contracts,bids,proposals??

Discussion in 'Business Operations' started by jason r., Nov 5, 2002.

  1. jason r.

    jason r. LawnSite Senior Member
    Posts: 338

    this might sound like a newbie question but,

    what is the difference?

    contract-

    bid-

    estimate-

    proposal-

    do you use a combination of these? or just one or the other?
    also, what are the legalities of each(what does or doesn't hold up in court)?:confused:
     
  2. walker-talker

    walker-talker LawnSite Platinum Member
    from Midwest
    Posts: 4,771

    Sounds like a contract is an agreement bound by the law. A bid, estimate, or proposal are all the same. I use the the word estimate.

    MATT
     
  3. greenman

    greenman LawnSite Addict
    Posts: 1,405

    Yeah, its a very newbie question.:rolleyes:
     
  4. GroundKprs

    GroundKprs LawnSite Bronze Member
    Posts: 1,969

    Your bid, estimate, or proposal is just a (written) solicitation to a potential client. When he accepts, (in writing), now you have a contract.

    Of course, you can do verbal estimating and contracts, but I like written so there is no chance for confusion.
     
  5. Fantasy Lawns

    Fantasy Lawns LawnSite Bronze Member
    Posts: 1,913

    One should create an Estimate to submit a Bid for a Proposal, which if accepted should recieve a Contract

    Some customers will have a Proposal outline, which will have considerations concerning the work they want a Bid to include .... at this point ... an estimate will be created using this information & again if accepted (signed or verbal .... we want the signed one .... it's easier when it's all spelled out in writing) that is the Contract
     
  6. dforbes

    dforbes LawnSite Member
    Posts: 195

    my definitions would be

    contract: legal and binding between customer and company explaining exactly what will be done for how much comansation

    Bid: how much you will charge to complete a job according to customers specifications (exact amount)

    Estimate: how much you think it will cost to complete the job either their specs or yours (price can go up or down depending on problems or unforseen expenses)

    Proposal: how much you will charge to do the job using your specs for materials and labor (this may change until final proposal then were looking at exact amont)
     
  7. B. Phagan

    B. Phagan LawnSite Member
    Posts: 95

    After over 20 years in this profession, I would define these words as follows:

    A bid: numbers you send to a prospect relative to what you will charge for that service. You just may get the job if you are the low bidder!

    CONTRACT:aka Agreement: Legally binding written document, with green industry disclaimers for our protection, indicating services that will be provided as required and weather permitting, executed by both parties, inclusive of various T"s & C's, depending on the client with legal recourse for us if they don't pay or choose to discontinue our services without cause or due to the dormant season.

    Note: Most people will execute an agreement but maybe not a contract.

    Proposal: A mutual agreement between the prospect/customer and contractor as to services, selling price, T's & C's, etc.

    Estimate: Your selling price of the service based on your SLOWED DOWN, DISCIPLINED AND KNOWLEDGEABLE estimating system inclusive of your direct job costs, overhead recovery and profits required for your family and business.
     
  8. jason r.

    jason r. LawnSite Senior Member
    Posts: 338

    it really cleared up some questions i've had for last few years.
    some people are scared to ask these newbie type questions, no matter how long they've been in the biz, but if you don't ask then you don't know! thanks, again.
     
  9. B. Phagan

    B. Phagan LawnSite Member
    Posts: 95

    Jason,

    "Newbies" will never get to be old sages unless they ask questions.....the business aspects of this profession can be treacherous due to our ignorance......going back a few years when I started my 45 person operation, I should've named it "Murphy's Law Lawn Care".........just due to my ignorance about the green industry business aspects......believe me, having this knowledge will determine just how successful people are in any profession, especially ours.

    And btw, there's no such thing as a dumb question.........lots of really, really smart people ask them.......that's why they are so smart!!

    Too many of us are embarrassed to ask any question for fear someone will think our edger blade ain't too sharp! Shame.

    Keep asking questions......you'll get where you want to get to faster!!
     

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