But this experience wasn’t a total loss. I learned some important lessons that are part of my Rules & Standards of Bidding:
- Never price a project until the plans and specs are 100 percent completed. Ballparking prices leads to misunderstandings and unknowns. This also enforces my policy of never doing cost-plus projects. I can always estimate a project to generate a fixed-price contract when the plans are 90 percent to 100 percent complete and use calculated allowances (never more than five) to fully define any open issues or decisions.
- Always get a retainer, applicable to the eventual construction contract, prior to offering an estimate. If a request for several thousand dollars chases away a client, so be it. I want buyers seeking professional services.
- Before committing to any work, ask potential clients some leading questions to ascertain whether or not they and/or their project are a good match for my company. Find out if they’ve built before and how it went. Ask what issues came up during construction and how they were resolved. Determine what services they are looking for. And get them to prioritize their objectives in hiring a contractor: cost vs. time of completion vs. quality of the finished project.
- Never let ego, money, or outsiders influence my decision to take on a project.
- Never have more than three major projects under construction at any one time. This has continually generated a backlog of projects and clients for my services. I have found that it also filters out clients who are shopping and projects that are priced today and begin tomorrow. It also gives me adequate time to answer and resolve all open-ended issues before the project begins.
There is probably no word in the English language that is more frustrating to a builder than the word bid. I’ve learned that the only way to overcome this frustration is to create your own definition.
Dennis A. Dixon is an author, contractor, and speaker with 21 years experience in the building industry. You can e-mail him at dixven@aol.com.
