The key to an effective contract is covering everything clearly. With all of the details you’ll need to remember, it is very common to overlook something.

Here are a few tips offered by Builder News Magazine:

• The Price Escalation Clause (PEC). In a world where the lowest estimate normally wins, most remodeling contractors quote a fixed price. In many cases this doesn’t allow for the unforeseen price increases in materials or building permits. A way to get around this without scaring the client off is to include a price escalation clause. You can word this clause in a way that allows for you to increase the cost of the project only if materials increase by a certain percentage.
• Bankruptcy Avoidance. Desperate times call for even more precautions, such as a bankruptcy avoidance clause. This situation might come into play if you signed a contract several months ago with a fixed price quote. In the meantime, costs have gone up significantly, leaving you in the red if you even attempt the project. A PEC in the contract or some other clause can help to prevent your company from taking so large of a loss that it puts you in jeopardy.

These are just two examples of how lacking the proper language in a contract can get you into trouble. Another quick suggestion to protect your bottom line: include a statement that deals with when the client causes the project to last longer than you had projected and agreed upon. This can end up costing you an untold amount of money if it conflicts with your other projects.

1. Be Timely

Timeliness and consideration will help you to stand out from other contractors. Never be late to estimates. If you ever find that you are going to be late, even by 5 minutes, call the homeowner. This small gesture will get you a long way when it comes to sales.

2. Dress the Part

Our goal for appearance is to look clean and professional while avoiding looking stiff and cold. We recommend the following dress code for estimates:

• Company shirt
• Khaki pants or shorts (no jeans)
• No sandals

Greet the client at the door, introduce yourself and your company, and ask all decision-makers to join you outside. Keep in mind: You are not there to sell a job, you are there to sell yourself. Typically, the more that you talk about business and the job you’re going to do, the less likely you are to book the job.

3. Build Rapport

Understand that the clients are not buying a construction job, they are buying you. Look around their home, what do you see? Spend your time getting to know them on a personal level before talking about the job. Let people tell you about their lives and what interests them.

Here are some examples:

• How long have they lived at their house?
• Where are they from?
• How many kids do they have?
• Where did they go to school?

These are just a few examples of ways to build rapport. The important thing to understand is that it does not matter what you talk about, as long as you are genuinely interested. Don’t fake rapport; people can read it from a mile away.

4. Maintain Control

Don’t let the client start walking you around the house and pointing out what they want to have done. The estimate should be done at your pace, with you leading the way. Take your time to explain small details so they know that you are paying attention and actually care about their home.

5. Own the Initial Walk-Around

The purpose of the walk-around is to establish the parameters of the job (which parts of the house need work, which don’t, and special concerns and needs of the client), to gain their confidence (explaining process and technique, listening and satisfying their concerns/needs), and, most of all, to build rapport. We are not entering estimates with the goal of closing. It is your responsibility to develop a personal relationship rather than a business relationship with each client.

For more advice on what NOT to do, check out the following post: 7 Common Mistakes When Giving an Estimate. Good luck!