Probably the most challenging aspect of the residential contract construction business is your relationship with the customer.
It would be nice if you could just do the work and get paid without having to spend so much time talking about it (and constantly having to re-negotiate the contract).
But since there would be no construction business without customers, it’s best to figure out a way to get along and make things work as smoothly as possible. So to do that, let’s look at things from your customer’s point of view.
When you do a remodel, you go in and tear up the customer’s home, and turn their life upside down for months on end. With a new construction, you’re taking responsibility for the investment of the bulk of the customer’s life savings. In either case, once the project starts, the customer feels extremely vulnerable because they have turned over responsibility for a major part of their world and their life to you, their contractor.
So a construction project is a very emotionally stressful experience for the customer. In order to have it go as smoothly as possible, your customer needs to be able to trust you.
How do you gain your customer’s trust?
Lack of trust is based on fear. And fear is the result of a lack of information; We fear what we don’t know:
- Why didn’t the workers show up today? Is the contractor working on another job now that I’ve paid my last invoice? Are we falling behind schedule? Will this go on forever?
- When is my next payment due? How much will I need in my checking account to cover it?
- Why is this invoice higher than I expected? Are we over budget?
- I had no idea there would be so many purchase decisions! The contractor tells me the project is delayed because I haven’t ordered everything. I don’t remember all of the things I need to select. When does all that stuff need to be ordered? How much can I spend in each item and still be on budget?
- Why did they paint the living room that awful color? I’m going to demand that it be re-painted, and I’m not going to pay for it! I’m sure I didn’t pick that color! Did I?
- How close are we to being on budget? How many change orders have I signed? How much will the total job cost at this point?
- When will the job be finished?
On the other hand, information gives your customer confidence!
- If you give the customer an updated schedule, then they don’t have to worry that the job is going to fall behind when workers don’t show up for a day or two.
- If you give the customer an updated draw schedule, then they know how much each payment will be, and when it is due.
- If you give the customer an allowance schedule, then they know which items they need to select, how much they have to spend on each, and when each item needs to be ordered to be received in time for scheduled installation.
- If you give the customer a “customer selections” document to show exactly which choice they made for everything – color, product specification, material, finish, etc., and you get them to sign it, then there will be no question about who’s to blame when the “wrong” thing gets ordered and installed.
- If you give the customer an allowance variance report that shows exactly how much each of their allowance selections varied from the allowance amount, then they will know why their invoice is different from what they expected.
- If you give the customer a report of all of the change orders they have authorized, and how the change orders affected the job total, then they will know why their invoice is different from what they anticipated.
- If you give the customer a full summary and accounting of the job, updated as often as they like – once a day if necessary, then they will always know where they are relative to their budget.
If you give all of this information to your customer, presented in a professional and easily accessible manner, you will win their trust a million times over.
And you will avoid a million arguments, and save a million headaches.
And you will earn the best recommendations of any contractor in your area.
But how can you do all that? That would require a ton of paper work! You’re already maxed out, and you can’t afford to pay an office worker to sit around and crank out paper all day long just to passify anxious customers.
The answer is SmartContractor.
SmartContractor has been designed to provide all of the information described above – and more, passively, automatically, with no more work than it takes to simply track and account the job; all presented in a neat, concise, and professional manner.
Here’s how it works:
Documentation
It all starts with the job estimate. SmartContractor makes it easy to create an accurate and detailed job estimates, complete with job options, alternatives, and allowance items.
Once you have an estimate, you can easily generate a job proposal or contract to print or email to your customer. SmartContractor generates the job proposal/contract, and all customer documents, by merging data from the job estimate and your customer’s information (name, address, etc.) into a Word compatible, customizable template document.
Once you are awarded the job, SmartContractor will automatically generate a Critical Path Method (CPM) job schedule. All you have to do is enter the job start date, and SmartContractor lays out the schedule based on predefined (or user definable) schedule models (work sequence dependencies).
Once you have a job schedule, SmartContractor will automatically generate a draw schedule, and an allowance schedule. The draw schedule shows how much each payment is expected to be, and when it is expected due. The allowance schedule shows the allowance amount for each allowance item, and when each item must be ordered (including lead time) to be received in time for scheduled installation.
Once work starts, and the customer starts changing things (which they always do), then all you need to do is create a change order for each change and get the customer to sign it. All you do to create a change order is enter what the item has been changed to (including cost and schedule time), and SmartContractor will automatically re-calculate the job total and the schedule.
As materials are purchased, all you have to do is select the item from the estimate and enter the actual count and unit cost of each purchase. And, as labor hours are worked, all you have to do is select the work item from the estimate and enter the actual hours worked. SmartContractor does the rest.
Then all you do is generate invoices. To generate an invoice, you just select which items, or what percent of items, to invoice. Invoices can be printed as a standard pre-formatted invoice, or in a customized “draw request” document, or as an industry standard AIA G703/703 payment application (schedule of values) form.
OK, SmartContractor can crank out all of this information automatically. Great. Now how do I get it to the customer? Do I have to print or email all of this?
This brings us to the second part of the magic of managing customer relationships…
Communication
Once you have all of this nice up to date, professionally formatted documentation for your customer, you still have to get it to them somehow. Well, SmartContractor makes that easy too.
SmartContractor can automatically generate and upload a personal webpage for each of your customers, that contains PDF files of all of the information described above. SmartContractor can do this automatically every day when you exit the program, or it can do it as often or as many times a day as you like.
All of the following documents are automatically generated and uploaded to the customer’s website:
- Job Schedule
- Allowance Schedule
- Customer Selections
- Draw Schedule
- Job Proposal/Contract
- Job Options/Alternatives
- Allowance Variances
- Change Orders
- Draw Requests (Invoices)
- Job Site Photos
All documents generated by SmartContractor are formatted with your company logo and letterhead. All documents can be printed, or emailed, or posted to your customer’s personal job information website.
Professionalism
Documentation. Communication. Presentation. Gaining your customer’s trust. These are all part of the same thing: professionalism.
If you want to be a successful construction business, you’ve got to look and act like a professional construction business.
SmartContractor gives you everything you need to overwhelm your customer with confidence and satisfaction. And while saving you time and money at the same time.