Proposals in residential construction

Glossary

What is a proposal?

In business, a proposal is a document written by a seller to a prospective buyer that discusses the various goods and services a seller is able to offer. A proposal is meant to help a buyer assess the capabilities of different sellers in an effort to decide who to buy from.

In residential construction, a proposal is a document written by a builder or remodeler that communicates relevant details of a client’s project, such as scope and price, plus any additional terms and conditions. When a homeowner wants to explore a project, they usually meet with a number of builders to see where they will get the best deal on their build. Throughout this pre-construction process, builders + remodelers create proposals for prospective clients to showcase the value of their offerings plus lay out a quote for the cost of the project.

Why are proposals important in residential construction?

Without proposals, construction projects would be painful for homeowners and building firms. Proposals allow homeowners to review various builders + remodelers to get the best value for their dollar. Homeowners additionally use these documents to gauge the best fit and look for building firms that carefully capture their wishes plus respect their budget. A proposal that fails to speak to the potential client risks the sale of the project and the potential associated revenue. As a governing document for the project, proposals that fail to clearly outline project logistics such as payments, changes to work, liens, materials, and building standards put building firms at risk for reduced margins or worse lawsuits.

For this reason, builders + remodelers need to generate proposals quickly and accurately in order to get the attention of prospects. Without an effective proposal process, building companies will have a difficult time winning more clients and earning revenue. Proposal documents that layout the anticipated scope, price, and optional upgrades plus all the terms and conditions outlining the relationship and responsibilities of the client and building firm increase client confidence, create client advocates, produce a smooth building experience, and mitigate risks to the bottom line.

How do builders + remodelers propose project work to clients?

Since a proposal document communicates critical project information to the client, competitive builders + remodelers try to use a fairly standard, easy-to-understand format. Every proposal should include a detailed outline of the project’s scope, some general information about the builder and the company, relevant legal policies, and, of course, a signature line where a prospect can sign an agreement to continue working with the builder. How do builders + remodelers actually generate proposals? There are many tools and methods building companies use to generate proposals.

1. Manual Methods

At the most basic level, a proposal can simply be a word document outlining a builder’s proposed services for a project. Some builders + remodelers draft proposals using Google Sheets or Excel spreadsheets to write proposals. This way they have digital copies to edit and send to clients. While effective at capturing the necessary details, these more manual methods can take hours to construct. Many require building firms to print them in order for clients to sign, slowing down the process.

2. Apps + Software for writing proposals

Proposals play a key part in every business, so it’s easy to find software tools online to help sellers draft and edit proposals online. Prospero and PandaDoc are two proposal softwares that are used by businesses in a variety of industries. These programs templatize the drafting process and help businesses generate sales quicker with eSignature features. For builders + remodelers who want to speed up their proposal process, these programs can help turn more prospects into projects. Streamlining the proposal construction and signature processes saves time and reduces the risk for error, but these systems sit unconnected to other project details. Document generating platforms exist outside of any tool a building firm may use to put together the project scope and price, risking double-entry mistakes. To account for addendums or changes to the original contract, builders and remodelers waste time hunting down all the required details often housed in other platforms in order to update or amend the proposal.

3. Integrated Construction Management Tools

For builders + remodelers looking for the next step in growing their business, integrated construction management tools like CoConstruct provide the best way to generate proposals and send them to clients. A cloud-based construction management software ensures that a building company with a lot of moving parts can keep things like project financials, scheduling, and budgeting all in one place on the cloud. Building firms can build a full estimate and scope of work in the same system that pushes out proposals to clients. Platforms, like CoConstruct, even integrate financing options right into the proposal generation making it even easier to sell projects and obtain client buy in.




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Megan Sullivan
Megan Sullivan
Marketing

Megan manages the production of engaging, data-driven content that builds connections and helps builders + remodelers move businesses forward.