Current remodeling orthodoxy says bids are a thing of the past. But for some, including Atlanta remodeler Wright Marshall, architect-based bid work is still an essential part of the business.
To mitigate the risk of wasting time and money on a failed bid, Marshall, owner of Revival Construction, instituted a scheduling-retainer policy. When prospects approach him about a job, Marshall creates a conceptual estimate based on historical data. He then asks for a scheduling retainer — a down payment of 2% to 3% of the initial bid — before moving forward. With the retainer in hand, Marshall puts the project on his schedule, usually five to six months out, and moves forward with a more detailed estimate. If the prospects sign, he applies the cost of the retainer to the construction contract. “Basically” he says, “it hires us to put them on our calendar, to get the permitting process started, to start scheduling subs.”
Usually somewhere in the range of $8,000 to $15,000, the retainer isn't, Marshall says, “a ton of money,” but is enough to secure a commitment that changes the nature of the bid process. “Once you get past this stage, you're not really bidding out anymore,” Marshall says. “It's more of a negotiated situation. It means we're not bidding 40 projects to get 10.” Since introducing the retainer three years ago, Marshall only twice failed to build a project he was retained for. The increased efficiency of his sales process means he spends less time estimating and maintains his desired level of revenue with a lean sales and estimating staff.
The retainer also allows Marshall to begin the long process of planning, permitting, and scheduling without fearing that his efforts will be wasted. Those early steps are important, he says, because Revival Construction favors large-scope, detail-heavy projects that require coordinating a number of design and trade specialists. Plus, getting an early start on the permitting process is essential in the Atlanta metro area, where municipal bureaucracies are notoriously sclerotic.
Revival's wealthy prospects typically aren't put off by the idea, Marshall says, because they are either professionals themselves or are familiar with professional service providers, such as lawyers, architects, and event planners, who also require retainers. In any case, an adverse reaction tells him something, too. “You go through those discussions and you can really hash out whether they will be a good client to work with based on how they deal with that part of the process.”