There are two benefits to documenting your jobs. One is protecting yourself in case there is a disagreement about the project. The other is providing information that will help you when you’re promoting your business.
Writing a clear, detailed contract is only one part of documenting the jobs you build. I’d like to talk about a few other things that need to be written down and filed for every job you build.
Your estimate sheet and any supporting worksheets are the first documents that are important. They should give you a clear picture of what you are going to do, what materials are going to be used, how much labor and on what part of the job, who the subs and suppliers are and any other costs on the job.
When that is done and you reach an agreement with the potential customer, write a well-detailed contract. A contract for remodeling work should be at least ten to twelve pages in length and, for something like a large kitchen remodel or room addition, we are talking a minimum of twenty pages. A whole house remodel will be double that in length. If you are building new homes, your contract should be a small booklet. Anything less than that and you are leaving out details that protect both you and your client. A good rule to follow is to leave anything out of your contracts that you can afford to pay for twice out of your own pocket.
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You even need a written contract if you’re only doing specialty work for homeowners. The contract will certainly be smaller when the project only uses one trade, but you need to protect yourself and make sure you get paid.
Then we have the pre-job start conference which can generate change work orders, new work orders for each of your subcontractors, purchase orders for suppliers, etc.
If you’re paid by check, I suggest photocopying every check before it’s deposited. Make a note of the date the check was received.
It’s also important to have photographic evidence on every project. Before the job starts, draw up an outline of the job and select a number of spots for photos. Number the photo spots and make sure you have the job covered. Now, start taking photos at each spot before the job starts and continue through the job finishing up with a final round after the job is completed. These photos should be taken at least once a week and preferably more often. You can never take too many photos but you certainly can take too few. Also, be sure you have dates and times on the photos you take.
Every job should have a dedicated flash drive or memory card to store those photos for filing purposes. You can also use a service in the cloud, like CompanyCam, to instantly transfer photos to a file, organized by address, for only $8/month for each user.
I was involved in a multi-million dollar lawsuit a few years ago. The homeowner fired the contractor right after the concrete was poured and brought in another contractor to finish the project. When things went wrong after the 14,000-square-foot home was finished, the homeowner filed suit against the original contractor, claiming their mistakes caused all the problems.
During the trial, the contractor brought out photos taken prior to the concrete pour, showing that all piping for the electrical, plumbing and HVAC were properly installed and in their correct positions. These photos had date stamps as well. The contractor prevailed.
Photos can also be used to promote your company. Use them in print advertising, but especially on your website. Before, during, and after photos build trust, show potential clients what you can do, and help establish that you actually built that job; you aren’t just posting a stock photo and claiming it as your work.
With strong documentation on every job, both in writing and with photos, several years down the road you’ll know exactly what you did should the client start having problems, such as leaky shower stalls or windows.
The knowledge and experience Michael Stone gained in his 60+ years in construction has helped thousands of contractors improve their businesses and their lives. He is the author of the books Markup & Profit Revisited, Profitable Sales, and Estimating Construction Profitably, and is available for one-on-one consultations.