Profit Protection Checklist
for Design/Build Businesses and Homebuilders
Okay, here are 60 points for a "Profit Protection Checklist" geared towards design/build businesses and homebuilders, broken down into categories. This is a comprehensive list, and you can tailor it to your specific masterclass content and target audience's needs.
I. Tender Process & Pricing
1
Detailed Scope of Works
Ensure a meticulously detailed scope of works to avoid ambiguity and disputes later.
2
Accurate Cost Estimation
Utilize historical data, industry benchmarks, and software to create realistic cost estimates.
3
Contingency Planning
Include a contingency budget (e.g., 5-10%) for unforeseen expenses.
4
Profit Margin
Clearly define and build in your desired profit margin.
5
Price Escalation Clause
Protect against material price increases with a clear escalation clause in the contract.
6
Payment Terms
Establish clear payment milestones and terms that are favorable to your cash flow.
7
Competitive Bidding
Obtain multiple quotes from subcontractors to ensure competitive pricing.
8
Drawing Accuracy Verification
Thoroughly review architectural and engineering drawings for accuracy and completeness before finalizing pricing.
9
Specification Clarity
Ensure all materials and finishes are clearly specified to prevent costly substitutions.
10
Permitting Costs
Accurately account for all permitting fees and associated costs.
11
Site Conditions Assessment
Conduct a thorough site assessment to identify potential challenges and adjust pricing accordingly.
12
Utility Connection Costs
Factor in the costs of connecting to utilities (water, sewer, electricity, gas).
13
Demolition Costs (if applicable)
Accurately estimate demolition and debris removal costs.
14
Insurance Requirements
Verify and include the cost of necessary insurance coverage (liability, builder's risk).
15
Legal Review
Have a legal professional review the tender documents and contract before submission.
II. Contract Clauses & Legal
Payment Milestones
Structure payment milestones to align with project progress and minimize financial risk.
Progress Payment Schedule
Define a clear schedule for progress payments tied to completed work.
Retention Clause
Include a reasonable retention clause to ensure satisfactory completion of work.
Dispute Resolution Process
Outline a clear process for resolving disputes with clients or subcontractors.
Termination Clause
Define conditions under which either party can terminate the contract and associated penalties.
Force Majeure Clause
Address unforeseen events (e.g., natural disasters) that may impact project timelines and costs.
Change Order Procedures
Establish a formal process for handling change orders, including pricing and approvals.
Warranty Period
Clearly define the warranty period for workmanship and materials.
Indemnification Clause
Protect your business from liability arising from the actions of others (e.g., subcontractors).
Governing Law
Specify the governing law that applies to the contract.
III. Pre-Construction & Planning
1
Project Schedule
Develop a detailed project schedule with realistic timelines for each phase.
2
Permitting Timeline
Establish a realistic timeline for obtaining necessary permits.
3
Material Procurement Plan
Create a plan for procuring materials, considering lead times and potential delays.
4
Subcontractor Agreements
Formalize agreements with subcontractors, including scope of work, pricing, and payment terms.
5
Site Safety Plan
Develop a comprehensive site safety plan to minimize risks and comply with regulations.
6
Pre-Construction Meeting
Hold a pre-construction meeting with the client and key stakeholders to review plans and expectations.
7
Material Staging Area
Designate a secure and organized area for storing materials on site.
8
Waste Management Plan
Develop a plan for managing construction waste and debris removal.
9
Quality Control Procedures
Establish procedures for ensuring quality control throughout the construction process.
10
Communication Protocols
Define clear communication protocols with the client, subcontractors, and team members.
IV. Variations & Change Orders
1
Formal Change Order Process
Implement a formal process for documenting and approving change orders.
2
Upfront Variation Pricing
Price variations upfront and obtain client approval before proceeding with the work.
3
Variation Impact Assessment
Assess the impact of variations on the project schedule and budget.
4
Variation Documentation
Maintain detailed records of all variations, including costs, approvals, and communications.
5
Variation Payment Terms
Clearly define payment terms for variations in the contract.
V. Materials & Subcontractors
Material Management
- Perform accurate material take-offs to minimize waste and ensure sufficient quantities.
- Order materials in a timely manner to avoid delays.
- Coordinate material deliveries to align with the project schedule.
- Inspect materials upon delivery to ensure quality and accuracy.
- Store materials properly to prevent damage or theft.
- Monitor material prices throughout the project to identify potential cost savings.
- Build strong relationships with suppliers to secure favorable pricing and terms.
- Avoid unauthorized material substitutions by subcontractors.
- Implement measures to minimize material waste during construction.
Subcontractor Management
- Select qualified and reliable subcontractors based on experience, reputation, and pricing.
- Formalize agreements with subcontractors, including scope of work, pricing, and payment terms.
- Verify that subcontractors have adequate insurance coverage.
- Provide adequate supervision of subcontractors to ensure quality and adherence to the schedule.
- Pay subcontractors promptly according to the agreed-upon terms.
- Regularly evaluate subcontractor performance to identify areas for improvement.
- Obtain lien waivers from subcontractors and suppliers upon payment to protect against liens.
- Monitor any sub contractors or tradesman charging daily rates.
- Enforce strict deadlines on trades and subbies to avoid delays.
- Ensure quotes are itemised from trades to avoid disputes later.
VI. Project Close-Out & Handover
Final Inspection & Punch List
Conduct a thorough final inspection with the client and create a punch list of items to be addressed before final payment.
Remember to:
Customize
Adapt this list to reflect the specific challenges and best practices relevant to your region and the types of projects you undertake.
Explain
In your masterclass, thoroughly explain each point, providing real-world examples and actionable advice.
Simplify
While comprehensive, make sure the checklist is user-friendly and not overwhelming for your audience.
This detailed 60-point checklist provides a solid foundation for your "Profit Protection" system. Good luck!