Construction Business Environment 295
- Since many of the clients will be property owners, developers/investors, and lenders (e.g.,
banks, lending institutions), it would be prudent to make a list from the Yellow Pages, inter-
net, and research in the public library.
12.8 BIDS, CONTRACTS, AND PAYMENTS.
Construction jobs are usually awarded on the basis of a bid or by negotiation. The contractor will es-
sentially estimate the cost to execute the project and then add a certain percentage for profit and con-
tingencies. But in the final analysis, your rates should be set by the logic of most businesses—i.e., it
should reflect what the market will bear.
In any case, ensure that you read the contract thoroughly. Many contractors and subcontractors
often sign prepared contracts without adequately reading them or having an attorney review them.
Many contractors are uncomfortable in dealing with the paperwork associated with the job. But, un-
fortunately, contracting is about contracts, and contracts include paperwork! As much as 50 percent
of all profits made or lost on construction projects can be a result of managing the contract properly.
Assembling all the required documentation, change-order requests, notices, and information re-
quired by your contract may seem overwhelming. But once you get in the habit of following the con-
tract, it will become a normal part of your construction methodology. In order to receive all you de-
serve while building a project for your customer, you must be timely in your requests. Missing the
notice time requirements may result in a loss of your right to collect for items out of your scope of work
or control. It would be wise to take a little extra time to be complete in your description of the event.
Issues in question should be supported by photographs when necessary.
By not documenting conflicts or changes in a timely and complete manner, contractors inadver-
tently shift more responsibility onto their own shoulders, which may cost them their right to collect.
It is customary to visit the site beforehand (at no cost to the client) to obtain the information
needed for preparing and submitting an estimate. This in turn helps to avoid surprises down the road,
since the client already knows what to expect up front. When additional work is required, a separate
invoice should be presented (Figure 12.2). Do not hesitate to get rates from other builders and com-
pare them with your own, bearing in mind the supply and demand in your area.
12.9 THE INTERNET, THE WEBSITE, AND FORMING AN ENTITY
The Internet has created enormous opportunities to reach previously unimaginable numbers of peo-
ple. In addition to making communication possible to more people than through print advertising and
other media, it also makes it available to people who might not otherwise have access. A website for
a small business or any size company, has become a high priority; not only is it a great marketing
tool, but it allows you to develop your services and launch multiple marketing campaigns in a short
period of time. Consider your website a platform to feature your services to your customers and the
world.
But using the Internet is more than just creating a website and waiting for potential clients to find
it. The website should be only one part of an overall Internet marketing strategy. And even before set-
ting up a website, it is imperative to have email service in place.