if I sent off the C-note. I'd be a foolish optimist.
Likewise, an unqualified optimist can easily blind himself to practical problems in a deal that need to be solved before the deal can be considered to have a realistic chance of success. Suppose you have an investor who doesn't have quite enough cash to fund the project, but is optimistic that he can raise the rest once you get going. You are optimistic he can too, so you deal, spend the upfront money on planning, land acquisition, and permits and start digging.
Well, the concrete truck shows up and demands cash before he pours. When you look around for your partner, you find that he's outta bullets and has bailed and you're on yer own. And by the way, you owe for the surveying, excavation, formwork, net 30 days....
I've got a close friend, a doc with more money than he knows what to do with. He worries about me gittin' old like him (I'm 53; he's 60) and not being able to do what I do any longer (ski patrol). He flat-out offered to back me if I could come up with a project that'd give me a new and less physical way to spend my 'declining years' LOL.
The only proviso he made on that was, 'NO SPEC HOUSES!!' He'd been that route once before with another friend and it had been an unmitigated disaster. They no longer speak to each other in fact, and both of them lost money big time.
Now, obviously, I am optimistic about my ability to design, build, and sell a spec house for a good profit. I don't have the slightest real doubt it would work. I mean, heck, I did it once already, before I knew any of the things I've learned the hard way over the last 10 years. It's the house I'm living in, and it's worth something like 3-4 times what it cost me to build. That's a pretty good profit margin; good enough for me any time.
But I won't bully my bud into believing in this. It would not be worth losing the friendship to make the profit.
No, for me, the way 'in' would have to be with what I've earned so far and have managed to hang on to. If I don't lose the house and my jockey shorts--and my son--in this divorce sh!t, I will eventually sell the house and take the cash and build something bigger, more valuable. I don't have enough desire to be 'rich' to go through the hassle of flipping my own residence every couple of years and living in constant contruction debris and/or Dickie Moore trailers. Not at my age. But I'll leave a nice lump to my son if I can, and that can be his start-up when I shuffle off to my last home....
Dinosaur
'Y-a-tu de la justice dans ce maudit monde?
Likewise, an unqualified optimist can easily blind himself to practical problems in a deal that need to be solved before the deal can be considered to have a realistic chance of success. Suppose you have an investor who doesn't have quite enough cash to fund the project, but is optimistic that he can raise the rest once you get going. You are optimistic he can too, so you deal, spend the upfront money on planning, land acquisition, and permits and start digging.
Dino, I agree on your definition of a foolish optimist and I can almost understand how depressing that divorce could be. I"m not trying to motivate you, I'm just pointing out something that was pointed out to me.
I copied the above paragraph because it contains an element that is worth discussing.
A joint venture or syndication can be complicated and the offer to invetors can't be taken lightly. Mr Gandalf has re-inforced what I already knew: when you write your business plan, you have to include some reasonable contingency funds and the worst thing that you could do is not solicit enough funds in the opening phase. The plan has to be rock solid with good hard numbers and no one can move foreward until every dollar is covered.
When the offering to investors is made, they will have a short time frame to agree to the deal. If the investor agrees to participate, they have to make a non refundable deposit. Nothing is left to chance and all terms are explicitly detailed. Things can go wrong, but I'm not thinking Mr Gandalf will move forward with an investor that "can raise the funds".
Mr Gandalf did relate a deal that involved HUD. HUD had promised a substantial grant to partially fund a project of his. When HUD wrote the check, it was 400k short. He said that he couldn't do anything about it and he had to scramble to cover the shortage. It left a bad taste in his mouth and he said he wouldn't do anything with HUD again.
It's obvious that problems can/do occur, but careful planning minimizes the dangers. Maybe your doctor's spec home venture wasn't carefully planned out. If I were you, I'd dig deeper into what went wrong. I'd do it for two reasons: to find out if he has a justifiable fear and to avoid the problems that he already experienced. I'd also start looking for a project that appealed to him!
blue
Just because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
"He flat-out offered to back me if I could come up with a project that'd give me a new and less physical way to spend my 'declining years'"
Wow. Hope you don't let that one pass you by!edited to add: about that friend with the 400k (or whatever it was!) graduation present - reminded me of an interview I saw with Donald Trump. Since he's famous for saying "your fired!" the interviewer asked him if he'd ever been fired. I think his answer says more about why he is where he is than anything else I've ever heard about him. He responded "No, I've never been fired, because I've always done a good job...for Dad."
Edited 4/14/2005 9:12 pm ET by Huck
ROAR!!Dinosaur
'Y-a-tu de la justice dans ce maudit monde?
"The difference between those that say this can't be done, and those that know it will be done is summed up in one word: ATTITUDE."You bet your ####!BTW, the book came back. Not enough postage, so it will go out agaiin tomorrow.
LOL about that book Sonny!
I'm looking forward to it. I better pound though my Jeffrey Gitomer book tonite instead of playing around here.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
miss penny... what you are describing is a cost-plus contract..
i don't do cost -plus if i can help it..
and .... cost -plus with an estimate .. why bother?
i will give them all the specs they need.. and the lump sum price to do the work.. but as soon as estimated man hours gets on the list the whole thing goes south..
Mike Smith Rhode Island : Design / Build / Repair / Restore
56672.85 in reply to 56672.79
miss penny... what you are describing is a cost-plus contract..
i don't do cost -plus if i can help it..
and .... cost -plus with an estimate .. why bother?
i will give them all the specs they need.. and the lump sum price to do the work.. but as soon as estimated man hours gets on the list the whole thing goes south..
MIke, if you've set up your labor rates using the Proof system, why wouldn't you be okay with a cost plus arrangement?
The one negative that I can think of is when the buyer doesn't think your guys are productive enough and you're billing hourly.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
blue .. how much "cost-plus " work have you done?
not much , i'll bet...
and the Proof system is mainly for internal company use... it tells the person pricing the job .. how they are going to allocate overhead and profit to the components so the O&P will be covered in the Price...
the main problem with Cost Plus is ... how do you arrive at an estimate ?
do you spend a lot of time doing an estimate ? if you do, then, can you guarantee your total job cost ? what happens if you are wrong ?
what do you do when you change the scope of work ? do you refigure the estimate ?
do you include a whopping contingency to make up for the "fog of war " ..
an estimate in a "cost -plus contract" is a dagger aimed at the heart of your relationship.. it's going to be WRONG.. make up your mind to that.. figgure out how you are going to explain why it was wrong.. think about the hours devoted to the billing and explanations..
have you ever testified in a civil case as an expert witness .. in terms of "job costing"..
guess what , there is no correct answer..
and ... "my guys aren't productive" ... you're right.. it's like watching grass grow.. so....do you want productive ? or do you want quality ? i work with the tools and materials i've got... i try to fit the guys to the tasks we have to accomplish.. can someone else do a certain job better? yup.. but someone else ain't here , we are
this is remodeling .. welcome to my world..
suppose you want to have the most , or say a high level of skill person.. doing every phase of the project...
if you have a large organization.. you can have all of those specialists and schedule them in and out of the job.. but it takes time , and staff, and having thoise specialist at your call...
read my $$ million dollar baby $$ thread... that CM company is throwing specialists at the job.. they have supervision up the ying-yang.. but i bet the job sucks big-time
Mike Smith Rhode Island : Design / Build / Repair / Restore
blue .. how much "cost-plus " work have you done?
not much , i'll bet...
Actually Mike, I've been involved in quite a bit. I did a 2 year stint as a salaried carpenter/superintendent and the GC sold 90% of his projects as cost plus. Personally, I've negotitated several when I did remodeling and in the new construction arena, we did a fair amount of change order/extra work on a non-bid basis.
the main problem with Cost Plus is ... how do you arrive at an estimate ?
That is the core question that exists no matter which type of contract you enter into.
do you spend a lot of time doing an estimate ? if you do, then, can you guarantee your total job cost ? what happens if you are wrong ?
Actually no, you do not spend much time at all doing an estimate. One of the main talking points when you're going to do a costplus presentation is that if you "estimate" the job, you will be forced to "cover your contingincies", which results in a higher price than necessary. By using the cost plus arrangement, the client pays for only the exact amount of work done. In essence, they get the "LOWEST POSSIBLE COST". They also can benefit and realize some extra cost savings because the contractor can lower his profit margin because he's transfering the risk from him to the buyer.
what do you do when you change the scope of work ? do you refigure the estimate ?
Actually, that thought is also a main talking point when selling a costplus contract. Because the owner is paying the bills, they have to luxury of changing the scope on the fly. Since the "estimate" was only a WAG (wild azzed guess), the change of scope is also just a WAG.
do you include a whopping contingency to make up for the "fog of war " ..
Yes, in the presentation process, you banter around with the worst case/best case numbers including WAGs for unseen conditions.
an estimate in a "cost -plus contract" is a dagger aimed at the heart of your relationship.. it's going to be WRONG.. make up your mind to that.. figgure out how you are going to explain why it was wrong.. think about the hours devoted to the billing and explanations..
It's not always going to be wrong. You're being too pessimistic. Let's say I do a costplus deal on new construction-rough frame, which I'm an expert at. Both Frank and I can tell you within ten seconds, by looking at the front elevation about how long that project will take. We "estimate" the job in weeks, rather than hours. In our experience, we are usually right on. In remodeling, we don't have that basis of expert estimating ability, but we will get it. You probably do and you probably can make a fairly competent guess as soon as you know the scope.
The billing is nothing more than a progress report and the hours that it takes are paid for by the clients. IF it takes 3 hours of clerking, then they get billed for 3 hours of clerk time on the next bill. Those rates are predetermined.
and ... "my guys aren't productive" ... you're right.. it's like watching grass grow.. so....do you want productive ? or do you want quality ? i work with the tools and materials i've got... i try to fit the guys to the tasks we have to accomplish.. can someone else do a certain job better? yup.. but someone else ain't here , we are
If you're guys aren't productive, that's an internal problem that maybe you should be working on. No one's perfect and I understand that some tasks take longer, but the one common philosophy that everyone must have is a positive attitude with a gung ho work ethic. If a guy can't show any enthusiasm for routine tasks, like walking to the truck and back, I don't need him around me. I've taken a few guys for a "carpenter's walk" around the house. IF those young guys can't keep up with a fat old man like me, they better just mosey on down to the Mobil and work the counter.
Please understand that effort and enthusiasm are not contrary to quality.
this is remodeling .. welcome to my world..
And mine too now.
suppose you want to have the most , or say a high level of skill person.. doing every phase of the project...
We're planning our business with only skilled people. We're not budgeting for apprentices, laborers or temps in any way.
if you have a large organization.. you can have all of those specialists and schedule them in and out of the job.. but it takes time , and staff, and having thoise specialist at your call...
read my $$ million dollar baby $$ thread... that CM company is throwing specialists at the job.. they have supervision up the ying-yang.. but i bet the job sucks big-time
It's all relative. We dont have a big organization but we do have access to other specialists that we'll use.
The CM that is throwing specialists and a ton of money is obviously on a cost plus. Yes, I'd do that job and be thankful for the paltry 10 or 15% profit that the guy forces me to accept!
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
>>>>"Let's say I do a costplus deal on new construction-rough frame, which I'm an expert at. Both Frank and I can tell you within ten seconds, by looking at the front elevation about how long that project will take."Blue,I've heard of estimator's being accurate, but down to ten seconds? That's amazing!Seriously I'm learning a lot from this thread. Everyone keep up the great dialogue.
Jon Blakemore
I think you're misinterpretting the ten second thing Jon.
It takes us ten seconds to decide how many weeks the house will take. We can drive through a sub and generally know how much each house takes us. Most of our bids are in one week increments, sometimes splitting down to half weeks. We dont' need to study the plans in depth simply because we already know how much time it takes us to frame those types of houses.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
Sorry Blue,Weak attempt at humor...
Jon Blakemore
Oh, I get the joke now. When I read your reply, I thought you were teasing us about knowing within ten second of how long the job would be. Were usually within a day or two but we really don't have any way to guess closer.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
"what do you do when you change the scope of work ? do you refigure the estimate ?Actually, that thought is also a main talking point when selling a costplus contract. Because the owner is paying the bills, they have to luxury of changing the scope on the fly. Since the "estimate" was only a WAG (wild azzed guess), the change of scope is also just a WAG. "The problem is that the job which you orginally WAG at $75k has had 3 significant changes in scope and at this point the HO has paid you $85k and the job is has significant work to do before it is finished.This is the point that the HO starts adding up the bills and want to know WHAT IN THE HELL IS HAPPENING.There was a thread here within the last 2 months where a guy was in just that cirsumstance.What you suggest is not just a recipe for disaster, but a one cooked up by Julia Child and served with matched table decoration by Martha Stewart.
Bill,Don't you think that can be solved with clear communication? It is not know what the eventual cost will be, but the guesstimates can still guide somewhat.If the HO adds 3 items that begin to escalate, when the changes are requested they should be made aware of the changes to the original guesstimate. An appraisal of the amount of work that remains would also help them to measure the progress.I think a cost plus job requires clear lines of communication more than any other type of work. I think it's ludicrous when you hear of a client who is handed the final bill of $30k more than what they expected the project to cost.The escalation doesn't typically happen in $10k incrememnt, rather it creeps up by $500 and $1,000 amounts. If they were kept up to date by the Contractor with regard to these minor adjustments they can then make decisions intelligently.
Jon Blakemore
I think that it can. I was basically respond to how Blue posted the comments.But, as I said there was a thread here recently, where someone was working on such conditions.I don't remember the details, but I remember he was working for a father and son. The son lived in the house and the father was (part?) owner and paying the bills.IIRC correctly it started out as some repairs or minor remodeling and kept expanding to a major addition.
Bill,I remember the thread you're referring to.IIRC, that whole situation was a mess. Dealing with multiple decision-making parties, out of town clients, scope of work that is not clear.There definetely is a lot of potential for problems in a cost plus situation.
Jon Blakemore
I agree Jon, that entire thread reeked of problems. The guy paying the bill was not the decision maker. The guy making the spend decisions was spending daddy's money and we all know how that situation ends.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
Blue,
I think the title of this thread should be "How do you sell an SCA?" because I think that is the reason you asked for the benefits thereof.
First some exploratory and/or explanatory thoughts: In another thread I had said that there are three reasons people buy; fear, sex, and greed. The Deoderant "Right Guard" is my favorite example of this. Way back when, deoderant was only sold to those people who had a medical condition that cause a very bad body odor that could not be controled by ordinary sanitation. RG started a campaign that said that the prettiest girl would not want you if you had any human odor. All three ingredients in one statement. Fear, you stink; sex, obvious; greed, getting the prettiest.
Sonny's Process; I would like to classify his as the Buyers Process because it is designed for and aimed at the buyers fears. I want to introduce the concept of the Builders Process.
The Builders Process iterates the steps that a builder has to go thru from first contact to last contact. As an incomplete example
Answer the phone proffesionally
Prequalify the customer
Sell first meeting
Mail The Process (Buyers)
At first meeting Sell Company
Sell SCA
Many meetings to build SCA
Deliver SCA and sell Building Contract
Deliver building
>>>
Cash check and thank client
Followup contacts to keep company fresh to client.
I mention all this to put the SCA into the proper context. Without that context, we haven't a clue as to it's purpose in the Builders Process.
First, what exactly is the purpose of the Builders Process? I'll give you a clue, the answer is in #5 above. Every step of the Builders Process must be aimed at Selling The Company.
The SCA has no inhierant benefits to the prospect. It's real purpose is to Sell The Company one small step at a time. Once you accept that fact, you can design an SCA Presentation that has benefits to the client.
What benefits do you want to put in the Presentation? Ones that appeal to Fear, Sex, and Greed.
Fear? Getting ripped off. Making the wrong decision. . . .
Sex? The SCA insures he will get 'Granite', Cherry', and Italian tile'. . .
Greed? He gets the most for his money. He can use the SCA to shop contractors. . .
You use the SCA to Sell The Company. You sell the SCA via the SCA Presentation.SCA Presentation Key Phrases:
Insures you get what you want.
Prevents costly Change Orders / Authorizations for additional Work
Compare apples to apples
No Surprises
Budget planning
Aides in financing
Schedules
Material availabilty
>>>
SamT
Sam, many thanks for your clarifying post.
I have to agree that your lists are logical and coherrent. Since they make sense, I'll be able to use every bit of the information that you have shared. I also like how you relate the talking points to fear, greed and sex (appeal).
After reviewing your list of benefits, I realized that I probably mentioned 6 of the eight in my presentations. The purpose of this thread was to identify every possible benefit so I will study them and have them firmly planted in my brain. I'll create a checklist (it might be mental) and make sure I'm mentally ready to explain it all. If I don't do this exercise, I'm likely to always bat .750 because my memory isn't all that good anymore!
This is very useful information for me to create my sales training PP.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
Mike, I never give a breakdown - one fixed price only.Penny, as for the customer saying something like: "Gee. That seems kind of high."I immediately ask them:OK, what did you figure on the cost for cabinets?What did you figure for the cost of the tops?What did you figure for the labor rate, and for that labor rate, what part of it is labor burden?What did you figure for an overhead expense percentage as a part of annual sales, and what did you figure for the net profit?Certainly you must have the above to use a a basis for: "That seems kind of high."Usually I just get a "Well. It just [seems] high." to which I again ask - "Based upon what standards."In other words, I'm tactfully saying to them: Do you really know what you're talking about?Usually when the type of question or statement are directed to me I tactfully cut the meeting short, my time loses short, and leave, because I know I am not the contractor they want nor are they the type of customer I want, so ending the relationship mutually beneficial.I guess I'm arrogant. 99% of the time people who call me, want me, period. And I only go on sales calls for people who I've screened a little over the phone, and as I've stated before, my time is not infinite, and I value what I have. today I turned down even giving a price to a man I'm curently working for and told him while smiling that he couildn't afford me. He's paying me to do work (repairs) paid for by the seller of his $1.2M home. The painters he hired and who have worked for him before, I wouldn't let paint a dog house of mine - but they're cheap at $35/hr. Yep. I guess I am arrogant. But at least when I paint a ceiling white, I don't get paint on the sides of the 12" x 12"rough sawn dark brown painted ceiling beams.I'm a professional, when acting as a consultant, a GC, and a tradesmen. Like yourself, I get paid well for all hats.
You have the advantage of years of experience and projects to show the quality and cost of your work. So it would be easier for a client to be convinced of your competance and easier to be convinced that your cost estimate is accurate.
Just starting out I feel like I need to explain myself completely still, do a plan, elevations, little perspectives, cost out everything to the finest detail. Not to mention that this project is for some long time friends and the last thing I would want is for something to screw up. They keep telling me not to worry, but they are particularly innocent in these matters, and I'd rather worry a little now than have a big blow up with them in five years because something failed.
I will check out that Remodeling magazines Cost of Projects. That sounds like it could be really useful.
I'm still interested in more specifically what different people's SCA's, DCA's (that's a good one from Dinosaur) , or proposals look like, if anyone's interested in sharing.
(previously known as Bunny - the only time i've ever changed to calm my boyfriend)
penny....
<<<Just starting out I feel like I need to explain myself completely still, do a plan, elevations, little perspectives, cost out everything to the finest detail.>>>
you can do the plan, elevations, perspecitives.. apparently... that's your strength..
you can't cost out all the little details.. you don't have a clue as to what they are.. or how much they'll cost..
you can get reasonably close to how much the PROJECT will cost with one scope and how much with another scope
but watch out for the trap of subtracting one cost from another to represent the difference .. which sounds counter-intuitive.. but it is reality...
no matter how much experience you have in this business, you will not get the cost correct.. i don't .. why would you?
it's like diversifying in the stock market.. the more diversity in your portfolio, the better your chances of making a profit..
when you work fixed-fee.. there are only 3 things that can happen... you will lose money... you will break even.. or you will make a profit.. the first two are what usually happen... the third thing is hard to do.. if you are going to deliver a quality product..
quality often means going the extra distance, redoing a mistake... spending some extra time... those cost money.. so you have to have some flexibility in your price to allow for the quality
my goal in this is to win a job , that i can do at a quality level to meet their expectations, that i can make a profit on.. my Proposal is the tool i use to do that.. i'm selling... the customer is buying.. anything that gets in the way of the sale has got to go... so .. i want them to make an informed purchase....
but they do not need to know the nuts and bolts of how i build my price, just what the specs are and what the price is
if i AM doing "cost-plus".. i will state my rate... but i will not break down how i arrived at the rate... if they want to know. i will tell them it involves the pay, the labor burden, the company overhead, the profit... they already know we are insured for WC & GL.. our rate is supposed to generate a PROFIT so we can stay in business to service them in the future
Mike Smith Rhode Island : Design / Build / Repair / Restore
they do not need to know the nuts and bolts of how i build my price, just what the specs are and what the price is
all right. that makes sense to me, but I bet your specs give details like what all the materials are going to be, you wouldn't just say "build a bookshelf" or "cover basement floor with ceramic tile" ? you would say what you're going to build the bookshelf out of and which size or what ceramic tile? but you wouldn't give the area calculations, per sqft cost, cost for ordering a certain amount of extra material, cost of the underlayment...... am I getting it yet?
maybe this stream isn't the right place for these questions. I'm trying to follow the discussion but I feel like there are lots of details behind the discussion that I don't know about.
if i AM doing "cost-plus".. i will state my rate... but i will not break down how i arrived at the rate... if they want to know. i will tell them it involves the pay, the labor burden, the company overhead, the profit... they already know we are insured for WC & GL..
what's WC & GL ?
(previously known as Bunny - the only time i've ever changed to calm my boyfriend)
Edited 4/9/2005 3:42 pm ET by lucky penny
I'll have more comments later, but for now I'd like to congratulate everyone here who I consider to be real pros and what we all would probably agree as to the definition of the term "professional."I think that by the time this thread has exhausted itself, we will all: builders, specialty contractors, designers, remodelers, and repair guys (that's me), have developed an important "comprehensive process" that can be refined or reformatted for individual use of or our operations, an as a pricing, selling, closing, and marketing tool.What an accomplishment! After having to deal with so many, for lack of a better word, "schlocks" here in Naples, its nice to feel surrounded by, and interact with, some of the best people in our industry. Makes me feel good about myself as well.Penny, I'm going to email you my three contracts (small, medium and large depending on job price and scope) and The Process so you will have a better understanding of my philosophy and comments about them.
Sonny,
Thanks very much for the files, those will be a big help. The file called CSSI SCA didn't open properly though. It openned in "notepad" and gave it a .dat file ending. I'm wondering if I don't have the right progam to open it. What kind of a program was it created in? Was it Excel by any chance? I've been thinking of getting that for a while but haven't yet.
Live light enough to see the humour and long enough to see change.
-Ani DiFranco
Edited 4/11/2005 4:27 pm ET by lucky penny
This thread is finally heading in the right direction. I read all the recent replies but don't have time to reply to any. I'll get back asap.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
Penny, CSSI SCA was created in AppleWorks, similar to Office Works - a package of spreadsheet, word processor, etc. Will convert it to both a pdf file AND to Microsoft Word for Windows and sen d both to you. Even if the format is not exactly the same, once converted, youll stil get the general idea. I have a hard time convincing myself to drop $500 for Microsoft Office Professional Version for Mac, since what I use suffices. And I'm not even a cheapskate.
Penny:GL: General LibilityWC: Workers Compensation coverage
penny... if i'm building bookcases.. i'm going to design them first.. and that will involve a design fee.. which is a different type of Proposal
if the plans are already available from the owner.. then we will build what the plans say... only specing any variations or changes we want to incorporate
Mike Smith Rhode Island : Design / Build / Repair / Restore
Mike .. I was sitting here reading thru ... and thinging ...
this is like trying to explain remodeling to new construction people ...
then I read a bit farther and saw that's exactly what U had to do.
I'm seeing 2 very different mindsets at work here.
Jeff
Buck Construction
Artistry in Carpentry
Pgh, PA
well, yeah.. i mean fer instance. . how do you build a set of finished stairs in place when the tile guy needs access for a week and a half
or the homeowner is doing the painting....
or you have 7x8 bathroom that carpenters, plumbers , electricians, insulators, plasterers, tile guys, trim carpenters, homeowner painter, plumber , and electrician again .. all have to be scheduled in and out....
to me..it doesn't look very efficient.. or very productive.. but we muddle thru...
all while the owners are living downstairs...Mike Smith Rhode Island : Design / Build / Repair / Restore
Some of my 2Ă‚¢ worth.Dino, I don’t think a DCA is the same as a SCA and a separate fee is generally charged for a design and plans. Both Tom and I get both, and I think Mike does too, and because they are two completely different things. Designing is not the same as what goes into creating a SCA. In fact, the SCA cannot be created without a design (or plans) if it’s a large project. Earlier Penny, you stated: “Just starting our I feel I need to explain myself completely...........” I’ve been in business for almost 35 years, and in nearly every sales call, and often during the project, “I explain myself.” Explaining myself is nothing more than constantly validating that I know what I’m doing and why and validating their decision to hire me, and the “explanation” is sometimes do to the owner’s question or my perception that one is about to be asked. Yes, educating the customer, first as a “potential” customer and after contract signing, an “actual” customer never really stops.Sally is enjoying a coffee in the kitchen or on the lanai wit her friend Mary while I’m working. They both look at me while I’m lightly sanding some casing as part of my prep to painting. Then they watch me apply Liquid Sandpaper to the casing also as part of the prep “system.”“Wondering what I’m doing and why.” “Not that you mention it, yes.”“Come on over here at this other doorway I haven’t prepped yet. Run your hand up and down this piece of that’s called casing. Feel that stuff that feels like small pieces of grit or sand that’s stuck in the paint? Well, it misc. debris from the previous painter, and that detracts from a professional finish. So I quickly and litely run a sponge sanding block over it to eliminate those imperfections. You’ll also see me pour this new paint through a filter so I don’t do as the previous painter did and get the debris onto your trim. Plus he also might not have litely sanded as I do. His way is cheaper, but my way is better. This Liquid Sandpaper I’m using washes the surface better than soap and water, but also slightly softened the old paint so the new paint will adhere better. That’s small but important another professional technique.”That conversation took about 3 minutes of my time. But what it did was to further validate Sally’s decision to hire me, and now to also validate to Mary that Mmmmm, when she needs remodeling or painting, she now knows a “professional” to hire. So I’m always selling myself to anyone around.In another job I might take 90 seconds on why I do what I do to assure a close tight miter, and the reason one want’s a close tight miter.Always explaining. Always selling. And yes - they do remember. I can hear them saying: “Well, Yes. Sonny is more expensive, but he really knows his stuff and does a great job.” Bingo!So don’t think you ever stop selling, or stop marketing, or stop doing PR. It’s perpetual, and it should be for every employee as well, but they must be trained on how to do so.Then when that job is done, I have a pretty good opportunity of charging Sally and Mary another 3% - 5% more than on the previous job because they are now hooked on my “brand.” Using Sonny even becomes a snob thing for some of my customers.So that way the way the first incoming call is handled, The Process, the sales meeting presentation, the SCA, everything done and said in-between and during, and even while doing the actual work - is a “system” - a “system” of furthering the “brand” of the company. Cut our any one part, and there is a disconnect. It’s not good enough just to keep them realizing that hiring you was a good decision on their part. You must continually “validate that their decision was a smart one and reinforce your brand name.OK, so instead of my 2Ă‚¢ it ended up being $1.02.
Dino, I don’t think a DCA is the same as a SCA and a separate fee is generally charged for a design and plans. Both Tom and I get both, and I think Mike does too, and because they are two completely different things. Designing is not the same as what goes into creating a SCA. In fact, the SCA cannot be created without a design (or plans) if it’s a large project.
Sonny, I combine the two functions of design and specifications under the same billing item code, and all hours devoted to any prep work--including an estimate, a bill of materials, any drawings, permit meetings, yadda, yadda--all get billed under that code which prints out as Design and Cost Analysis. Each line item is described further on the invoice, of course, but that's the category.
In a certain way, I don't think you can furnish a completed design without also supplying the materials specifications. I tend to do a lot of that right on the drawings with call-outs, since I am designing a finished project, not just the layout of a new bathroom, bedroom, kitchen, or whatever. Everything is right there in the design--whether on the drawing or in a separate schedule--right down to the moulding profiles, type and grade of wood, stain colour, and finish.
Dinosaur
'Y-a-tu de la justice dans ce maudit monde?
Dino, I'm combining the DCA and SCA too, at this point in my short remodeling career. I don't know how I'd possibly create an SCA , or a proposal with a fixed bid, without having a final set of construction drawings and complete set of specifcations.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
Just starting out I feel like I need to explain myself completely still, do a plan, elevations, little perspectives, cost out everything to the finest detail
Penny, I'm going to offer a bit of advice even though I'm not qualified to offer any.
Eliminate that thought "I'm just starting out". Instead of thinking of that, think of all your experience.
Next. You don't need to explain EVERYTHING. You might need to explain it to yourself, and you might need to do the plans and elevations and little perspective, and you might have to cost out everything to the finest detail TO YOURSELF! That is called "preparation". You then share the plans, the elevations, and the little perspectives, but you don't share every little cost item!
All they want is the bottom line. If it fits their budget, then it's a go, if you've done a good job on the plans, elevations and the little perspectives.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
yes, you make a good point that really the details are so that I feel confident in going forward, that I'm not going to loose any money and everything is going to run smoothly. what the HOs want is to be able to see only the basic details, such as the finishes, the fixtures, the design, the basic structure of the thing and the cost. those are enough for them to worry about and those are the things that I want to know have been settled on (hence a SCA?)
so does that mean the SCA would be the basis of the contract or is there some other contract?(previously known as Bunny - the only time i've ever changed to calm my boyfriend)
blue... in the late '70's they passed federal legislation called the Moss-Magnuson Act.. ( about warranties )
<<<<guarantee excellent results>>>
i never let the word "guarantee" appear in print or cross my lips
i will reassure them that we stand behind our work.. and we have the references to prove it... i can list numerous examples of warranties and promises that are meaningless.. and prefer to have our reputation back us rather than some boiler plate or phraseMike Smith Rhode Island : Design / Build / Repair / Restore
Well, Mike, so far almost every benefit has been scuttled with no replacements.
This exercise isn't going so well.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
Blue,
Well, Mike, so far almost every benefit has been scuttled with no replacements.
This exercise isn't going so well.
WHAT THE HELL ARE YOU READING???????????????????///I Love A Hand That Meets My Own,
With A Hold That Causes Some Sensation.
[email protected]
I'm reading this thread Eric.
All I'm reading is why the SCA are good for the contractor. No one is telling me the benifit to the client.
The benifit is not the same thing as the explanation. I'm having a hard time knowing what their benifit is. I'm totally convinced that it benifits the contractor!
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
All I'm reading is why the SCA are good for the contractor. No one is telling me the benifit to the client.
That's a big crock of shid!!
You KNOW why it's GOOD for BOTH parties.
You don't need anyone to justify it for you.
Whaddya havin' a bad day or somethin???
EricI Love A Hand That Meets My Own,
With A Hold That Causes Some Sensation.
[email protected]
I'll take a stab at a couple of things here.
Sonny deals a lot with condo associations, and they are experienced buyers of services. They know that an SCA is a document they can review and approve/disapprove in a board meeting, and use as the basis of an action. Works for them, but the typical HO does not function that way and is leery of the contractor asking for money up front.
Mike Smith is in business in one place for 35 years (do I have that right, Mike?). He is in a very enviable position, probably more recognizable in his town than the Mayor. In CA I worked for a contractor in that same position, he had taken over his father's business that had been operating since the late 50s. He was in demand and so is Mike, therefore Mike sets the price of admission. I bet that about 1 in 20 contractors is in that sort of position, the rest of us want to be.
Some jobs need an SCA. I looked at one yesterday that does not, and one last week that did. Yesterday the nice man showed me a drawings he had made (plan and elevation) for a simple bath remodel. Correctly dimensioned with the fixtures identified and all that. Enough to 'bid' on if a guy likes to bid. Last week was another story, a nice lady with a newly bought house and a disaster kitchen. She knew generally what she wanted but had not identified everything. Someone is going to have to lead her thru the process of defining the job.
With the framing you're talking about, how many jobs really need an SCA and how many are straight-forward enough that most guys would go ahead an contract for them? I have seen an SCA-type model applied very successfully to design/build, where the contractor brings in their architect to do some design work so that an estimate can be generated. HOs recognize architects as something tangible, and the plans are tangible. When the job comes in lacking much detail, design/build can be sold and is an SCA of sorts. Without that architect component to reassure the owner that they are getting a service, instead of paying for what should be a 'free estimate', it will be a tough sell.
My feeling is that only complex jobs and very established contractors are going to get an SCA. Anyway, I'm going on and on and on when I really need to click back over to Excel and start a takeoff on the wall framing.
David, I think you on track here.
Before I comment, I need to make a correction about one of your assumptions about what business I'm applying the SCA to. It isn't about framing. I guess it might be confusing because most oldtimers in here know that I only frame. This year, we decided to move out of the wholesale framing business. At the time of the decision to move away from the wholesale business (selling our services to builders), we decided to go after the retail market on several levels. We are targeting major remodel projects (additions, second story additions, etc). We are targeting custom builds (new homes). We are continuing our involvement in the framing business (we have to because that is our source of cashflow) but targetting homeowner self builds.
When we decided to target the retail market, we quickly decided that we didnt' have the skills or time or desire to wear every hat, like most small contractors do. We simply decided that we'd use sales professionals and concentrate our efforts out in the field. Essentially, since we are in the infancy stages of this transition, I'm acting as sales manager. I don't intend to permanantly stay as sales manager, but until I have one (we are in negotiations with one), I'm doing my best to develop some marketing aids, thus the need for a thorough understanding of the SCA!
I was thinking about Mike's reply and how it relates to me. I've spent the last 15 years REFUSING to bid any work for homeowners. The only exception is that I occasionally framed a house for a tradesman. If they weren't tradespeople, I simply passed on every homeowner's request for work to a fellow framer/remodeler. The lack of homeowner contacts creates a huge void of referrals. In essence, I'm starting from ground zero. I'm okay with that, because I do have a huge background in construction and a solid infrastructure of trades and equipement and knowledge.
Mike might be able to use his reputation and referral base to set the starting terms, but I've got a little more work to do. I may still have the ability to set the starting terms, I just need to develop the proper presentation to do it. I have to understand the flow of the presentation and at this point I'm not convinced I know what that is.
I agree that not all jobs need a SCA and I'm thinking of ways to offer an alternative. One alternative that comes to mind is to pull out my presentation book, showing my past remodeling projects, and show what each project sold for. Unfortunatly, I don't have any remodeling projects in my book yet! LoL!
Thanks for the help.Just because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
as an HO why would I want to pay for an SCA/Proposal.
well, hopefully it reduces overhead so I may pay less overall
has the potenial (tentitive) to reduce included $ risk
(depends on how the sca is done, doing the exact same thing as a bid, and charging for it does nothing for me)
I want to own the results of the SCA
want to be part of the decision making process of how my money is spent (not micro manage but have I say)
low down on the list woild be knowing wether we fit (HO-contracter)
regarding decision making, can decide early about fixtures, flooring material, windows, etc. the things that make me feel good about what the place looks like.
as for me personnal, also get to discuss how the thing will be done
and while all the discussion is going on getting some feel for what the cost will be
if i had an architec, getting to discuss real world realities of the design.
course what is being done has a great effect on what i get out of an sca.
going lowest price has its place, when you understand it
bobl Volo, non valeo
Baloney detecter
The problem with your laundry list bobl is that they will get all those things free from someone else.
So far...no benefits.
I'm beginning to think that SCA's are a bad deal for homeowners.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
the devil is in the details.i don't think u get for free what u can get for the SCA/proposal
bobl Volo, non valeo
Baloney detecter
Blue,I don't think SCA's are good or bad for homeowners. There are contractors who are diligent, honest and forthright, and who make the process of planning a project (large or small)as painless and trouble free as anyone could hope for. Some of these folks charge for that type of service and some don't. All a homeowner wants is the contractor I just described. They could care less about SCA's. They just want to be taken care of at a fair price.It seems to me that the only people SCA's are demonstrably good for are contractors. I am always happier when someone is paying me for access to the knowledge I've accumulated over 20 years. Like a doctor, lawyer or any other professional, that knowledge is worth every nickel I charge for it. Just my $.02Mike
blue.. the SCA is a great thing for the homeowner.. if they want a quality contractor, this is how they get one...this is how they get ME
no tickee, no washee..
are there other ways of getting a quality contractor... sure.. maybe... well i don't know..
let's look in the yellow pages... hmmm
"free estimates"... "fully insured" .. "free estimates"... fully insured" but most do not mention the word "estimate"
the ones that do... it's "free"
except one.. he said ""detailed estimates".... wonder what that means?
anyways.. Who says we can't , or don't , or should , charge for Proposals ? Bill Hartman ?
uh, oh.. bobl ? uh, oh... guess i won't be getting a call from them .. wonder if they would have hired me if the Proposal was free ?
how 'bout it Bill, Bobl ? if i worked up my Proposal for you for free , would you hire me ?.. yeah, i know... silly question.. maybe yes, maybe no....but here's the deal..
i run a good company, satisfied customers, the phone keeps ringing... but every day is one less day for me here on god's green earth.. should i give away my time to people who MAY , or MAY not hire me ?... or should i spend my time in return for some compensation?
let's see.... i started charging for proposals about 6-7 years ago.. i'd guess that before that i spent at least 200 hours ( probably 400 hours, but let's settle for 200) every year, figuring jobs that i never got.. or .. figuring jobs that never even got built...
i think i'm down to about 20 hours every year now , figuring jobs for free , that i never get..
that's 180 extra hours i get every year...that's 36 rounds of golf....hmmmmm..
or.. 180 hours that i can devote to a customer who is paying for my timeMike Smith Rhode Island : Design / Build / Repair / Restore
"how 'bout it Bill, Bobl ? if i worked up my Proposal for you for free , would you hire me ?.. yeah, i know... silly question.. maybe yes, maybe no....but here's the deal.."huh?56672.17
the devil is in the details.i don't think u get for free what u can get for the SCA/proposal
bobl Volo, non valeo
Baloney detecter
"anyways.. Who says we can't , or don't , or should , charge for Proposals ? Bill Hartman ?"I have not idea what Bill Hartman said,But from Bill Hartmann - I NEVER SAID ANYTHING LIKE THAT!As I don't give a damn about how much time that you have for golf that "arguement" does not move me.The only thing that I has seen that is of any value to the client is that is they "pay you they get a good contractor".That might be true.But are you willing to guarantee that everyone in the country that pays for an SCA get a good contractor and if they don't you will do whatever it takes to make the job good?
Edited 4/6/2005 6:40 pm ET by Bill Hartmann
"the SCA is a great thing for the homeowner.. if they want a quality contractor, this is how they get one..."can't agree with this I won't argue wether you are a quality contractor or not, my mind is made up on that already (how's that open for interpretation? hehe)because you pay for an SCA does not mean you get a quality contractor automaticly.in choosing a contractor you still have to do your homework.I think too many people take the complexities too lightly on both side of the table.they don't fit what needs to be done with how to buy it. they try to fit everything into the same mold. u can't do that.
bobl Volo, non valeo
Baloney detecter
no.. bob... and bill.. it has nothing to do with wether they get a good contractor.. it does have a LOT to do with gettting a contractor who is organized.. who can communicate.. who can execute a CONTRACT
BTW.. i'm a contractor... i administer contracts.. i whimsically call myself a builder.. but first and foremost i'm a contractor..
i think part of this is that a lot of good tradesmen are lousy businessmen..
i think it takes a good businessman to write a proper SCA, or a Proposal.. what they amount to is a written description of what is going to happen... and in my case.. how much i'm going to charge
but the bottom line is still the same.. if they ( or you ) want me... you'll have to pay to get me
i don't care what my competition is doing or not doing.. i happen to know that if they do all of the things we do.. they will deliver a good product and a satisfying experience to the homeowner..
behind the veil.. the problem still comes back to that stupid word ....
"estimate"
i deal with a lot of subs.. because of my history with them.. i am content to get a $20,000 quote on a piece of paper they riped off a pad.. i already know what i'm getting ... and i'm writing the spec anyways
but there is a value to my customers in the paperwork i sell them.. i condense my 30 years of experience and commit it to writing..
their phone call to me is free.. probably entertaining to both of us..
if i like what i hear.. i'll venture out for a meeting.. at the end of that meeting , they either hire me to do a Proposal or we go our seperate waysMike Smith Rhode Island : Design / Build / Repair / Restore
somehow I think we are in two different conversations on the same topic, at the same time, in the same place.I have no doubt about the quality of YOUR proposals or what your customers get.But that does not mean that everyone who prepares an SCA/proposal will do the same quality SCA/proposal or that a well prepared SCA/proposal means that a good job will be done. those are general statements. in talking about an individual company, they must be tailored to that company.You seem to be taking those type statements personally. they are not questioning your abilities or quality.regarding how I feel about paying for an SCA, I can see value in it.
bobl Volo, non valeo
Baloney detecter
But that does not mean that everyone who prepares an SCA/proposal will do the same quality SCA/proposal or that a well prepared SCA/proposal means that a good job will be done.
re: your responce to Mike. I don't recall ever reading that statement. Of course one could not qualify such a statement.
ur splitting hairs, mostly yours.
EricI Love A Hand That Meets My Own,
With A Hold That Causes Some Sensation.
[email protected]
I have no idea what you're talking about.
bobl Volo, non valeo
Baloney detecter
Blue, you cannot explain the benefits of "The Process" or the "SCA" unless unless you first let them know exactly what an SCA is. As stated in The Process:
Thanks for weighing in here Sonny.
I'll agree, it's pointless to try to explain the benefits of the SCA unless they know what it is. So my plan will be to explain the SCA, then state the benefits.
You've graciously given me the explanation of the SCA. Now, can you also please state the benefit?
TIA
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
I have come to these conclusions about the SCA and its value to the client.
An SCA only makes sense in the case of an owner with a relatively vague scope, wishing to work with a design/build contractor.
When I say "relatively vague," I mean that they have a good idea of what their project is to be, and do for them, but they have not committed to having detailed plans and specs prepared.
For the cost of the SCA, the client will work with the contractor to flesh out a budget and a scope, get those plans and specs prepared, and have an absolutely clear presentation of the total cost of their project, including projected cash outflows.
They will have a proposal that meets their budget, because the contractor and client will have had plenty of dialogue during the SCA process to come to an understanding of the required budget, and he will have prepared an SCA that meets it.
They will be free of the anxiety of wondering what it will really cost, or what kind of cash outlays are required when, because the SCA will be a lump-sum proposal of contract, with dates and draws defined. They won't have to ask, "what does T & M mean?"
I don't think a client will be willing to pay for an SCA for a simple bathroom gut and remodel . . . a job like that is too straightforward and there are contractors in the biz that do good jobs without charging for proposals.
I also don't think a client is willing to pay for an SCA if he has already gone and paid an architect or designer to define his project with a good set of plans and specs.
If Mike Smith is reading this, I would like him to reply to this: my guess is that somewhere within his operating territory, there is at least one well-qualified and respected remodeling contractor, excellent at design-build, that does all or the great majority of his work on a cost-plus basis. If this firm or firms exist, Mike, do they charge for an SCA, and do you consider them direct competition?
The reason I am asking this is because I believe that regarding SCAs of the type Mike expounds, there are basically two types of clients. The first type wants a more precise type of project and cost definition, and therefore benefits from the SCA process. The second type, and I believe there are many homeowners like this, are willing to choose a remodeling contractor on the basis of "softer" criteria, and therefore really don't need or get a benefit from an SCA.
"The first type wants a more precise type of project and cost definition, and therefore benefits from the SCA process. The second type, and I believe there are many homeowners like this, are willing to choose a remodeling contractor on the basis of "softer" criteria, and therefore really don't need or get a benefit from an SCA."
I believe this hit the nail on the head regarding the benefit of the SCA, it may or may not be beneficial to the homeowner based on his perception of the project.
Homeowners in general perceive bath remodels, siding, window replacements etc as simple in that if everything looks good, then it must be installed correctly. The SCA breaks the job down into more specific detail in the flashing methods used, type of tile backerboard etc. If the homeowner does not recognize the difference in installation techniques and materials then they see little benefit in the SCA.
Also, many homeowners do not recognize the difference between an estimate and a proposal. The low estimate may not deliver the lowest cost final job. Or the low estimate may require shortcuts that are needed to keep the contractor in his desired profit range. The benefit to the detail oriented homeowner is the SCA is basically the contractor thinking through the job and putting this information on paper, therefore the fine details that go into jobs are not overlooked by the homeowner. The homeowner will then question (**hopefully**) whether the other contractors bidding on the job will follow the same procedures.
Is that it?
Not quite.
I should have qualified that in discussing the SCA, its value to the homeowner, and the homeowner types that can or cannot benefit from it, I only mean:
An SCA for which the owner pays the contractor for its preparation.
My guess is that most of the time an SCA is paid for and delivered, the homeowner chooses to enter into a contract for the work, perhaps modified, but with the contractor who prepared the SCA.
These homeowners, having paid for the SCA, typically don't go and shop the bid to other contractors.
But that said, I think that there are plenty of homeowners who choose to have major remodeling, addition, restoration, or renovation projects done by well qualified design build firms, and go down a "cost-plus" path with only a vague sense of where the project will go, money-wise.
Those types won't benefit from an SCA. They chose their contractor some other way, and are willing to "choose and change" as they go.
The reason I am asking this is because I believe that regarding SCAs of the type Mike expounds, there are basically two types of clients. The first type wants a more precise type of project and cost definition, and therefore benefits from the SCA process. The second type, and I believe there are many homeowners like this, are willing to choose a remodeling contractor on the basis of "softer" criteria, and therefore really don't need or get a benefit from an SCA.
Ahah! Now we're getting somewhere!
Lets assume for now that I agree with your assessment Gene. The benefit to the first type would be "Mr Client, because you want more control, over the value engineering and design, you probably might want us to do a Cost and Specification Analysis."
I would then proceed with my alternative closing. "If the Specification and Cost Analysis is not something you are going to need, then I'll be happy to write up my ballpark as a fixed bid right here on the spot, but beforewarned that I might be overcharging you for this project by as much as 15 or 20%. The only way I can properly give you the best price possible is to very closely analyze and bid out every aspect and detail of your project.
So, Mr Client, would you prefer to get the $2500 SCA started, or just sign the 100k proposal knowing that you might be paying as much as 15 or 20 thousand too much?
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
Gene, I really can't believe that after everything you stated, you prefaced those comments with this:"An SCA only makes sense in the case of an owner with a relatively vague scope, wishing to work with a design/build contractor."Everything you stated afterwards would be of value to "anyone" and “everyone”, not "just” those with a vague idea of what they want done. And besides, what percentage of the buying public is so thoroughly versed in the remodeling "process", contracts (and their specific parts) used by remodelers, content protection particulars, Band name and model numbers to be mandated in the contract, and every thing else, that of us "professionals" take for granted as part of the entire enchilada?I have customers who have had numerous remodeling projects done in their lives who are still surprised at the comprehensiveness of our SCA, and furthermore, appreciative of it and it’s format.
Sonny, I tried to make it clear, but maybe I didn't.
"Everybody's" not alike. We're not all the same. It takes all kinds. Yadda, yadda, yadda.
Many people are happy to choose a contractor based on what I said are "soft" reasons. The money is sort of important, but they are trusting souls. They've been referred to a guy, he's talked to them, they have come to trust him and like him. Maybe he did a great job for their best friend or relative.
They hire him. The deal is vague. They sort of have a budget. But, he's a great guy. He may have even said something in terms of dollars per square foot.
I know people who have built really high end houses this way, others who have done ground-up restorations, and others who have simply added a bump out to make their den bigger. They are happy with the process because for them, the process is an iterative one, in which things just evolve as they go.
You must know lots of people, as I do, that say, "how can you decide what you want from a bunch of drawings and specifications?" The producers of the This Old House show on PBS must think that most all their viewers think this way, because in series after series, they show most all the interior design and selections happening well after the structure is up and drywall begun. They've often shown window sizing and placement done after the framing is well under way.
So, SCAs aren't for everyone. Only for those that understand them, need them, and want them.
Gene, first, I'm glad your back here busting our cahones. I really missed you and hope things are going good for you.What's an SCA -? It is nothing more than a Proposal. And it's that same Proposal I gave for years and years before I decided I wanted to get paid for the time that went into it. but, to get paid for it, I knew I had to change what it's called, so I came up with what it really is - a Specification and Cost Analysis. So to get paid for it I had to explain what goes into getting the info needed, to arrive at the total cost that gets typed into the SCA.Someone else stated that the SCA is really not to be sold by itself, it's part of a "process."Here's how I see it and use it as only 1 of about 4 different parts. We all want to present ourselves as professionals.1. The incoming 1st sales call is to be sold professionally.
2. The Process was created to be sent to the potential customer "before" the first meeting.
3. Then comes that 1st sales meeting. Again you reek of professionalism and of course bring photos, "tools", etc.
4. The sample SCA then, that you show them, as do #2 and #3 above, reinforces the professionalism. So the SCA is like a part of a marketing program. No. It IS a marketing program. A program to sell you - the contractor, over competitors. As such, as I stated above, the SCA is only one part of the "program."In the book "The Strategy of Tactics and Pricing", the authors state in the chapter entitled "Pricing Psychology":"First, a customer's response is determined not only by evaluation of the produce and it's price, but also by perception of the entire purchase situation. Thus, one aspect of pricing strategy is the presentation of prices in ways that will influence those perception to the sellers benefit."Forget about what they want to buy. Just get them to realize that if what they want to buy is within your realm of expertise, it’s you and only you that they want to work with. So we’re back to the fact that you have to sell your self 1st, as their cat’s meow, and as their personal “advisor.”Regardless if I'm selling a $10K remodel, or when I used to sell a $800K remodel, or evena only a $400 repair, the first thing I do is get them to realize that I am an expert in what they want to do. I sell myself so in their "perception" it would be foolish to even consider anyone else. Once I have accomplished that feat, without realizing it, they have transfered control of the sales presentation, everything else inbetween, and project itself over to me. I then become like their lawyer, offeriing advice, this and that, and them taking my suggestions or making decisons of options I offer. They are now off the market.
2. The Process was created to be sent to the potential customer "before" the first meeting
Ahah! Bingo!
That's a tidbit of information that will help me make sense out of all of this!
BlueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
Boy! I thought I mentioned that to everyone I emailed it to. The reason is so they can see what's involved "before" you meet with them. It also acts as a qualifier since it includes the fact that you charge for an SCA, but explains what goes into the SCA, hence justification for it's charge.BTW, with the long contract, we don't use Change Orders as everyone else does. We only use a Change Order if there is not price change, like a color change. Otherwise, we use an Additional Work Authorization for changes that increase or decrease the scope of work, but mainly impacts the original contracted price. My attorney like that since it's title says that by signing they are "authorizing" and additional cost factor for "additional" work to be done.And lastly, if there is any change of any sort after the contract is signed, but "before" work has started, we use an "Addendum" to the contract. The attorney liked that as well, so we stuck with it.Also (again) if it helps, I use what is called an "invasive" inspection (think Toms does too) to eliminate potential surprises and their subsequent additional costs. Customers like that, and I have yet to do any invasive inspections (wood rot, leaking plumbing, wiring, etc.), where the customer decided NOT to use me. Once they commit to and approve the invasive inspection - the project is a go.
I have customers who have had numerous remodeling projects done in their lives who are still surprised at the comprehensiveness of our SCA, and furthermore, appreciative of it and it’s format.
Sonny, maybe I'm not fully understanding of how/what your SCA actually looks like and therefore cant' appreciate it's effectiveness.
Is it possible to email or post a copy of one?
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
Blue, I think you already have one. It's the long contract. If not, I'll email one to you along with it's cover letter and ending letter.
I have that long contract. I'll have to take a look at it again and think about it in relation to this thread. Thanks.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
forgot to mention, emai lme with yrou address again. I want to send you a book to read. It's the one I mentoned earlier:"The Strategy and Tactics of Pricing" by Naple ad Holden. Tag line is "A Guide to Profitable Decision Making." Easy reading and you may, as I did, pick up some good info. Here are the content pages:http://www.amazon.com/gp/reader/013026248X/ref=sib_dp_bod_toc/103-9886843-4325439?%5Fencoding=UTF8&p=S003#reader-linkNight guys (-:And a few pages from Capter 1:http://www.amazon.com/gp/reader/013026248X/ref=sib_dp_bod_ex/103-9886843-4325439?%5Fencoding=UTF8&p=S00D#reader-page
Edited 4/7/2005 11:50 pm ET by Sonny Lykos
Sonny, email me at [email protected]
You can hit my name and get that email works too.
Thanks for that info regarding the evasive inspection. I like the idea of proposing that and it only makes sense.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
Sonny, that doesn't look like "easy reading" but it does look like something I need to read.
I'll add it to my list.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
<<<
If Mike Smith is reading this, I would like him to reply to this: my guess is that somewhere within his operating territory, there is at least one well-qualified and respected remodeling contractor, excellent at design-build, that does all or the great majority of his work on a cost-plus basis. If this firm or firms exist, Mike, do they charge for an SCA, and do you consider them direct competition?>>>
is there a "cost-plus design /build firm that charges for an SCA" ?
if they are cost plus and they are doing an SCA , then they must be charging for it..
a better question would be.. is there a design /build firm that is charging for Proposals?
my guess would be YES... i would imagine that Davitt Woodworking would charge for everything..
i would think that any good firm around here is chraging for everything..that would be the only way they could decide on which clients to service
are they my competition ?
i don't know.. i think customers who call good firms tend to wind up doing business with those firms... the firm has to screw the pooch .. or there has to be a personality clash in order not to do the deal...
i close most of my house calls.. so i know nothing about my "competition"Mike Smith Rhode Island : Design / Build / Repair / Restore
Blue, how about this.
"Mr. and Mrs. Customer, allow me to tell a story to illustrate the point. True story by the way. In 7th grade I had a cavity filled by a dentist that was in a hurry. I got the shot, and he started drilling before I was numb. In fact I think he was finished before I was numb!"
"Because of that I did not go to a dentist for 23 more years. I had a big fear of the pain. Finally I had a tooth that needed some attention. Really, I finally went to the dentist 4 years after it needed attention.................The dentist told me the 2 words I dreaded most......."Root Canal"
"He then sent me to an endodontist. The endodontist examined my tooth, then he showed me a video explaining the whole process. He listened to my concerns, and acknowledged the fact that I am a complete wuss when it comes to pain. He went over the steps he takes to make sure I would be comfortable."
"The day of the operation, I was much more relaxed, and comfortable. So much so that I nearly fell asleep in the chair while he was operating."
"Mr and Mrs Customer, what the Specification and Cost Analysis does, is provide you with a greater degree of understanding and comfort while your house undergoes a root canal. Ideally, you will fall asleep in your chair, because you are so relaxed."
What you think? I was thinking about your question last night and tried to relate it to something I have gone through.
Or how about this short version.
" Mr and Mrs Customer, the Specification and Cost Analysis allows us to become a team. That Contractor/Client team can then move your remodeling project from being a gamble, to being simple risk management."
So what the client is getting, is comfort and relaxation.
And I think I would help to stop calling it an SCA, and actually say "Specification and cost analysis" (To my ear it sounds more definitve than SCA. (FBI, SCA, CIA, DOT, NAHB.......))
Bowz
Bowz, your story is great. That reminds me a sales cliche that was pounded into my head at a sales seminar "Facts tell, Stories sell."
I think too, that you are moving me much closer to where I want to be with your condensed line; " Mr and Mrs Customer, the Specification and Cost Analysis allows us to become a team. That Contractor/Client team can then move your remodeling project from being a gamble, to being simple risk management."
Maybe by rewording it, I can create a sentence that uses the words "eliminate the gamble that is inherrant in typical mulit-contractor merry-go-round bidding process"
Or something of that nature.
Thanks for the thoughts.
blue
Just because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
Blue,
This is mearly an observation and not being critical. You seem to constantly strive for a clear road map in every aspect of business. None that I am aware of exist. There are many ways to go from A to B profitably. Picking one that fits your style is key. But there is never any true perfect solution or guideline. Spending all your time getting ready to make money is seldom turns out to be profitable. Just a thought. DanT
Spending all your time getting ready to make money is seldom turns out to be profitable. Just a thought. DanT
That's funny Dan.
I've been self employed since about 1982. I just happen to be re-inventing myself and I'm attempting to create a system that will allow me to run the business without my direct involvement. I'm not just trying to create the system, I'm fully engaged in it. We already have commissioned one salesperson and are in negotiations with another. The sales person has already went on sales calls with me and is going on one tomorrow with Frank.
Would you suggest that I abandon my need to know the benefits of an SCA?
blue
Just because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
"Would you suggest that I abandon my need to know the benefits of an SCA?"
I am making no suggestions nor did I have any intention too. I was just giving an observation of reading a number of your posts over the years. Just something to think about. Nothing more. DanT
Dan, if your intentions are good, then thanks for the wisdom.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
I gave the same insite to my brother a few years back and I am kind of fond of him. :-) DanT
I'm feeling like i can help you out here blue. With all the help you've given me I hope its the case.
It appears to me that you're looking at the SCA as an item to be sold when you should just make it part of the process.(Right Mike?)
For Example, "Hey Mr Homeowner, the project you're talking about is going to require lots of attention to detail and I've(in my many years of experience) been involved in jobs with few details and plenty of WAGS and projects with every detail spelled out to the sixtenth or to the penny. Guess which ones went better.
The SCA/Proposal process helps you and I come to agreeance on the specific Items placed in your home. It will take time for me and you to evaluate the merits of many valuable decisions. Some items I'll make reccomendations on some items I'll need you to evaluate on your own. whatever input you need from me will of course be available but you are gonna have to decide if you need a 200 gallon swirly jet bath tub or whatever you want to soak your but in. Time is money and this part of the process itself will cost you some money because I will be investing some time. Think of me as your experienced conscience. In my experience this process has saved customers money and helped avoid costly change orders."
For you from here on out its simply part of the PROCESS. The benefits are almost self-evident to the customer.
Edited 4/7/2005 5:47 pm ET by TMO
Edited 4/7/2005 5:48 pm ET by TMO
In my experience this process has saved customers money and helped avoid costly change orders."
Tmo, thanks for the help. You actually included a benefit in your little speech, I've added the bold.
I like the conciseness of your thought process. I like it because it has a very distinct ring of truth to it. It gets to the core of the message very quickly.
I'm going to think of a little story to preceed your statement that illustrates the wisdom of your statement.
You have been helpful, along with several others. I'm still wrestling with a few confusing thoughts about this entire idea. I'll admit that I'm not the sharpest bowling ball on the rack, but if I keep digging, I know I'll find what I seek. It's important to me to have the answers buried in my core, because that's the only way I can sell it. Even though I'm not going to be the guy at the table selling it, I need to be able to sell the idea to the salespeople representing us.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
Blue I hope you're right. It was a paragraph paraphrased from a meeting I had yesterday. It seemed to sit well with my customer. I told him, using words gleaned from you I'd give him a wild A ss guess and an offer to spec the job, do the design, pull the permits and hammer out the details for a fee.
"Get it right the first time" was another benefit I used to sell myself, this process and the SCA.
Blue you are clearly on the right track. Had you not started this process I wouldn't have even tried this concept. I am confident it will work for you and for me and for anybody who set thier mind to it.
In a sense the SCA is a screening device for customers as well. I know mike either alluded to it or flat out stated it. Of course there are different types of customers. Me, I am gonna offer my valuable services to those who respect my time and like getting the details right BEFORE we start the job.
Thats not to say that certain details can't remain fluid but with the sca we will know what they are specifically and when during the process we should plan for them.
Edited 4/7/2005 11:08 pm ET by TMO
Blue you are clearly on the right track. Had you not started this process I wouldn't have even tried this concept. I am confident it will work for you and for me and for anybody who set thier mind to it.
I'm glad you found a reason to try this concept. I started this process (creating the PP and the branches of the PP) because I have a need for my own business. I'm glad that someone is benifitting but my real motivation is to serve my own interests although I think it provides an outlet for those that like to share their secrets.
I see the SCA as a screening device too, and I'm very focused on NOT WASTING A LOT OF TIME ON BIDS THAT I WON'T GET. I am serious about one thing though. If someone doesn't want to "waste money on an SCA", I'll be willing to put a hard number on a contract, right there on the kitchen table. I'll simply use a number that I know for sure will work. I'll tell them I think I can do an SCA and offer the project at 100k, but will sign a hard and fast contract tonite for 150k.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
blue.. <<<I'll be willing to put a hard number on a contract, right there on the kitchen table. I'll simply use a number that I know for sure will work. I'll tell them I think I can do an SCA and offer the project at 100k, but will sign a hard and fast contract tonite for 150k.>>>
i know a very experienced remodeler.... who is more successful than i ( Remodeler Big 50)
he cut his operation , sold his office building, reduced his staff.. all to avoid bankruptcy due to a contract he lost $200 on....
the job was estimated wrong..
what makes you think you can sit in one meeting and set a number that you think will protect you ?
i never offer "estimates".. i never give "ballparks" i've trained myself not to..
it actually plays into the hands of the customer who is reluctant to pay for your services.. they already value you.. how do you know ?... thye decided to spend some the their most valuable asset.... their time ... listening to you..
if it's so easy to come up with an "estimate" ( $150K ).. how hard can it be to come up with an SCA?.. obviously the computer is going to do all the work ... ain't it ?
no... the only numbers you want to "give " away are real numbers..not estimates..
" well , we built Mrs. jones bedroom addition , which was "similar in scope" to your.. for $130K, not including landscaping .."
if you don't have a presentation book yet.. you can use Remodeling Magazine's Annual "Cost of Projuects " ( or whatever they call it ).. the issue just came out last weekMike Smith Rhode Island : Design / Build / Repair / Restore
That's a good tip Mike. I'm going to go pick up a copy. (the remodeler thing)
what makes you think you can sit in one meeting and set a number that you think will protect you ?
Because I get to write the plans and specs after the fact.
The statement wouldn't be made hoping to get a check for 150k, it would be made to illustrate the amount of savings availabe vs my need to cover my costs due to the vagaries of the situation.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
look for previous years too.. they make great eye-openers to people who have no clue of what things cost ( Remodeling Magazine) BTW " Remodeling " is FREE
if you can't find a copy with the subscription formin it... lemme know and i'll mail you oneMike Smith Rhode Island : Design / Build / Repair / Restore
http://www.remodeling.hw.net/industry-news.asp?articleID=79166§ionID=173
Is this the report that you are talking about?
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
yup... they come out with that report every year
quite an eye opener.. especial the categories where they have "mid-range" and "up-scale"Mike Smith Rhode Island : Design / Build / Repair / Restore
Mike, scroll back a day or two in this thread. I posted one to "ALL," but there was a question posed to you, apropos this thread. You probably didn't see it.
Who's on first?
why am I picturing laurel and hardie as I read thru this thread?
I'm thinking everyone should clear their heads and throw away their preconcieved notions ... then go back and read what ya actually wrote!
Pretty clear to me. And U talk funny ... so it must be basic.
and Blue ... yer not selling products .. or services ... or anything like that. Yer selling yourself. No matter what U are selling. I'm thinking you are overcomplicating this. Sounds like U are trying to sell "selling" to the customer. U don't have to "sell" an SCA. U just have to present it as the way thru which U do business, if U are going to actually do business that way.
That's what Mike is saying ... it's an "either/or" with him.
Either U pay for his SCA ... or U find someone else. Very basic.
Jeff
Jeff Buck Construction
Artistry in Carpentry
Pgh, PA
"and Blue ... yer not selling products .. or services ... or anything like that. Yer selling yourself. No matter what U are selling."Exactly.And what the HO want is a solution to their problems, they don't want no stinkin SCA.The SCA is just a TOOL. Just like a trim carp has SCMS. But the trim carp does not try to sell a trim job by talking about his SCMS. The client don't give a sh*t if he cuts the trim with his teeth.
Blue, you cannot explain the benefits of "The Process" or the "SCA" unless unless you first let them know exactly what an SCA is. As stated in The Process: "A Specification & Cost Analysis is a definitive comprehensive document stating the final costs, allowances, material selections with brand names, and all particulars of the project as agreed upon by us all. All SCAs include a complete set of CAD drawings and plans.Preparation for a SCA includes evaluation of existing construction and current building codes and possibly engineering. If a room addition is involved, site planning as well and again engineering.The SCA can be compared to a “brief” in the legal profession, which is defined as “A document containing all facts and points of law pertinent to a specific case.” In our “case”, containing all facts of the home and the
anticipated remodeling project’s details, and by phase.
Creating a SCA takes anywhere from several hours to several days, when taking into consideration: designs, meetings with specialty contractors (SCs), material suppliers, estimating calculations, the time mandated by permitting requirements, and even more. The “estimating” process of the SCA involves many hours of line item costing of every single operation of each phase to reach the final total cost. It is also based on each SC’s own bids as well as those bids from the suppliers. No ambiguities or guesses are allowed.
Depending on the project and it particulars, the fee for a SCA can be $250 or more for a major bathroom remodel, $500 or more for a complete kitchen remodel to well over $2000 for a major projects or those costing well into six figures. As the cost and square footage of a project increases, so does the time needed to create an accurate SCA, and accuracy is critical. In addition, the SCA eliminates nearly all surprises, ambiguity, assures an agreed upon contract that is realistic and viable, and has everything discussed - on paper - where everything should be."So you can explain that the SCA not only denotes the obvious info, but combined with the contract (have you seen our large contract?), the what's, whens, hows, and whys. are all delinated. No "gustimates." No "ambiguities." As like a legal "case", all facts concerning their paroject are there to seen, accurate and on paper. The completed , page by page, large contract (SCA) is one hell of a document that would certainly set you apart from any competitors. IMO it is "professionalism" defined.
Sonny,
thanks for the explaination of the SCA. I've been following this stream with a lot of interest because I'm just trying to get my own design business off the ground with my first independent project for some friends. before this I worked in an architect's office where I didn't need to explain any of this. there was a steady stream of business that I was never involved in procuring and the Process was otherwise understood.
now I'm doing a basement renovation that has been initially costed in what I would consider a very vague way by the contractor that they've chosen to work with. they "trust" this contractor who was recommended by what I would call a qualified friend but am still uncomfortable with this more casual way of proceeding. the quote was a list of the "tasks" involved in the reno given first and then a total cost for materials (not itemized) and a total cost for labour (also not itemized) and a few individual prices certain items. All of this based on the schematic design (not construction) drawings that they had decided on.
the contractor does seem like a good guy and he is who the "clients" my friends have decided to work with so we have had a meeting all of us together to begin to work out the details of the systems and materials, a combination of what I know about and would recommend, what the contractor is experienced with and what the priorities of the HO's are in terms of where they want to spend their money.
this is a long way of saying I've learned from this experience and this stream is giving me lots of ideas. it is certainly benificial to go in with a detailed Process to explain to the clients.
as far as selling an SCA, I would say.......
1. as someone said it is a team effort and everyone on a team has responsibilities. that means it is the contractor's responsibility to put down on paper exactly how he's going to proceed and the homeowner's responsibility to help make those decisions and approve the plan and SCA before beginning construction.
2. that was a very good suggestion to bring an example of an SCA to the first meeting with the clients because they for the most part do not understand just how many choices and decisions there are to make in a project and that it is certainly better to make changes to these decisions on paper rather than after something has been built(previously known as Bunny - the only time i've ever changed to calm my boyfriend)
Thanks, Penny. We often forget that the public has no way with which to differentiate one contractor, or designer from another. We have no model numbers, brand names, and don’t sell a “product” that has already been made that can easily be seen at some retailer. So unless we intentionally plan for, a reason for these potential customers to some how get an idea of “who” we are, “what” we are and represent” or otherwise give them something “tangible” to justify in their own minds why they should hire us, much less even trust us.So again, we must sell ourselves first, second and last. Only after we have sold ourselves as the preferred contractor or designer, will what we say sink in. If we don’t, much of what we say is not even heard, and they will revert back to using "price" as their only cirteria as the basis for a decision because that is the only thing we will give them.That’s why IMO, the combination of how we answer the phone and what we say, and ”how” we say it, The Process, the sample SCA at the first meeting, and the “presentation.” In the past I have suggested to some to buy a book on making presentations just as though you were going to make one to a meeting of a company, a church group, YMCA group or whomever. And because in effect, what we do when selling ourselves and any project, is in a “presentation.”
Sonny, I agree, the presentation is everything. If the lead is a referral, and a good presentation is done, I don't see how the job would go to anyone else.
And I also agree that the presentation starts with the first contact.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
I'm thinking you are overcomplicating this
I don't agree. I'm trying to uncomplicate this. I don't intend to be the guy at the kitchen table selling. In order to accomplish that goal, I have to create a salesman training system. One small component of the salesmen system training will be the marketing of a SCA. I need to be able to succintly state what the benefits to the client are.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
I think too many people take the complexities too lightly on both side of the table.
BINGO!!
The fact that the homeowner takes the complexities too lightly is EXACTLY the reason that they should consider paying a proffesional for an SCA. They basically are clueless, and need to hire the services of a proffesional to guide them in the direction of their choice.
How will they get that for free??? And if they do get it for "free", how well do you think it will be thought out??
Wouldn't someone that is getting paid do a better job at helping Mrs. Paulson discover what and how it will be done??
Even if a contractor does an excellent job at this and says it's "free" , do you really think it is??
When the contractor take those same complexities too lightly, he will draw up a plan and a price that basically appeared out of thin air before his eyes. Now, he may well struggle to deliver what HE feels responsible to deliver, but what about the rest of the contractors?? And although he may fulfill HIS obligation, what happened to what the HO WANTED and THOUGHT they were getting??
Too often, WAY to often, a contractor will walk into a home and the client waves his arm in magical strokes throught he air, asking and wishing, as though some fairy GOD-Tractor will suddenly just make it all happen!
And then one day they wake up, and find they are sick and tired of dealing with the mess, and not having a kitchen for 6 mos. when they were "told" it would take 5 weeks.
And it merely becomes another complaint to add to the heap of why contractors top the list of consumer complaints.
I try to squeeze information out of pro's all the time, but I damn well realize, that if I want a rock solid answer to my inquiry, I had better pay him, or go home and make my own bed.
Whats the big deal???
It's your HOUSE!! So it cost 500 or 1000 or 1500.00 to get an SCA from someone proffesional enough to have gained the knowledge and willing enough to spend the time to develop a well thought out plan of action.
To anyone boohooing SCA's..........I did once. Still struggling with it.
Last two jobs I looked at, i clearly explained to the potential clients, that I value my time , and as such, they need to be willing to expose their budget, and be willing to pay me to prepare and SCA if there is subsatntial work anticipated.
Delivered in an intelligable and confident fashion, I believe you will win. It just makes too much sense.
The other way simply DOES NOT WORK!!!!! It has been proven more times than not.
What's the big deal???
EricI Love A Hand That Meets My Own,
With A Hold That Causes Some Sensation.
[email protected]
Eric, you just wrote a 1000 word essay. Now, if you could condense that into one sentence and print out the benifit to the homeowner in bold, I will be endeared to you forever.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
I remember you stating once that you were not comfortable speaking or something like that.
What I wrote is just the bullship floating in between my ears.
It's also what I tell my clients.
Blue, you can try to present it any way you like.
I'm NOT a slick talking dude. BUT, I do come off as HUMBLE and HONEST.
You don't need to present EVERYTHING on paper or............
And it's ok to leave a few things open, just encourage them to keep in touch, AND do the same.
Remember what Sonny says; "A free estimate is worth EVERY cent you paid for it, every damn one"
You and I know that a free one is garbage and we know why. Simply xplain why. I did.
If they want something that is actually worth something (like your time and expertise!) they MUST pay for it.
Am I gonna have to come out there and smack you upside the head while Mike Smith holds you down??
I think the key to this thing is practice in a real time situation to see how it goes.
I've gone as far as to play the sympathy chord; "I am at a place in my career where I can no longer afford to give away my valuable time".
People can relate to that, as silly as some may think it sounds.
That''s the thing I suppose, getting them to relate it to something else in their life.
You too can sell SCA's in little or no time at all with the proven tape systm...........blah!!!
Keep at it.
EricI Love A Hand That Meets My Own,
With A Hold That Causes Some Sensation.
[email protected]
Eric, thanks for the lecture, but I don't need any more lectures. All I want is the benefit!
Is there a benefit to the homeowner besides Mike's "you get me if you pay me for a proposal!"?
Notice, that I've highlighted the benefit in bold.
That's all I want. I want to know what the benefits are. I don't need to know why I should do them. I'm trying to develop a system.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!