How soon do you tell the potential client what the payment\draw schedule will be? Do you tell them at the time of the estimate or wait until they accept and then tell them?
my thought is ,it should be in writing in the contract/estimate.
otherwise ,i sign the deal,then you tell me,were off on the wrong foot before day 1.
the older i get ,
the more people tick me off
it's part of the proposal
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
We did the best we could...
Like the others said...it's part of the proposal. In fact, it's a very important part of the presentation. It's the last item in the presentation, just before the trial close.
Is anybody out there?
I put that in my actual bid (not the estimate) which they have to sign and date. I also include a deposit which must be paid before any work begins.
Speaking of bid and estimates.
What exactly is the difference? Do you give an estimate one day and then come back another day and give a bid?
I use the two terms interchangeably. They both mean the same thing to me. I'll toss in another word "proposal". Is that different too?
The difference between an estimate and a bid is that an estimate is an approximation of what the final price will be and a bid is exactly what the price will be.
I have two projects that I am currently working on now, one with a bid price and one with an estimate.
The bid involves bank financing and they require a fixed price even though many of the details of the final product are undecided. I simply made sure that there was more than enough money in the bid to cover all the eventualities. Since it was a new house and a good site, I will do well.
The estimate involves a complete renovation of a 110 year old summer lake house. At the time of the contract there were no plans and only a three page written description of what the owners wanted. They needed to have a commitment of our time and we needed to do drainage and site work before winter sets in. I gave them an estimate of the work and am obligated to update that estimate as details (and even larger than details) become known. In addition this renovation will have the usual surprises of a 100+ yr old house. What is important about the estimate is that it is not too far off the final price. Our dirt and concrete work are on target so far but the architect is moving more walls than I had expected.
Obviously a bid is a lot less potential trouble for me, but sometimes there just is no other way to proceed on an interesting and timely project.
In my little world... an estimate is just that... an ESTIMATE of what the final cost will be, given a set of circumstances, assumptions, caveats, etc. It is not a commitment to do a job for a stipulated sum.
A bid is a commitment to do a job for a stipulated sum. There are always conditions, assumptions, caveats, etc., for instance one condition is that the owner sign my contract. Assumptions may be things like we don't find asbestos in the walls or three layers of rotten roof decking under 4 layers of old shingles.
A proposal may reference a proposal or a bid. For instance I may send you a proposal that we do a certain job based on an estimate, or I may propose that we do it based on a bid.
The three terms are not at all interchangeable. I am very clear with potential customers about what I am giving them, and increasingly I give estimates rather than bids, mostly because every job I do now seems to involve plans and specs that change daily, new products I've never seen before, massive scope creep, and the like.
Make sure when you give an estimate the customer understands. Usually in renovation work I give estimates. The scope of work usually evolves as the job goes on and many seem to upgrade the quality/expense of materials after we start.
Quite often I give a ballpark. could be 10 - 15 thousand depending on choices. Then tell them some of the things that will change the price up or down.
Just finishing a renovation that jumped about $10,000 dollars because of decisions they made. If i would of bid it then would have had to have done change orders.
Most of my jobs would turn into change order hell if they were fixed price. It's not a good use of my time. We work, you pay.
I've used all three, but haven't used proposal since my engineering days.
In my world, an estimate is an approximate cost I give a prospective customer after a fairly short discussion of their needs/wants. It's only purpose is to test the water and see if they have the budget to move forward. I see no point in investing a lot of time (mine or theirs) in something that can't happen. That isn't as harsh as it may sound. On a few occasions, I've had to wish them well and walk away - only to have them call me later (a few weeks or months) and ask for another meeting. Those almost alwsys turn into paying jobs. - lol
If, however, they're still standing after I toss out my estimate, we proceed with a very detailed discussion(s) to flesh out the job so I can write a real bid (or proposal, if you wish). The bid details what will be done, who will do it, when it will be done, and how it gets paid for (deposits, draws, hold backs, etc). They have to sign and date the bid and pay the deposit before anything starts.
So, when the proposal is signed....we have a contract!?
And...is a ballpark the same as an estimate? Is an estimate written? Does an estimate automatically turn into a proposal if it's written?
I think that you're overthinking this thing. - lol
A "contract" requires both an offer and acceptance of the offer. The offer and acceptance can be written or verbal, but written is obviously better.
I make it very clear to my customers that my "estimates" are nothing more than my best guess of the cost, time, etc to do their job. The estimate only provides a basis for developing a bid (an offer), but isn't an offer and therefore it cannot be "accepted".
You can certainly enter into a "contract" based on little more than "Your job will probably cost around $X" and a handshake, but (IMHO) only a fool would do that for any job over a couple of hundred dollars.
I don't think I'm overthinking it. I'm just trying to see if we are all using the same nomenclature.
Now...the real challenge is to make sure that the homeowners are using the same nomenclature!
It isn't really important that "we" all use the same nomenclature. The important thing is that you're clear about what you mean, are consistent with your use of the terminology, and (most importantly) clear enough with your customers so that confusion and misunderstanding are minimal.
The name of the game is good communication before you enter into a "contract" (acceptance of your offer). Whether you call it an estimate, bid, or proposal, your goal is to avoid the situation where the customer says "But, I thought you meant...........", and you say "No, I said..........".
FineHomebuilding.com and GreenBuildingAdvisor.com are part ofthe Taunton Home and Garden Network
Taunton Home |
Books & Videos |
Contact Us |
Product recall information
Copyright Notice |
Taunton Guarantee |
User Agreement |
About Us |
Work for Us |
Contact Us |
Press Room | Customer Service
| Subscriber Alert
© 2014 The Taunton Press, Inc., Part of Tauntonâ€™s Menâ€™s Network. All rights reserved.