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How to Craft Proposals & Residential Roofing Contracts with Clients
Why You Need Proposals & Roofing Contracts and How They Differ
Ah, paperwork. It’s one of those “necessary evils” that every business owner needs, but tends to put off or ignore completely.
Paperwork got you down? You’re not alone and help is here!
In the roofing business, a contractor-client agreement or contract is as essential to your personal protection and safety as a hard hat and roof harness.
This article will explore the reasons why. We’ll also explain the difference between a proposal and a contract, then offer some tips on how to create both for you and your clients.
For the purposes of this discussion on crafting a contract between contractor and client, the terms “contract” and “agreement” will be used interchangeably; but be aware that the very word “contract” tends to be perceived as being slightly more official or carrying more legal weight.
Further, contracts are most often thought of as being written documents, whereas agreements are thought of as verbal consents; however, both can exist in either format.
While such nuances are interesting, it’s much more important to recognize the vast differences between a proposal and a contract/agreement. So, let’s start there.
What’s the Difference Between a Proposal and a Contract?
Simply put, a proposal is a marketing piece that suggests to a prospect all you can do for how much.
A contract is a legal document that confirms with a customer exactly what WILL be done by when and for how much. Think: PROposals are for PROspects; CONtracts are for CONtractees.
The chart below shows you at a glance 10 main differences between a proposal and a contract. As you can clearly see, the differences are at opposite extremes.
| PROPOSAL | CONTRACT | |
|---|---|---|
| TARGET | Prospects or leads | Contractees or customers |
| POSITION IN THE BUYING CYCLE |
Start | Finish |
| PURPOSE | Marketing | Legal |
| OBJECTIVE | Conversion to sale | Confirmation of sale |
| TONE | Conversational, persuasive, friendly | Formal, but legalese can be simplified. Must be clear and comprehensive |
| FORMAT | Personalized to each prospect | Standardized, but with appropriate variables |
| OPTIONS/ EXTRAS |
Recommends add-ons, upsells | Defines and prices any options chosen |
| PRICING | Offers estimates or quotes, may be open to negotiation/change | Confirms and finalizes pricing and terms as mutually agreed upon |
| COMPETITION | Yes. You’re in a field of several. | No. You’ve been chosen. |
| FORCE | Solely for information purposes | Legally binding |
As we discussed in a previous article, homeowners are encouraged to contact three to five roofing contractors for quotes prior to selecting one. So, to win the job, you and your proposal need to stand out from your competition.
Here’s how.
How to Craft a Winning Roofing Proposal for Homeowners
Whether you’re replacing a roof, constructing a sales proposal or developing a contractor client-relationship, you have to build quality into every step of the process.
That starts with your first contact, your sales presentation and the resulting proposal.
We talked about the importance of first impressions previously. We also offered our recommendations for effective sales presentations.
Before you write your proposal, you will have already successfully passed that all-important sales presentation stage.
After your sales presentation, you should send your prospects a follow-up email to thank them for their time and consideration. Restate your interest in serving them and give them a date when they can expect to receive your proposal.
It’s important to submit your proposal ahead of your competitors, especially if the project is a roof repair or replacement and time is of the essence. Always build in a realistic cushion of time when promising to deliver your proposal. Never miss your own deadline and always strive to beat it.
Many roofing contractors have already discovered the tremendous benefits and time savings of software apps that allow them to estimate jobs, prepare quotes, track analytics and do so much more on the go from their mobile devices.
For example, EagleView Technologies is a service that uses aerial technology to take fast, detailed and accurate roof measurements so you can estimate your jobs much more precisely.
Software apps, such as improveit360, greatly simplify the quoting process so you can prepare your quotes faster than ever before, getting them to your prospects ahead of your competitors. This particular software is also a Customer Relationship Management (CRM) system, offering you business insights and analytics.
Software AdviceTM is a review site where you’ll find a comprehensive list of such apps specifically designed for the roofing and construction industry.
Reputable roofing contractors source reputable suppliers, so you should have access to professionally prepared marketing materials, such as, presentation folders, quote templates, and product literature.
Be sure to use them to present your proposal with the same attention to detail and branding as your initial sales presentation.
Consistency in all your presentations reinforces the idea of quality and commitment in your prospects’ minds whether or not they’re aware of it. It’s a psychological subtlety many competitors may overlook.
While it’s still common practice to try to close a sale in one call, it’s tougher today because homeowners often want to double-check what they hear in a presentation after the pitch.
Filling in a quote or a proposal form by hand is still widely accepted. Just be sure to do so neatly. Don’t be “that guy” who scrawls figures on the back of a coffee-stained napkin!
Like your sales presentation, your proposal is essentially a marketing piece. You’re still persuading the prospect to choose you and your company over others. What does that mean in practical terms?
Your prospect’s main reason in requesting a proposal from several roofing contractors is, quite naturally, to compare prices. You don’t want to win the job for being the cheapest choice, you want to win the job by being the best choice.
So, even though you’ll be costing out the various options you discussed with the homeowners, you need to focus their attention on the value you offer them.
- Are you confident in the quality of your materials and installers’ workmanship?
- Are the manufacturer’s limited warranties solid?
- Do you offer the most in-demand color blends available?
- Do you go out of your way to ensure satisfaction and protect the homeowner’s property?
What other priceless intangibles can you include to create genuine value and set yourself apart?
Keep things as simple as possible, yet maintain a friendly, humble, but persuasive, tone. Apply the time-tested rules of advertising to influence a positive outcome:
- Put the focus on the homeowner, not on yourself.
- Use the words “you” and “your” more often than “I”, “we” and “our.”
- Make every sentence lead to the prospect saying “yes.”
- End the proposal with a very specific call to action.
- Ask for the sale and outline the next steps.
Research shows that the closing, “Thank you in advance for your (time, consideration, help, cooperation, business, whatever applies)” boosts response considerably because it subconsciously assumes that whatever action you’ve asked of the reader will have already been taken.
We hope you’ll try some of these tips and techniques the next time you draft a sales proposal, and we’d love to have you share any successes with your colleagues by posting your comments on IKO’s Facebook or Twitter accounts.
Now, let’s talk about that all-important piece of paper: the contract between contractor and client.
The Basics of a Contractor Client Agreement
Contracts are legally binding agreements designed to protect the rights of both parties involved, i.e., you as the “Contractor” and the homeowner as the “Contractee”. Having a contract can help you, as the roofing contractor, collect payment or defend against claims.
Signing a contract provides the homeowner with the peace of mind knowing that you are operating a legitimate business and the assurance that you will perform the work as promised in the proposal.
Before we get into this discussion, we need to provide some fine print qualifiers of our own.
Because contracts are legal documents, provisions will necessarily vary according to federal, state, provincial and/or municipal legislation; so, it’s important to have any contracts you draft reviewed and approved by appropriate legal counsel.
It’s impossible for this article to cover every eventuality; it is intended to provide information of a general nature only and is not to be construed as offering any specific legal advice.
Below, we’ll discuss the various elements that a proper roofing contractor agreement should address. The good news is that, once you’ve formulated a contract and had it reviewed and approved by your legal counsel, the form itself is pretty much standardized.
There will be blanks to fill in for pricing and other variables, some clauses that may or may not apply in certain cases; but, overall, your contract will be much more stable than any customized sales proposal.
That said, whenever you’re made aware of any changes in legislation, worker safety policies or other legal issues, always have your counsel review and update your standard roofing contract accordingly to ensure that it contains the most current terms and that those terms are legally enforceable.
As a best practice, consider doing so every quarter or semiannually to be sure that new laws or regulations haven’t slipped by your notice.
Items to Include in a Contract Between Contractor and Client
Basic contact information for both parties:
- Your name, company name, company address, phone, email, license number/ID.
- Homeowner’s name, address, phone, email.
- Location of where work will be done, if different from above.
Compliance with local codes:
- Legal jurisdiction governing contract.
- State/provincial/municipal laws and ordinances, including any required permits, licenses, zoning notices, inspections, etc.
Copies of proof of insurance:
- Bonding (if applicable).
- Liability.
- Worker’s compensation insurance.
Scope of work to be done and itemized pricing:
It’s a good practice to combine these items so the homeowner knows exactly what’s being done and how much each aspect of the work is going to cost. Include costs for both materials and labor.
- Describe the job in great detail, whether a new or replacement roof or a repair and include expectations for the finished project.
- Include details and pricing for every option discussed and agreed to.
- Materials – Specify the brand of roofing products to be used, e.g., type, color blend of asphalt shingle, type of underlayment, ice dam protection, starter strip as well as other items, such as, plywood to replace decking, vapor barrier, flashing, roof vents, wind turbines or other roof structures, and soffit and fascia.
- Assign a quantity to every material and both a per-unit price and total price for each, how many squares or bundles of shingles, linear feet of starter strip, etc.
Installation methods:
- Specify how the various components will be installed. Keep in mind that some roof shingles can be installed with four nails, but, if the homeowner is paying for a wind-resistance limited warranty upgrade, six-nail installation may be necessary. If so, it will need to be specified in the contract.
- Most roofing projects will be sloped applications of shingles, but, in some areas, flat roofs may call for roll roofing. Be sure to specify installation methods and state your full compliance with the manufacturer’s recommended method of installation.
- Outline how you propose to keep the job site clean, properly dispose of old roofing materials, project waste, pick up roofing nails, etc.
Scheduling:
- State specific dates for starting and completing the work.
- A “no later than” clause may be required in some jurisdictions, which can render the contract null and void if the contractor fails to start on time.
- Describe your policy for handling, scheduling and pricing change orders.
Payment terms and conditions:
- Clearly state all amounts — deposits, interim payments, balance due — plus all applicable taxes along with timelines for each payment and actions to be taken in the event of nonpayment.
- A “right-to-rescind without penalty” provision may be required in some areas, giving the homeowner the right to cancel the contract within a specific time period of 3, 10 or up to 30 days. If not required by law in your area, you may wish to establish your own policy. If so, be sure to detail it in the contract.
Warranties:
- If you warrant your installers’ work/labor, clearly describe the coverage offered, the limitations and duration.
- Manufacturers’ limited warranties typically cover materials only in the case of product defect and periods vary; be sure that the homeowner fully understands the provisions and coverage offered by all warranties.
- Most claims arise many years after installation, and homeowners are dismayed to realize they didn’t fully understand the warranties at time of purchase. To avoid this, consider preparing a second, separate document for the homeowner to sign, verifying that he or she has read, understood and agrees to abide by the terms and conditions as outlined in the contract and manufacturer’s limited warranty.
By following the guidelines above and obtaining appropriate legal counsel, you and your company should be well-protected. Here are some resources for further information:
Legal contract issues for Canada (ON)
