I'm constantly amazed at the reluctance shown by professional
builders and remodelers to discuss real numbers with their
clients. Hiding or obscuring a project's actual costs in an
attempt to make bids and estimates more acceptable is way too
The reality is that most clients don't understand the concepts
of markup and margin, overhead, and direct job costs. Why would
they? It's our responsibility to teach them these terms, just
as we explain the process and schedule involved in designing
and building their project.
The best policy is to tell the truth. If everyone in our
industry did so, perhaps many of the negative misconceptions
that work against us in the marketplace would finally begin to
Clients will always have questions about our pricing; it's a
natural and practical business concern. But questions aren't
threats or accusations, or even based in suspicion. Homeowners
just want to understand the process and costs.
When clients ask me about my prices, I'm happy to discuss our
pricing structure and how our company's business strategies fit
into the industry nationwide. Typically, it's the overall
concepts that they don't get, but when presented with a
confident explanation of how the business works, they move
This, of course, assumes that you are confident speaking about
the financial concepts, so don't forget to learn them.
I use several sources of information. For instance, I have a
typed sheet (shown at left) that explains our particular
financial formula for the year, including expected job-cost,
overhead, and profit percentages. I've listed the types of
expenses in each category and how they are related to the
I explain to the clients how a strong company culture directly
benefits their project and how training and staff meetings fit
into this picture. By revealing the background structure of our
business in this manner, I let clients see that the overall
formula is arrived at in the same way that all legitimate
businesses set their prices. We calculate the expected expenses
and revenue and then do the math to come up with the necessary
Next I demonstrate how we estimate a project. I show them the
blank Excel spreadsheet we use as the foundation for our
estimates. I describe how the various cells in the spreadsheet
relate to what I previously told them about our financial
Finally, I have a variety of articles and charts copied from
books and magazines that I use to show how our finances relate
to industry averages. The item I use most is a graph showing
high, low, and average gross profit produced by companies at
various volume levels (shown above). Our target of 37.5 percent
happens to be slightly above the average at our volume level on
I have other pages available from professional remodeling books
showing typical markup ranges and how to come up with markup,
as well as copied articles on competitive bidding and other
topics. I don't usually need these other support materials, but
I keep them for those rare clients who want further
If we want to encounter less price resistance from our clients,
then we have to deal with our own resistance first, and make
sure that our numbers accurately reflect the selling price of
the job. Otherwise, we're deceiving ourselves — perhaps
to the extent that we can't afford to remain in business.
This simple chart — which tracks
average gross profits in the building industry — allows
the author's clients to see how his company's finances relate
to industry averages.
Time-worn excuses like "I can't charge that in my market" are
no good. The truth is the best and most solid ground to stand
Knowing your numbers, committing yourself to truthfulness, and
being prepared and confident are the only tools you'll need to
talk about money with your clients.
If we all take this approach, we'll elevate the professional
stature of the entire industry.
Thomas Buckborough owns
Thomas Buckborough & Associates, a design/build remodeling
company in Concord, Mass.
Selling Remodeling Jobsby
Some people have a natural talent for sales. That's great
for them, but most of us aren't quite so lucky — we have
to work at selling.
Like any small contracting company, my remodeling firm needs to
bring in a steady stream of new jobs to stay afloat, and this
depends on my efforts as owner. After reading numerous books
and articles on sales techniques and attending seminars
presented by some of the nation's best salespeople, I've boiled
everything I've learned down to a simple systematic approach
that's improved my chances of closing a sale.
The First Phone Call
Most sales opportunities begin with a phone call to your
office. Any callers interested in your business should be
greeted sincerely and enthusiastically. The goal is to make
them feel as if they are your only clients — but you
should also take this opportunity to learn why they are
considering building or remodeling. Ask them how they learned
about your company, too. The more you know about each of your
prospects, the greater the chances of closing the deal when you
Once you know the general scope of a project, take some time to
set an agenda. Explain to your prospects what is involved with
the sales appointment — approximately how long it will
last and what will take place. For example, you can mention
that you may have product samples to show them. If your meeting
will be at their home, ask if there will be table space
available to spread out papers, do some sketches, and display
Have an Agenda
Typically, I present my agenda like this: "Mr. Smith, when I
arrive I'd like to take a few minutes to tell you about myself
and my company. Then I'd like you and your wife to tell me
about your project and discuss any concerns you have. Next
we'll talk about the major milestones in getting from the
design phase to completion, and then talk a little about
"Finally, I'll explain our warranty and what steps are required
to get your project under way. Does that sound okay to you, Mr.
Make sure to get an affirmation from the prospect. With your
agenda established, you'll have much greater control of the
sales process. Sometimes a client will disagree with your
agenda and want to set his own. When that happens, you might
ask yourself if you want to work with this person; I probably
When it comes time for that first client meeting, mentally
prepare yourself ahead of time. Are you focused? Are you
dressed like a professional?
Jumping in the truck at the end of the day and rushing to a
potential client's home covered in sawdust may not send the
right message. You need all of your attention devoted to this
sales call, so do what you can to rid your mind of distractions
— and definitely turn off the cellphone or pager.
Also, make sure you've prepared your materials so that your
clients can be engaged in the buying process. Prospects love to
see and touch what you're selling. Auto dealers let shoppers
test-drive new cars because they know that once prospective
buyers are surrounded by the smell and feel of a new car, they
imagine themselves owning it.
The same can be true with building products. If you're using a
laptop, let the client control your virtual project tour or
Arriving on time for the appointment shows that you have
respect for your clients and their busy schedules. Once at the
door, I introduce myself with a firm handshake, which shows
enthusiasm and confidence. Selling is an emotional experience;
you can transfer some of that emotion with a genuine
I don't assume the person who greets me at the door is the
prospect; it's better to say, "I have an appointment to meet
Mr. and Mrs. So-and-so."
Tell Your Story
Take some time to tell the prospects about you and your work
history in the community. Mention awards and community-service
programs or associations you belong to. Your prospects are
interested in learning more about the person who just walked
into their home.
I also describe my company and the kinds of subcontractors and
people that work for me. I'll try to find something I have in
common with the homeowners: Maybe I or one of my staff lives
nearby, or I've done another job down the street.
Be a Good Listener
Many novice salespeople think they need to do all the talking,
but in a sales appointment, listening can be more important.
You'll gather useful information by asking probing questions
— questions that require more than a simple "yes" or "no"
for an answer.
The prospects will tell you what they're looking for — a
bigger family room, an extra bath, a finished basement for play
space. After you've learned what it is that they envision, ask
a variety of "why" questions to get more details.
Qualify the Project
Once I have enough information, I'll take the time to restate
the project and explain the construction process. This will
help the potential clients see whether our company is a good
fit for the job. I call this "qualifying" the project.
For instance, I might say something like this: "If I understand
you, Mr. Prospect, you want to build a small addition to your
dining room. So what we will do is have our designer draw up
the plans, and then we'll submit them to the local zoning
office to obtain a building permit.
"About a week after the permit is issued, we'll start work with
excavation, concrete, and foundation work. Then our framing
crew will arrive and assemble the floor, walls, and roof
"Next, we'll have the siding and roofing installed while the
electrician is connecting the wires and lighting on the
interior. After the building inspector checks our work, we'll
insulate and hang the drywall. After the drywall is taped,
sanded, and primed, the finish carpenter will come in and trim
out the room with moldings and baseboards.
"Our painter comes next; he'll apply two coats of the finish
color you select, then the flooring contractor will install the
finished flooring. While that is going on, our cleanup crew
will remove the last of the job-site trash and rake the work
area, then use a magnet to pick up any stray nails or other
small metal objects. That will complete your project."
I then ask for an affirmation: "Is that along the lines of what
you were thinking?" Wait for their answer. If it's no, I'll go
back to requalify the project. If it's yes, it means you've
listened well and are closer to asking for the "order."
This may sound like a lot to say, but if done correctly and
sincerely, you will build value and trust. Don't assume that
the prospects understand the building process. They'll
appreciate the details you give them. And if you forget
something, don't worry: They'll tell you, with no harm
Customize your approach for the various types of projects you
build. Rehearse it — develop a comfortable routine for
this important step in your sales efforts. It will pay
Getting affirmations from the prospects during the sales
appointment will help you close the sale. It's okay to ask
questions that will give you the response you're looking
Think of this not as manipulation but as steering the process.
As long as you are honest and ethical about your sales process
and can provide the services that you're selling, steering the
decision process is part of being a great salesperson.
For example, I might ask, "If we can agree on the price, could
we get started on your project in about six to seven weeks? We
have an opening then."
Get an affirmation and move on to another question: "If I can
build the project within the budget we've discussed, can I
bring a proposal back to you on Thursday so that we can do
This is a way to encourage the prospects to make a decision to
hire me; getting affirmations along the way helps guide the
Ask for the Order
Research has established that as many as two-thirds of
salespeople do not ask for the order — that is, they
don't ask for the sale.
Ask closing questions in a way that encourages your prospects
to make a decision; nobody makes money on a "maybe." I ask and
encourage people to do business with me. If they don't want to,
that's okay, too: At least they've made a decision.
However, my motto is that for every "no" I get, I move closer
to a "yes."
If I get a no, I'll close the file and wish the prospect good
luck. Then, a few months later, I'll call them back just to
check in. You'd be surprised at how many contracts eventually
get signed that way.Steve Klitsch, CAPS,
owns Creative Concepts Remodeling in Germantown, Md.
The Color-Coded Officeby
I admit it. I carry a wad of colored markers the way Wyatt Earp
carried his six-shooters, and I feel just as helpless without
Colors (unless you're color-blind, obviously) provide an easy
way to discriminate visually among things — 25 sheets of
paper in a client's folder, say, or six three-ring binders
piled on your desk.
Any time not spent looking at something irrelevant can be
devoted to something more productive, and color can help you go
straight to what you want.
The primary reason to use color is for identification. I use
colored forms, colored file folders, colored labels and dots,
and colored notations on paperwork.
After creating timecards for a contractor, I instructed that
they always be photocopied onto green paper. Eight years later,
the crew still refers to them not as time cards but as "green
A cabinetmaking company uses a form to log items that are
purchased in bulk but later incorporated into specific customer
projects; the company copies these forms onto blue paper.
Nobody calls the sheets "in-house inventory forms"; when the
supply runs low, employees request more "blue sheets."
It's an approach that makes office procedures so much easier
for everyone: If you're requesting that employees hand in
paperwork, it's clearer to have a box called "Blue Sheets" (and
be sure to make the sign blue, as well) than one called
"In-house Inventory Forms."
When forms have similar names or purposes, color-coding reduces
confusion. A form on colored paper inside a folder is easy to
spot. My lead sheets are on goldenrod; whenever I open a
customer folder I can instantly pick out the address or any
other information I need on that sheet.
Colored forms stand out in the clutter of paperwork that
periodically burdens any desk, too.
Folders, Labels, Dots
Colored file folders make filing faster and more
When you're training a new employee or creating procedural
manuals, color can reflect general systems (customers have
green folders for "money in" and vendors have red folders for
"money out"). If a file is left out, it can be identified
instantly and refiled with more confidence.
You can also use colored files, labels, or dots to distinguish
among related files stored within a single hanging file.
In my office, for example, I generally have several files for
each client: One includes all invoicing information (red dot);
the second contains hardware information, passwords, serial
numbers, and registration information on software (green dot);
and the third holds organizational charts, samples of forms
I've designed for them, and general notes (blue dot).
Thanks to this approach, I never have to wade through
irrelevant pieces of paper.
When I enter a bill into my computer, I always put a checkmark
on it, using a big pink highlighter. If I drop a stack of bills
on the floor, I want to see at a glance which have been entered
into the computer and which haven't.
When I'm reconciling my bank statement, I use a green
highlighter to check off the deposits and credits and a pink
one to check off the checks and debits. This helps me keep my
place, and on bank statements where the debits and credits
aren't displayed in separate columns, the color separation can
Try it. You might even have fun with it.
Melanie Hodgdonis a business
systems consultant for builders. She lives in Bristol,