A simple yet effective introductory question asking what your client expects from your company is effectively a verbal brief. From this answer, you can establish the task at hand, the estimated timescale, and the revenue you can expect from the project. You can also use the client’s response to further question them.
Additionally, the response informs you of how serious your potential client is about the project. Offering a short answer with no detail likely implies a lack of attention to the project. It could indicate a difficult time ahead with a client that may not be as engaged in the process as they need to be.
Securing the first meeting with a potential client is an outstanding achievement. Still, it would be premature to celebrate until you know that you can deliver what’s needed. Building a relationship can be a tricky balancing act. Showing that you will do all you can to accommodate their needs while ensuring you don’t overcommit.
A good way to prepare for the meeting is to understand what dates will fit your estimating schedule for your available labour and material lead times. Are you able to return a price within a week if asked? And can you mobilise your team and order materials in time to start work in two weeks if your price is accepted?
Each client and project team will have different expectations on start dates, completion dates, and how you achieve them. If the dates are unachievable or the program durations are too short, now is the time to put your cards on the table and tell them straight. This may help them justify potential project delays to their client or respect your honesty, which could reinforce the relationship.
If you are a services, structures, or façade contractor, your works could include a hefty design component. It is important to clarify from the outset whether the client needs you to provide design and engineering services for the project or whether you are to provide shop drawings and as-built drawings.
Being responsible for the design would mean that you either have to employ in-house design professionals or outsource the design component to a consultant. In addition, taking on the risk of design, relevant insurance, and responsibility of co-ordinating your design with the architect, structure, services, and other stakeholders.
Depending on the project, taking on the design may be incredibly beneficial by offering efficiencies in time and resources and potentially allowing you to make huge material cost savings. However, you need to balance this with the added risk of managing the design, including the potential for coordination issues costing you management time to resolve, amongst other matters. You will need a complete understanding of what is required from you before committing to taking on this enormous responsibility.
What may seem like a dream project can quickly become a nightmare if the payment terms aren’t agreed upon upfront. If you have submitted your invoice without understanding the payment terms, the client may be late in paying or may not pay at all if you haven’t met their requirements.
It is best to ask what their terms are, what date they need the payment claim to be issued, how it should be issued, and what paperwork you need to provide with it.
If the payment terms are not something you can agree to, make it clear what you can agree to, and if you cannot find an agreement with your client, you may have to withdraw from tendering. If the client is reasonable, they will understand your position and respect that you have discussed it upfront. Rather than using up their valuable time just to find you can’t sign a contract and forcing them to re-tender the package.
As well planned as a project is, no project runs entirely smoothly. Especially in the commercial building sector, aspects of a project may be changed to reduce costs or save time.
By asking what aspects of the work are non-negotiable, you establish flexibility throughout the project. Certain aspects being off-limits trims your choice when deciding which parts of the project to change. Suppose the client says the entire scope of work or agreement terms are non-negotiable. In that case, this sets the tone for later negotiations and could be a red flag as setbacks are almost inevitable.
Once you have an idea of the project brief and non-negotiable aspects, ask what your client sees as the project’s next step. This indicates how serious your client is. Having thorough notes and knowing the route forward demonstrates a client is invested in the meeting. In contrast, an unsatisfying answer shows a lack of interest in the business relationship.
Furthermore, this allows you to prepare for the next step. Having a good idea of what is needed and when will enable you to organise your staff and resources, positioning yourself for the next stage. A solid answer to this question allows both sides to take the project forward quickly and effectively. In contrast, a non-answer is an indicator to avoid further engagement.
If you’re in commercial building and need consulting services for client acquisition and more, contact us today to find out about our range of consulting services from our expert team.
]]>If you choose the former, there is only so long you can absorb these costs because it becomes unsustainable. At some point, these costs will have to be passed on, but how can you do this without losing valuable clients?
Fortunately, there are some tactics you can put in place that will help ease the impact on your clients and allow you to continue to grow your business.
A large component of transferring the rising costs of raw materials onto clients is how effective your communication, marketing and public relations are. If you just raise the prices without saying anything, questions are going to be asked and some clients are likely to turn their back without even asking why.
Most clients are aware that indexation, supply chains, transportation costs and labour expenses all rise annually, so these price rises are inevitable. It is better to regularly put small price rises in place rather than hold on until you must hike the prices up dramatically.
Get the message out through your social media platforms, email campaigns and other formats that prices will be rising and explain the reasons why. Include information in your terms and conditions that prices are subject to change depending on external factors that could result in costs going up.
If you are not proactive with your messaging, it opens an opportunity for your competition to control the message and position your brand as the villain. Be open, honest and transparent and your clients will largely respect you and understand the reasons why.
If you are dealing with a large-scale project like a home or business construction, your business could potentially lose thousands if the cost of materials rise after the contract has been signed but before you have purchased the raw materials.
One option is to provide an estimate with the right information in terms and conditions. An estimate delivers approximate costs to your client, and it is not binding if you clarify payment terms in the Ts and Cs and outline that this estimate could be subject to change if material costs do rise.
This means your client will be fully informed from the outset that the prices given are only an estimate and they will understand the reasons why they might change. The wording in your estimate should include words to the effect that the prices are not guaranteed, that the estimate has been put together based on the client requirements at the time and that actual costs could change by the time the project is ready to proceed, negotiated or finalised.
Another way to protect yourself would be to clarify in your quote how long your prices can be fixed for. By being transparent about a potential increase on a date in the future and being up front with the information from the outset, you are helping your potential client to prepare correctly for cost fluctuations and showing that you have a clear understanding of the market.
If a client has given you the verbal go-ahead without signing a contract and material costs then change, the client may still be locked into the contract. For a verbal contract to be legally binding in Australia, there must be an offer and acceptance, both parties must have agreed on the terms, must intend to be legally bound and that there is going to be an exchange of money, goods or services in the transaction.
These waters can get particularly murky, so for further guidance, speak to the team at Kingsbridge Consulting.
]]>1. Pricing work
Pricing work is never an easy task –you have a short amount of time to review a tender package (typically hundreds of documents), figure out how long it will take, how much it will cost, and ask yourself what the service is worth to your customer. All while figuring out how it fits into your schedule and assessing any risks involved.
At Kingsbridge Consulting, we will reduce the pressure on you by reviewing the tender package to tell you what to focus on, where the risks are and what questions you need to be asking.
We can also highlight any essential documents missing, suggest some qualifications and exclusions to your quote and help you put together a quality submission that stands out to your client and gives you the edge.
2. Understanding contracts
Building contracts can be confusing – and may contain a lot of jargon. Sub-contractors can often be pressured to sign and return a contract leading them to skim over confusing terms. This could create issues further down the line, which is why any subbie must understand what they are signing up to and exactly what their clients expect.
We can cut through the confusion, explain any clauses you may not be comfortable with, and make sure you understand your rights and responsibilities.
>>How to get paid in full and on time>> Learn More
3. Common building project issues
Building projects can be highly stressful with plenty of unexpected challenges. Tight schedules can leave less time for admin or resolving problems in construction, and you may end up with an increased workload adding additional pressure. There is no shortage of potential roadblocks, and many of them could require contractual advice.
Kingsbridge Consulting routinely deals with problems big and small, so we have the experience you need to navigate these obstacles. Our team regularly advises our clients on delay claims, avoiding liquidated damages, scope issues, agreeing to variations, back charges, and successfully negotiating final accounts.
If the relationship with your builder is becoming strained, we can provide strategic advice to help you avoid an unnecessary dispute and ensure the best chance for repeat business.
4. Payment problems
Not every builder pays their sub-contractor appropriately – in fact, a disappointing amount of them try to save money by abusing back charges.
This can be especially problematic as sub-contractors often pay their workers before the builder pays them. Back charges and short pay come with complications that you can work around and dispute; you must seek advice if a company refuses to give you your dues. At Kingsbridge Consulting, we work to ensure that you and everyone you work with gets a fair deal at every turn.
As you can see, Kingsbridge Consulting can help sub-contractors with virtually any issue that they may face on the job. Whether you need help selecting your client, working alongside them, or dealing with a project’s aftermath, we can make sure you get a good deal. For more on our services, get in touch, and we will help however we can.
]]>We are working in a dynamic industry with an increased number of projects and a workforce feeling the pressure of working through a pandemic for almost two years. Understandably employees may be feeling burnt out and looking for new opportunities.
It’s also been predicted the global trend known as The Great Resignation is coming to Australia in 2022. In a recent PWC survey of 1800 Australian workers, 38% of respondents said they are looking for a new job, compared to 7.5% in the year to February 2021.
As a business owner, will you be able to retain your best workers and ensure you avoid burning out? And if the phone is constantly ringing with new work, and you need to expand, how can you attract the best employees?
Business owners are well aware of the day-to-day challenge of spreading themselves too thin or deciding to take on more resources to help lighten the load.
When sourcing new employees, you must consider advertising costs to find them, current and future finances to train employees to keep their skills up to date. There’s also the additional cost of wages and other potentially unexpected expenses. Does your business have the profitability to afford such costs?
Not only is sourcing new employees costly, training them is time-consuming. The upkeep for future employee efficiency takes time and skills you might not have. Are you, as the employer, expected to take on this responsibility? Especially along with everything else your business demands of you?
With this overwhelming thought in mind, perhaps it’s time to consider outside assistance to help with the day-to-day running of your business. For the more minor requirements such as calendar, appointment, email, and call managing, you might want to consider outsourcing the work to a virtual assistant. Not only will this free up the time you have, but it will also ensure the smaller tasks are completed to an adequate standard.
A virtual assistant can also help recruit team members and oversee your business’ social media (social media marketing). To find new team members, all a virtual assistant requires is a list of criteria for suitable employees and a job description. Let them do all the work from there.
For other, more significant business tasks, consider Kingsbridge Consulting. Here, we work with you, one-on-one, to provide guidance, advice and clarity when you need it most. We enhance your competitive edge, save you time, and increase revenue by taking on difficult tasks and delivering efficient workable solutions.
We will handle your contracts and help you gain clients by providing professional bid submissions. Contact Kingsbridge Consulting today and take advantage of our no-fee initial consultation. Let us help you focus on the things that really matter.
]]>When you take on a new client, it’s time to celebrate. But it’s also time to do some due diligence. A new client will ask for your references – so you should do the same.
Reach out to your network and other construction contractors and suppliers who deal with your client. Don’t be nosy but be polite. Find out gently if they have a good reputation or have had issues with payments. If this isn’t possible to do organically within your existing network, you can also engage a company to carry out a financial check. Corporate Scorecard is one of the most popular and inexpensive choices. Remember, a little market research now can save a big headache down the track.
2. Negotiate on your terms
You’ve sorted the references and you feel happy to work with your new client. What’s next?
In the subcontracting world, it’s not unusual for this to mark the moment at which the builder announces that the construction contracts won’t include your preferred exclusions, qualifications and terms and conditions. You may find that they pressure you to sign straight away – and with work often scarce, the pressure to agree is huge.
But it’s vital to negotiate on terms. This is where you have the chance to insist on how you want things to be done, and you can’t come back to this later. If your workforce is mainly labour-based (so carpenters, form workers, reo fixers, concretors and so on) you will most likely have a weekly wage bill to pay, so you should be requesting regular payments from those up the chain.
If your work involves a design component (electricians, mechanical, plumbers and so on), you may incur an upfront cost, so you should insist that a cost for design is to be paid prior to works starting. And if the documents show items you haven’t allowed for, this is your chance to make sure it is changed to reflect the agreement.
Once you have the contract, review it, send back comments and don’t sign or start work until it reflects what you’ve agreed.
3. Challenge short payments
Fast forward a little. You’ve done a month’s work, so you submit a payment claim and wait patiently for the money to hit your account.
Then the builder’s payment schedule hits your inbox. Turns out they’re paying a lot less than you claimed. Maybe they say you’ve done less work, there are defects, or they have back charges. After looking at your outgoings you realise the short payment means you can’t afford to pay suppliers and bills – or, even worse, your staff.
The builder is, sadly, completely within their rights to do this. The good news is that you are within your rights to challenge it.
Learn more about our contract review service
If you strongly disagree with the assessment, you should respond immediately, always in a tactful, professional manner. Often the person assessing your claim will be reviewing many claims in a short timescale – so it’s best to give them the benefit of the doubt. They may have missed something because they are overworked or made a simple mistake.
Often this is the reason for short payments. And any reasonable builder should welcome a friendly discussion – and may even be open to revising their assessment.
Need help?
If things aren’t resolving, though, you may need to call in some help. At Kingsbridge Consulting, we’re happy to give obligation-free advice on such matters and we recently turned a $20,000 assessment into a $60,000 payment for one of our grateful clients. This helped them avoid a lengthy dispute, not to mention a cash flow nightmare.
You can reach us by calling 0450 044 181 or contact us here.
The job of reviewing your contract is best left to a third party – they are more likely to deal with these contracts on a day-to-day basis, and they will make sure you know what you are signing up for.
Construction contracts outline the terms of your work down to the letter, but can be hard to navigate and are often written in a way that can be confusing. Among other things, the contract will show you the work you are responsible for, how long you have to do it and what the penalty is if you do not finish it in time. Even with a contract written entirely in good faith there may be items included that you would not want to agree to and this can have severe consequences for the entire project.
This makes it extremely important to have someone from the outside conduct a full review of the subcontract deed or conditions. Plenty of disputes arise from building work, and understanding your obligations is necessary for completing the job – the alternative could be costly legal fees for you and your business.
An external review service sees a lot of contracts, and that means they have grown accustomed to spotting a potential issue before they properly emerge. If someone in-house put the contract together in the first place, then someone in-house might not realise there is anything amiss – even if they have a legal background.
Trade businesses and sub-contractors especially need someone experienced in these matters as the implications of a contract dispute can have a huge impact on their time and cashflow. It is always important to have it reviewed – but this must be by a consultant who knows what to look out for.
A poor contract of any kind can quickly turn into a protracted legal battle, and this will always be more trouble than it is worth. This is yet another reason why you need to have your contracts reviewed externally by qualified professionals.
This consultant should conduct a full liability and risk assessment of the contract so that you know every one of your contractual obligations. By outsourcing this, you and your team (if you have a team) can focus on the job at hand while your consultant keeps you informed on the best course of action at every juncture.
At Kingsbridge Consulting, we use our decades of experience to help you avoid unnecessary risks when signing up to a construction contract. Our review can either focus on individual documents or provide an overview of the key documents to highlight any potential issues, risks, opportunities, and deliverables.
We can make contracting less confusing, and provide ongoing support at every stage of a project.
To learn more or book an appointment contact us.
]]>This can add a huge amount of pressure to an already difficult situation.
An enforced delay will make a tight program even tighter when you factor in the time taken to remove tools, make the site safe, and then re-mobilise. Not to mention the loss of momentum.
Fortunately, there may be ways that you can write a Notice for your Builder to grant you an Extension of Time (EoT).
This will alleviate the pressure of having to increase resources to catch up with the delay (at your own cost), in addition to protecting you from being charged with Liquidated Damages due to the delay.
Here are three examples of how you may be able to use your Contract clauses to apply for an EoT and significantly reduce your risk*:
The conditions of your contract (often referred to as General Conditions of Contract or Standard Conditions of Contract) will have a section for Delays, Time, or Extension of Time. Check this section first to see what the procedure is for claiming for a delay and how long you have to submit notice to the Builder.
There will be a section that mentions what events you are allowed to claim a delay for. These may be called Qualifying Causes of Delay or Claimable Events. The list is likely to include latent defects, variations, instructions, and inclement weather.
If the list includes industry shutdown or act of state or federal government then you should apply for an EoT using the relevant clause listing industry shutdown or act of state government as a reason for delay. If these events are not mentioned you should check out the below points…
Your Contract may have a Suspension of Works clause that enables the Builder to instruct you to suspend works and grant you an EoT.
If you are unable to claim delays due to coronavirus or an act of the state or federal government then you can request that the Builder issues a Direction to Suspend the Subcontract Works. If the Builder suspends the Subcontract Works this can give you a valid claim for an EoT.
If your Contract does not have a Suspension of Works clause it may contain a clause regarding the Subcontractor’s Program. This clause will often provide the Builder with the power to instruct a Subcontractor to amend their Program to suit changes in the Construction Program.
If this is the case, you can request that the Builder provide you with a formal direction to amend the Subcontractor’s Program in addition to granting you an EoT. When you amend the Program to reflect the government-enforced shutdown you can apply for you the EoT.
While most Builder’s will be sympathetic to the impact of the delay and have a system for dealing with and accepting delay claims, there will be some who do not respond favourably.
If the Builder’s PM rejects the EoT claim or does not respond, your formal request has at least been issued and can be referred to later. And of course, in the unlikely event of a dispute, these Notices and formal requests can be produced to illustrate the delay experienced and show that you notified the Builder of the delay in accordance with your Contract.
Before issuing your Notice you should contact the Builder and discuss the delay, the impact, and how best to manage re-commencing works. An open conversation will help them to understand the impact and will show that you are willing to work together to overcome the problem, hopefully avoiding any unnecessary additional pressure for both parties.
*Note: All Contracts are different, these examples are for information only and to provide guidance on reviewing your own Contract. When issuing Notices make sure they are served to the correct individual and in accordance with your Contract.
Kingsbridge Consulting are building and construction industry contract experts available to provide support when you need it. Get in touch with us today by completing our Contact Form or give us a call on 0450 044 181.
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