Episode 67: Professional Contract Proposals With Russ, Sky And Andy
In episode 67 of the Professional Builders Secrets podcast, we’re joined by Co-founders of the Association of Professional Builders Russ Stephens and Sky Stephens, along with APB’s Head Coach, Andy Skarda. Throughout this episode, the trio go over the significance of professional contract proposals, and how a fixed price contract with a 30-day deadline is key to retaining profitability in the current industry climate.
Episode 67: Professional Contract Proposals With Russ, Sky And Andy
In episode 67 of the Professional Builders Secrets podcast, we’re joined by Co-founders of the Association of Professional Builders Russ Stephens and Sky Stephens, along with APB’s Head Coach, Andy Skarda. Throughout this episode, the trio go over the significance of professional contract proposals, and how a fixed price contract with a 30-day deadline is key to retaining profitability in the current industry climate.
Show Notes
Transcript
In episode 67 of the Professional Builders Secrets podcast, we’re joined by Co-founders of the Association of Professional Builders Russ Stephens and Sky Stephens, along with APB’s Head Coach, Andy Skarda. Throughout this episode, the trio go over the significance of professional contract proposals, and how a fixed price contract with a 30-day deadline is key to retaining profitability in the current industry climate.
Inside episode 67 you will discover
- Why it is so crucial to have strong contract proposals
- The problems with an unclear contract proposal
- The key elements of a good contract proposal
- Considerations to keep in mind and common blind spots
- Examples of success using a professional contract proposal
- And much, much more.
Listen to the full episode to uncover a step-by-step guide to building a foolproof professional contract proposal to maximise your profit margin and set your building company up for success.
Russ Stephens - Co-founder
Russ Stephens is a Co-founder of the Association of Professional Builders, a business coaching company dedicated to improving the residential construction industry for both builders and consumers. Russ is a data analysis expert who has introduced data-driven decision making to the residential construction industry. Russ is also a proud member of the Forbes Business Development Council.
Sky Stephens - Co-founder
Sky Stephens is a Co-founder of the Association of Professional Builders, a business coaching company dedicated to improving the residential construction industry for both builders and consumers. Sky is a proud member of The National Association of Women in Construction and she was also recognised as one of 2021’s Top 100 Women.
Andy Skarda - Head Coach
Andy Skarda has owned and led businesses in South Africa, the United States, South-East Asia, and for the last decade, Australia. With 30+ years of business experience, Andy heads up the coaching team at the Association of Professional Builders (APB), helping business owners in the building industry identify and implement the skills and systems they need to be successful, without needing to go back to school or more importantly, without going bust.
Timeline
2:50 The importance of strong contract proposals
7:03 Critical elements of a contract proposal
13:56 Where to start
22:03 Common blindspots
29:15 Fixed contracts and a 30-day deadline
Links, Resources & More
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Sky Stephens:
There's a major difference between a contract and a sales proposal.
Russ Stephens:
I think if you are looking to sell something, you really need to keep lawyers and accountants well away.
Andy Skarda:
Every bit of detail that you give around that itemising of everything that is included is an opportunity for an argument or a discussion.
Sky Stephens:
I don't think proposals sell contracts, but they can lose them.
Andy Skarda:
Sales is the transference of confidence.
Bosco Anthony:
Hello, and welcome to the Professional Builders Secrets podcast, a podcast by the Association of Professional Builders (APB) for building company owners, general managers, VPs and emerging leaders. Here, we discuss all things running a professional building company, from sales processes to financials, operations and marketing. It's time for another exciting episode from the Professional Builders Secrets podcast. Joining us today are Sky Stephens, Co-founder of APB. Sky, lovely to have you as always.
Sky Stephens:
Thank you. Thank you for having me, Bosco.
Bosco Anthony:
Russ, Co-founder of APB as well. Great having you, Russ.
Russ Stephens:
Hey, Bosco. How are you going today?
Bosco Anthony:
Doing well, my friend. Doing well. And Andy Skarda, Head Coach at APB. How are you doing?
Andy Skarda:
I'm rocking and rolling, thank you, Bosco. How are you doing?
Bosco Anthony:
I can't complain. Well, I'm really excited about our topic today, and I'm going to get right into it. Do builders struggle with building professional contract proposals?
Russ Stephens:
I think it's fair to say that some do, and I think it all stems from having preconceived ideas about what a contract proposal is. Now, some guys believe it's all about itemising everything that's included in a project, along with a corresponding price, and then others believe it's a one or two-page estimate. In all honesty, neither of those is likely to land a builder with too many contracts at a decent margin, if any at all. To answer your question, I think the reason they struggle is because they've never been shown what needs to be included in a professional contract proposal, or what it even looks like.
Bosco Anthony:
Okay. Why is it so crucial to have that strong contract proposal?
Sky Stephens:
It’s important to understand that there's a major difference between a contract and a sales proposal. Often we use the two words together: contract proposal. It's so important to have a strong proposal because you are still selling, all the way right up until the very end. It's a formality at the point you're presenting the finalised contract proposal, but you are still selling right up until the end. So you're not going to bamboozle your clients with a really long legal document.
Sky Stephens:
You are giving them a proposal of this contract. This is a very succinct, summarised version of the legal building contract that you're going to have to draw up. But it's bringing together all the core pieces of information that they need to know in order to make a decision. So like I said, it's not necessarily short. It's not a two-page estimate. They're still a decent size in length, but they're not hundreds of pages like a legal document.
Bosco Anthony:
What could possibly go wrong with an unclear contract proposal? Where does it turn into a nightmare?
Andy Skarda:
Aren't you supposed to say, “What could possibly go wrong, go wrong, go wrong, go wrong?” Isn't that the way the question should be asked? Bosco, how long is a piece of string? There are two extremes that we've spoken about here: on one side, you don't have enough information, on the other side, you have too much. So maybe what we need to do is to say, “Why are we even doing a proposal?” Sky's touched on it. It is effectively the last piece in your sales process. It is the document that is presented to the client that is effectively the summary of everything that's been agreed and discussed over your entire sales process. You are confirming that both parties are ready to move ahead on that basis.
Andy Skarda:
It certainly forms the summary, as Sky said, but I also think the basis of the agreement between the builder and his client. And that has to be absolutely clear. Both parties need to clearly understand what is expected of them and what they get in return. I always talk about the fact you're not selling widgets. You're going to be in a relationship with this client for potentially longer than a Kardashian marriage, so you’d better make sure that everybody knows what's going to happen in that period of time.
Bosco Anthony:
Do you have any examples where something has gone wrong? Have you ever had to coach a client to potentially revisit or look at their proposals differently, Andy?
Andy Skarda:
The thing that goes wrong is you don't make the sale. That is essentially the ‘goes wrong’ of this document. Remember, as Sky said, we're differentiating between the legal contract and the contract proposal. In the proposal document, essentially, this is the final offering that gets a client to move ahead or not. I guess, in simple terms then, what could go wrong? The client decides to not go ahead with you. That's the biggest danger that you face if you don't hit the balance that we've spoken about already.
Bosco Anthony:
This is a sales document in many ways. I'm just wondering if working with a lawyer can really help the builders in the sales process when they're building the proposal. Or does it actually deter them from getting the sale?
Russ Stephens:
I think if you are looking to sell something, which you are with a contract proposal, then you really need to keep lawyers and accountants well away. Because seriously, an accountant couldn't sell a box of matches, and a lawyer would simply advise everyone else to get more lawyers involved before signing anything at all. So, no.
Russ Stephens:
Those guys are extremely smart and extremely useful, but just keep them at arm's length a little bit longer until you get the actual contract here, until you've got people verbally over the line. Then you can put the clauses in there, which we know these guys love to use to protect us, really.
Bosco Anthony:
Somewhere out there, Russ, there's a statue of you in an accountant's office. I'm just saying.
Russ Stephens:
Hand in hand.
Bosco Anthony:
Hand in hand. Well, okay. What are some of the critical elements that your contract proposal should have?
Sky Stephens:
There are so many things that it does need to include, but the most obvious, the most important thing is going to be the price. The most important thing about the price in your contract proposal is that it's a price everyone knew was going to be there. By the time you get to presenting this proposal, the price is not going to be a surprise, so you're not burying it in the last page of the proposal. It's going to be upfront and obvious because you've been discussing the price the entire time. This is a proposal of works. This is everything that's included, and so obviously there are quite a few things to include.
Sky Stephens:
Sky Stephens:
Your contract proposals are very professional documents as well; they're very styled. They're very beautiful. They're like your brochures. You get a graphic designer to put them together. You’ve got a lot of information, but you are presenting them in a very beautiful way. Your contract proposals need to be just as beautiful. Stop with the white paper, just words on it looking like a contract, because that is boring. You are still selling, so put in a bit of effort. But because you've got so much information in them, you've got to organise it somehow.
Sky Stephens:
We seriously recommend actually having a table of contents, because you want people to be able to go back through this proposal and find what they're looking for. Down this table of contents, you're going to find a whole heap of information. Of course, you're going to need to have an introduction. Actually have a page that explains how you got here, why you are here, what your potential clients are looking for, what it is you do and that you're very excited to have been working with them over the last eight months on this design and you've put together in the proceeding pages the full proposal of what's included. Have an introduction from yourself.
Sky Stephens:
Then you’ve got to make sure you do have the price and the scope of works. This is super important. This is the real meat. This is what people are going to pore over the most. And then of course, you've got other elements that are just going to help you sales-wise. You need proof in there. You're going to need some testimonials. You're going to need a case study. You're going to need borrowed authority. What awards have you won? What are your licensing details? All the things like that. You do want to have a few really important things like a schedule of payments. Make it really clear.
Sky Stephens:
Andy mentioned this before as well: responsibilities. What are you responsible for as the building company? But also, what are they responsible for? These are only a couple of bullet points. It's one page of responsibilities really, but it keeps the clarity there. It's still a sales document, but you are being so crystal clear about everything. It's answering all of their questions. It's almost like you're trying to go through every single one of their objections for not having clarity and why they wouldn't move forward. Put it all in this document and then you step them through it.
Sky Stephens:
That’s a really good point, actually, let's zero in on this bit for a second. When we talk about price and scope of works, Russ just alluded to this, it is not every little thing itemised with pricing next to it. It's not the point. When you go through a scope of works, and what we teach our builders to do is, when you've got the price, you've got a scope of work. So you are including detail about what is included. But there is a limit and there is a point, and you are not itemising every point with every price. “Here's what's included. Here's what you have chosen here. Here are all your selections. Blah, blah, blah.”
Russ Stephens:
It's not a bill of quantities. Yeah.
Sky Stephens:
Absolutely. It's not that. You're going to list everything. You're going have your price at the bottom, but here's the kicker, here's what you should do. It's like buying a car. Here's the base model, or here's certainly the model that we've specked up. Here's what you want, and this is the final price. But right below it, additional extras. Do you want the blackout pack? Here's the price for that. Do you want a swimming pool? Here's the price for that. Maybe these were things that were discussed, not committed to, and so you can tick those boxes and add them on. But this was the price for everything that is approved up until this point. That is so important.
Russ Stephens:
Yeah. That's a great opportunity as well to go in the direction that suits the prospect, because you're going to get certain prospects who are building their ideal home, their dream home. Budget isn't an issue for those guys, so they want to be made aware of what they can upgrade to. But for someone building their first home where budget is a major constraint, you've got to give those guys options to actually downgrade, to pull the budget back. You can use this strategy in two very different directions.
Sky Stephens:
But you've got your main price. You've got the price and you’ve only got these optional extras to remove at the bottom. This is the biggest mistake we see builders make, when they itemise everything. They list the price next to everything, and that's when consumers get really picky.
Russ Stephens:
That price as well, that should be the figure they are expecting. This shouldn't be a shock to anyone. That price that lands on that proposal is the one you've been working towards. You've kept them in the loop. That is the figure you've been talking about.
Andy Skarda:
Just to jump in on the back of what Sky was saying, every bit of detail that you give around that itemising of everything that is included is an opportunity for an argument or a discussion.
Sky Stephens:
Or to be cheap, to change.
Andy Skarda:
Exactly. Yeah.
Sky Stephens:
“Can my brother do this instead?”
Andy Skarda:
“My uncle's a painter.” No. What you want to do is make sure that the things that are big items, emotionally driven things in the build, absolutely, make sure that they see those are there. But don't open yourself up to the kind of headache that itemising everything will bring you.
Bosco Anthony:
Now, should there also be some technology with the proposals? Because I was just thinking about this recently. I got a quote, but I had to scan and sign it and send it back. And I said, "What if I didn't have a scanner? What if I didn't have a printer?" Should there be some form of digital experience as we're going through this as well?
Andy Skarda:
That depends on the client more than anything else. You'll have worked with them over a series of months to get to this point. Go with what the two of you have been doing successfully up until now.
Russ Stephens:
The important thing to remember here as well is that this is a contract proposal. They're not actually going to be signing the contract, so there's really no need. What we are looking for is an agreement to then get a building contract created, and that's the exciting part because that's when we get the lawyers involved.
Bosco Anthony:
All right. Well, take me through the process then of what goes into building this particular contract proposal. If a builder comes to you and says, "I need help," where do they start?
Andy Skarda:
Well, obviously, we want them to stick to the minimum that needs to be in there, so essentially the structure of the document. And because we are always about systemising and making things run more easily, we want to make sure that they create a template of the document that is as all-encompassing as possible in its templated form, and therefore they're not going to forget to put things in there. If they decide at some point relative to certain clients, not every section is needed, it's far easier to take things out than to remember to put them in. Obviously, once you've got your structure laid out in terms of what it's going to include, you're then going to literally have to populate each of those sections that Sky talked about in the table of contents.
Andy Skarda:
You're going to need to put the content in, and as we said, and we've already covered really what goes in there. Then remember that this is a proposal; it's a presentation. Zhooshing it up – and if there’s anybody who would like to leave a comment on the website on how to spell the word zhoosh, it's something we debate often – but you want it to present professionally and to bring some interest into it. So the graphics, the images, the logos, those kinds of things obviously are important. That's putting the template together. Once the template is together, then obviously what you're going to do is, per client and per situation, you are going to customise that template to that client's actual proposal and circumstances.
Andy Skarda:
Obviously, the trick, as with all of these things is it's never a completed work of art. That's probably pushing it a little bit, but you are always needing to be going back, reviewing it, updating it. We've bounced around the legal implications of a contract. If those things are changing, you need to make sure that the proposal is reflecting as much of those changes as is needed for the client to be happy to move forward. So it's an ongoing optimisation process.
Bosco Anthony:
Are there any considerations that builders should keep at the forefront when it comes to building these professional contract proposals?
Russ Stephens:
It's important to remember that obviously, these contract proposals are unique because they're unique to the home that's being designed. But they're also unique to the client themselves as well. Now, at this point, you may have been working with this particular prospect for six to even 12 months, or maybe a bit longer in some instances with the larger projects. So you've got a lot of information, a lot of data. One of the early things that we always try to get our members to extract and identify is that people will build a home based on one of three priorities, and they are budget, speed and quality.
Russ Stephens:
There's always one of those that is the major driver and then they might have a secondary driver as well, but it's never all three. It can't be all three. Certainly, if you ask the client what's the most important, they'd say, "I want all three." But your job as the builder is to identify the primary driver. As we mentioned earlier, for first-home buyers, budget is going to be a prime consideration because they cannot go over their budget. You've got to make sure that you keep them informed of the budget, and make sure that this proposal comes in under the budget.
Russ Stephens:
If it's all about speed because the relatives are coming to stay for Christmas, then you've got to demonstrate in your contract proposal how you are going to deliver that home on time. Because if you're going up against another builder, that is what will win the project. You might want to include a job schedule, and I highly recommend that you do include a job schedule, regardless. But certainly where speed is a primary concern, they've got a deadline, then that you cannot do without it.
Russ Stephens:
In terms of quality, well, you would probably already be dealing with this particular client through your online portal because communication is really important to these guys who are building their dream home. It's quality, but it's generally communication as well. You would probably be using a tool like Buildertrend to manage all your client communication because a quality build takes a lot of different selections. So you'd be documenting those through an online tool like that.
Russ Stephens:
There are a few considerations, but probably one of the main times where we see the opportunity fall over at this late stage is when the proposal is not delivered in person. The builder might, finally, after eight months of work, put this proposal together and they might have the greatest proposal of all, including everything that Sky just mentioned. It answers all the questions because that's what it's got to do. It's got to answer questions when it's sitting there on their coffee table for the next week or so. You've done all that work and then you call up the client and say, "I've got your proposal already, I've got your price," and they say, "Yeah, just send it through. We're busy." It's very hard for them to come back from that position, and you can't allow yourself to get into that position.
Sky Stephens:
I think to challenge that and maybe clarify that, maybe you're not going to lose the opportunity from not delivering the proposal in person, because we've seen in the last few years you can do it online. I think you're going to lose it if you don't present it.
Russ Stephens:
Yeah, that's a really good point. In the modern world, we can deliver it. When I say in person, I'm talking Zoom as well these days, but that's a really important point.
Sky Stephens:
It's a presentation. You've got to deliver it.
Russ Stephens:
You've got to present it.
Sky Stephens:
You need to step them through it. Absolutely. You know how to talk through all these selling points. We had this experience just recently. Gosh, there was a massive proposal that we were getting, I can't say what for, but there was a lot of money there, and it was just emailed through. It was an interesting proposal, I’m not going to lie, but they were asking us for a lot of money. I couldn't help but feel so disappointed that this gorgeous proposal was just emailed through to us and I just skimmed through it. I didn't show it the respect that it needed.
Sky Stephens:
Whereas if they scheduled in a meeting, we couldn't meet in person, but what if they just scheduled a Zoom with us to step us through this proposal, and demonstrate so much value in every single one of those sections? Well, it's a completely different story. But they emailed it through to us, so it was very disappointing.
Russ Stephens:
Well, that's a double failure, isn't it? Because they didn't even try to present it to you. They just took the easy option. But what we see with a lot of builders is they’ve presented it in the wrong way first of all by saying, “I’ve got it ready.” And then when the prospect says, “Just send it through,” it’s very hard to come back from that.
Russ Stephens:
A better way to approach something like that would be to say something like, “Hey, we’re almost finished with your proposal, but I do have a couple of things I just need to go over with you both. So would you be free to meet on so-and-so?” Bang, you’ve got your date locked in. You can go and present your proposal. But you can’t allow the prospect to take the initiative, actually cheat you out of your moment in the sunshine.
Bosco Anthony:
Basically, what you’re saying is that there’s really an importance of following up from a sales perspective, to follow up on what you’re offering and then trying to have some human connection while you’re presenting it, to also try to build some assurance?
Russ Stephens:
It’s the final delivery. You haven’t even got to the following up point at this point. But you do raise a very good point there in terms of follow up, because you’ve got to get to this final delivery. Your job isn’t done as a salesperson just by sending through the price, but you are probably not going to make the sale there and then. A certain percentage will, because you've built up so much trust. "Yep. Let's do it. Let's get this contract written up." But most people will have an objection or two, the classic, "We want to think about it." So you will have to follow up as well. And don't be afraid to follow up because we all know the stats on that.
Bosco Anthony:
Okay. What are some of the most common blind spots that builders tend to overlook when it comes to this process, outside of following up?
Sky Stephens:
Well, when it comes to proposals, stick with me here, I don't think proposals sell contracts. But they can lose them.
Bosco Anthony:
Interesting.
Sky Stephens:
A bad contract proposal can lose the sale, but a good contract proposal shouldn't be what makes them decide to go with you. It certainly shouldn't because you should be the only builder in the running. They're not comparing your proposal to someone, so that's not what's going to cinch the deal. You've been working with them for probably six, eight, 12 months up until this point. As Ross said, this is the final delivery. So this isn't the only thing that should be selling them. They do not close the sale. It's the presentation of the proposal. It's all of the work up until this point. This contract proposal is the formality to get them to agree to get a contract written up.
Sky Stephens:
You can lose the sale from a bad contract proposal. Imagine working with someone for six, eight or 12 months. You've done full concept designs. You've moved forward into a preliminary building agreement. You're doing everything. You've done all of their selections, decisions and engineering, literally everything. Part of that prelim process was a fixed price contract proposal preparation. So this is your moment. You are delivering your proposal. If you do a bad job, if it's two pages, if you don't present it, if you just email it through, like Russ said, if you don't have adequate proof, if you can't demonstrate competence in this proposal, you can lose the deal because of it.
Sky Stephens:
I think that's really misunderstood. They're not going to win you the contracts because honestly, they shouldn't. You really should have done a lot more work. It shouldn't be all on it, but you can certainly drop the ball with a bad proposal.
Bosco Anthony:
Now, when we look at where we're going and what's coming up in the market and where things are right now, what should builders prepare for when it comes to building a foolproof professional contract proposal?
Andy Skarda:
To start with, every single builder needs to go out and buy a crystal ball. That's a stupid joke. Your question is valid from this perspective. Russ and I often reflect on the world three years ago, and then all of a sudden it changed. We could never have predicted what was going to happen in the January of 2019 and that eventually transpired through March, April, et cetera. The reality in terms of preparation, that's why I said to you earlier, when you're putting the template together, make it as comprehensive as possible, but you've got to constantly be thinking about the circumstances that are going on now.
Andy Skarda:
What impact does that have on your proposal? If inflation is a big talking point, if recession is a big talking point, whether or not you put that into the proposal depends on how serious it is. But you'd certainly want to put it into your presentation, or maybe as Sky spoke about, in the introduction. In other words, setting people up, and Sky touched on this and I think I'm just going to highlight it a little bit. We always talk about when it comes to objections, try not to have them. One of the ways that you can have or avoid an objection is to make sure that it's already covered before the question even needs to be asked.
Andy Skarda:
Really, as I said earlier, it's an ongoing optimisation process. You've got to be reviewing it. You've got to be taking the current economic circumstances, the local economic circumstances and this client's particular situation into account, and then making sure that every single proposal is presenting the most up-to-date information that you possibly can. If you're asking me to tell you what's going to happen in 2023, I'm afraid my crystal ball is actually in for servicing at the moment, so I can't do that for you. Well, not today, anyway. I'll tell you in December.
Russ Stephens:
It's in the State of the Residential Construction Industry.
Andy Skarda:
Oh, there we go.
Russ Stephens:
The whole year is predicted.
Andy Skarda:
Oh, I missed that one. Good pick up, Russ.
Sky Stephens:
I think just going back to what you were saying though, Andy, I just want to highlight this point for everyone because you said it quite quickly, but you are answering questions before they're asked. But the main question you are trying to answer in the proposal – which will change, it's seasonal, it depends on the quarter, it depends on what's happening in the economy, whatever – you are trying to answer the question, why now? Why do they need to get started right now?
Andy Skarda:
Excellent point.
Sky Stephens:
And that needs you to be leaning into two key things: where's the urgency, and where's the scarcity? That's what you’ve got to make sure you have in your proposals.
Russ Stephens:
Which is why you have construction slots.
Bosco Anthony:
What are other factors that could impact a professional contract proposal, or even impact how it's received, I guess?
Russ Stephens:
Well, I think it's important to remember that there is no such thing as a done deal. So no matter how confident you are about a particular prospect, even when you're coming to these final stages, there is no such thing as a done deal. It can fall over for any number of reasons, some out of your control. There are others; like Sky mentioned, a bad proposal can lose a deal. That's simply because of our reptilian brains looking to protect us and searching for ways to actually not proceed with something, anything at all. Whether it's a bit of exercise or making one of the biggest investments of our lives, that voice inside our head is always trying to stop us from moving forward.
Russ Stephens:
You have to be aware of that, and you can't take anything for granted, which is why even when you deliver this contract proposal in person, or in person in Zoom, you can't take it for granted. You’ve got to build that rapport. It’s the same with any meeting, any phone call. Just allocate those first few minutes, it could be eight minutes, whatever, as long as it needs to be, build rapport. Get everyone comfortable and onside before you start.
Russ Stephens:
Another thing that I think is really important, especially in this day and age, it always has been important, but now more than ever, is that this is a fixed-price contract. If you are delivering a cost-plus contract, then you're leaving money on the table. This should be a fixed price contract, in which case it has a very clear deadline, which in the current climate is no more than 30 days. And after 30 days, you reprice that proposal. Regardless, it will have gone up in some areas. It has to go up. You cannot leave a price on the table for longer than 30 days. So combined with your construction slots, there's another urgency factor there.
Bosco Anthony:
You've talked about the fixed pricing and it shouldn't go longer than 30 days. I'm assuming you're referring to a lot of builders who haven't done this and got into a lot of financial difficulty because of that. Is that correct?
Russ Stephens:
Oh, absolutely. We saw proposals left on the table for far too long, even when it became quite clear that prices were rising. But I think maybe a more extreme example of what's gone wrong in the last couple of years is the proposal was delivered, the contract was signed, but the contract wasn't able to start, in a lot of cases, for circumstances well beyond the builder's control. They still honoured those prices that were agreed to, which they should really not have done. That was the point at which they should have renegotiated with the client.
Russ Stephens:
The contract hadn't started. They were perfectly entitled to renegotiate. As part of that, if the client didn't want to proceed, they simply handed back the deposit. It would've been a little bit disappointing, but much better than proceeding with a loss-making contract. But unfortunately, in a lot of instances, especially in the larger building companies, that didn't happen, which is why so many large building companies lost so much money over the past 18 months.
Bosco Anthony:
Can you share a story from your builders who have seen success utilising a professional contract proposal, and where did you see the success?
Sky Stephens:
T I'm not sure if one story in particular stands out to me, but I'm getting a few just from the points that we've spoken about right now. From even just bringing up, "Look, we don't think that a contract proposal is going to win you a contract, but it can certainly lose you one." Definitely when newer builders come on board as members, a lot of them get success.
Sky Stephens:
As a member of ABP, you actually get our proposal template and a full example so you can see what it would be like if you were to present it. It depends how systemised your building company is to begin with, but if you are relatively new and you don't have a template or a proposal like this, you can start implementing our proposal template, the structure, the order, the detail, everything. I can think of a lot of stories, a lot of posts in our members group of builders really just saying, "Wow, here's a message from my clients who were amazed and blown away by the level of detail we were able to provide in a proposal."
Sky Stephens:
That's on one end of the spectrum, but maybe it's comparing to very early on in their journey. And maybe they actually were getting compared to other builders and that's why it was a massive win. But on the other end of the spectrum, I can certainly recount many stories in the last few years of a lot of builders being even quite surprised and very happy because they moved their entire proposal presenting process from in-person to online. Quite frankly, they had to, but they didn’t see a single difference in conversions.
Sky Stephens:
They’ve realised from the structure they had, the template, everything, and they were just able to present it face-to-face online, on something like Zoom. I think that was a major win as well. The system works. The process works. You can deliver it in a different format.
Andy Skarda:
I think just to add to this, more and more, we are starting to talk about the fact that a sale is the transference of confidence. I think that the overriding message I get back from clients is they feel confident presenting a professional proposal. It’s the old story, fake it till you make it. If you’re not really confident, if at least there’s something that makes you feel confident because you’re proud of that document, there’s another little extra thing to help you in that proposal meeting.
Russ Stephens:
You should be excited about the information that you are about to share with these people and the prospect of creating what’s being designed. You shouldn’t be afraid of that at all, or nervous.
Bosco Anthony:
We’ve talked about details. We’ve talked about confidence. We’ve talked about following up. Any final words of wisdom before we get into, perhaps, where we can get some resources to help our listeners out there?
Russ Stephens:
I think you just touched on it there: confidence. Confidence sells. There’s absolutely no doubt. If there’s any hesitancy at all in your delivery or whenever you are speaking to a client, that will transfer over to them. Then the reptilian brain kicks in and starts giving them a reason as to why they shouldn’t proceed. I think it’s really important to be confident. I think having a professional contract proposal helps with the confidence because you are just following a process at that point.
Sky Stephens:
Yeah, I agree. Having a template gives you confidence. Building on that template, improving it with every single proposal you create gives you confidence. It’s like structure gives you freedom. Templates and systems give you confidence. I love it.
Bosco Anthony:
Excellent. For our listeners out there, what kind of sales resources can they access from APB, and where can they get these resources?
Andy Skarda:
Bosco, I’m so, so glad you asked this question. I’ve been just dying to share this: #joinAPB. Look, as usual with these kinds of things, we do have some free resources. Our mission statement is to improve the industry for builders and consumers, so there's a bunch of free stuff available on our website. But the truth is, as a member, this is the end of the sales journey. We have all of the training, all of the templates to literally walk a client through from that first meeting all the way to this point.
Andy Skarda:
What our members get is the actual template. The actual document structure is done for them. Essentially, all you've got to do is drop the information into your template and you're good to go as far as this particular thing is concerned, which is probably a good way to wrap up this discussion.
Andy Skarda:
We've spoken about the fact that by the time you get to present this proposal, you've spent six, seven, eight, maybe nine months with these people. That proposal document is largely a summary of everything that has been agreed to already through the process. Every one of our sales resources is designed to help builders get those micro commitments across those nine months, so that when you actually present this final document, you don't need to be nervous or worried, because it's really just summarising what has already been agreed.
Bosco Anthony:
Excellent. Well, Russ, Sky and Andy, I want to thank you for your time and energy as well. It was another great conversation. I look forward to having you back again.
Andy Skarda:
Thanks, Bosco.
Russ Stephens:
Thank you, Bosco.
Sky Stephens:
Thanks, Bosco.
Bosco Anthony:
Thank you for listening. Remember to subscribe to Professional Builders Secrets on your favourite podcast platform and leave a review. To learn more about how the systems at APB can help you grow your building company, visit associationofprofessionalbuilders.com. See you next time.