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How many of you require that owners make all selections prior to finalizing SCA’s and/or signing a contract? This is an avenue that I think Iwill be working towards, and want to know who else does this and with what success? In our area, most builders/remodelers allow for allowances then let owners go select. I feel that by requiring selections being made up front, it COULD eliminate a lot of changes later. How do you all feel about this? I am aware that I still need to give them a dollar amount to shoot towards to keep within budget. What do the rest of you do?
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Peggy, since my jobs are all small, under about $6000, I usually have all materials selected prior to the SCA.
However, since son Tom's projects average around $125K ( $50K to $1M), he uses allowances frequently, which does two things:
1. Saves time, since the SCA with allowances allows a contract to be made, deposit received and project scheduled in a slot. I must note here that usually there are still only 1-3 allowances - most decisions have already been made.
2. It effectively takes the client off the market.
As to #1 above, we always took a different approach in our sales than most do. Tom continues to do what I used to do - picks the clients up at their home, takes them to prearranged appointments at the cabinet/countertop showroom, tile or marble showroom, plumbing showroom and when mandated, lighting showroom, usually spending one half day with them. That time is also included in his SCA cost.
So, the question is something most builders/remodelers don't really think about in depth - the "system" of selections. Most just give brochures, bring samples and/or give out addresses of showrooms. Think about what that "system" does. It educates the client as to what's available and where. Does it in any way, lock down the sale? No. In any way, does it show enthusiam by the contractor to the selections being made other than his/her comments about them? I'm sure in many instances, the clients "perception" is - no, and is why so many clients don't even notify contractors they've decided to hire someone else. Tom's approach is different. More importantly, it works. Works how? He can't write contracts fast enough. Out of the "trench" thinking. You see, "Tommy", as his clients affectionately call him, has removed his role from the relationship as a "contractor" and replaced it as the role of a "friend." Ask those who write books about salesmanship what advantage that gives him as opposed to the other sales "systems" currently being used in the "trench."
Granted, sometimes these people's selections are higher than his ball park allowances. In one case, the client mentioned to Tom that his ball park was around $150K and the price actually came out to about $167K. Tom purposely asked them for their copy of the ball park (as opposed to getting out his own) with the allowance amounts. Their copy showed the reason for the difference compared to their actual selections. The husbands reply was simply "OK. When do we start." Simple clarification and communications - on paper.
BTW, the above particular project really ended up being about $185K because they also decided to remodel another bathroom while Tom was going to be there anyway. Goes to show what Rick has stated repeatedly - never assume you know what people are willing, or can afford to spend. And don't sell your company. Sell yourself.
*as per sonny & son...(( picks the clients up at their home, takes them to prearranged appointments at the cabinet/countertop showroom, tile or marble showroom, plumbing showroom and when mandated, lighting showroom, usually spending one half day with them. That time is also included in his SCA cost. ))this is what we do also.. based on this ""shopping """ trip.. we set the ALLOWANCE..but my caveat is that the plumbing fixtures will be purchased from the plumber... so he can warrant them...after they have a list of fixtures and alternates i give the list to the plumber, he prices them .. and that becomes the basis of the ALLOWANCE...this allows them the leeway of changing their selection.... or downsizing their allowance....
*Er, SCA = ?
*it's an acronym that sonny insists on using.....it makes a lot of sense.. but i can never remeber what it stands for either...come on sonny ... with all your verbosity...couldn't you say the words.. just the first time you use them in a post...?(SCA = ?????????)...have mercy.. advanced CRS (crs = can't remember sh*t )
*Mike, ditto for Tom with the plumber, and for the same reason. Then based on the plumber's "installed" price, we just put our markup on it. Actually, we do the same on the cabinets, tops and tile/marble. As you said, it is a "shopping trip" for selections only. Pricing to be determined after they/we leave the showroom.Ssometimes by the time Tom has the SCA ready, he's received some of the prices from those showrooms/subs and adjusts his SCA accordingly, leaving only 1-3 allowances to be adjusted.Bob, I'll find the thread where SCAs were discussed and advise you of it via email. In short, it's a Proposal, but one that the client pays you to create and assemble - Specification & Cost Analysis (SCA).Mike, I'm curious if your "system" also provides you with an easier close, higher closing ratio, or similar relationships established as it does for Tom and I?
*Peggy, Our company arrives at a contract price by setting specifications selected by the client. Finish items (floorings, light fixtures, counter tops, etc.) are shown as an allowance item but are clearly stated in the specifications as to what was selected. It is time consuming to do this initially, yet simplifies the construction process and helps eliminate the "Oh, I thought I was getting" statements. The construction process takes time, and many wishes are discussed in the planning stages. As a superintendent, I carry a copy of the project specifications with me at all times, and can eliminate a lot of confusion on site because selections were made prior to starting construction.I hope this helps.HVbuilds
*sonny... (( I'm curious if your "system" also provides you with an easier close, higher closing ratio, or similar relationships established as it does for Tom and I? )).... yes it does... the weakness is that it isn't a system...it is just the way i do business... i'm working on making it a system....if i can ever take care of these alligators... i'll get down to draining the swamp.....still wearing too many hats.....
*Thanks for all the reply's. It seems to me that including the time to visit the showrooms with the client and including the costs in the SCA is the best idea. I'm paid for that time (another selling point for being paid for SCA with client). The whole point to this is that I want to have as much picked out on the front end as possible. As you all know, cabinet and counter tops can alter everything from framing to wiring. How many of you require selections be made prior to starting construction?Peggy
*Peggy, I don't think any allowances should exist prior to starting date other than minor stuff like paint colors, faucet selection, etc. As you know, anything more suubstantial than that can, and often will, create a new can of worms. Remember, you know the process - they don't. You should exercise control for and in, that aspect. Make it part of your contract. "Allowance Deadline Requests." Notice "requests" is less arrogant. A few following sentences can explain the reasons.Also, read between the lines. Those clients who, during the sales stage and later, exhibit extreme un-decision making capabilities should be hand holded and a tactfully assertive stance initiated. In other words, "Look out!"
*Ok, for those of you getting paid for SCA's (specification and cost analysis), can you tell me since you are charging for this service, doesn't the owner expect a line by line detailed description, sort of like a cost + breakdown? What format do you offer in providing this service? Do you keep your overhead and profit within the line items or do you have separate line items for your overhead & profit? I am curious as to what shape other's SCA's take on.Thanks,Peggy
*Peggy, since an SCA is the same as a Proposal or Contract with all of the specs, a breakdown is not needed. Mine just shows the bottom line price, deposit and payouts. The line by line breakdown is the applications involved by trade or room including model numbers, colors, etc. and other pertinent info. For example, "2-1/4" non-finger jointed pine colonial casing", or 1/2" x 3/4" base shoe. Sure we all know all base shoe is 1/2" x 3/4" but they don't.Used in combination with CSCS it's very effective. My CSCS states, for exmple, the for the electrical, all wires contained within electrical boxes will be twisted together prior to installing a wire nut, as opposed to just pushing all of the wires into a nut and twisting the nut. Or fastening the wires to the side screws of receps and switches instead of pushing them into the small hole in the back. I then explain the reasons.I usually get somehthing like "Oh! I didn't know that. Good idea."
*I was not sure about this SCA thing, so I did a little research. The Society for Creative Anachronism http://www.sca.org/ The Student Conservation Association www.sca-inc.org The Supreme Council of Antiquities http://guardians.net/sca/ SVENSKA CELLULOSA AKTIEBOLAGET SCA http://www.sca.se/ Swiss Curling Association http://www.curling.ch/ Scientific Computing Associates http://www.sca.com/ Scottish Croquet Association http://www.sca.com/ Society for Commercial Archeology http://www.sca-roadside.org/ Dunno if this helps or confuses.
*Sonny,Ah, yes, now I remember. I've seen the thread.(FWIW, while I don't agree with some of your posts/ideas, they are among the most thought provoking I see posted. Keep up the "verbosity"! )Bob
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How many of you require that owners make all selections prior to finalizing SCA's and/or signing a contract? This is an avenue that I think Iwill be working towards, and want to know who else does this and with what success? In our area, most builders/remodelers allow for allowances then let owners go select. I feel that by requiring selections being made up front, it COULD eliminate a lot of changes later. How do you all feel about this? I am aware that I still need to give them a dollar amount to shoot towards to keep within budget. What do the rest of you do?