Should Builders Provide Free Estimates?comments (10) September 20th, 2012 in Blogs
Providing "free estimates" has long been part of the building trades, covering everything from paving a driveway to replacing a roof. A customer calls, the contractor responds. Whatever time the contractor invests in coming up with the estimate is considered part of the cost of doing business.
Or is it? Ccmorical isn't so sure the practice makes much sense.
"Why does the remodeling industry believe it must offer free estimates?" ccmorical asks in a post in the Breaktime Business forum. "When I do a call for an addition, I probably spend at least a day making the call, working with the owner on design issues, measuring, sketching, researching, estimating, proposing, and presenting. All with the hope they use me instead of taking my hard work and giving it to some other company. It probably cost me a few hundred bucks. What do you think? We need to start charging for our services."
Charge a fee for providing an estimate
Mike Smith is one builder who isn't enamored with providing free estimates.
"I qualify the leads and inquiries over the phone," he writes. "Most of the time I will meet with the propsect, listen to their needs...explain what we can do. Since we're 'design/build,' I offer to do the design for a fee. If they already have a plan and specs, I offer to prepare a proposal...for a fee. If they pay the fee...they will probably hire us to do the work. If they don't pay the fee, that's my out to move on.
"Anything that requires estimating, pricing and written proposals has a fee attached," he adds. "It sure eliminates the tire kickers."
Another way of approaching it, Mike Smith says, is to stop calling them "estimates" and start calling them "proposals."
"Guesses are FREE," he writes. "Tell them if they want a PROPOSAL you have to charge to prepare it. A proposal means you're going to bet the ranch...there are only three possible results when you offer a proposal if they accept it...you will make money, you will lose money or you'll break even...the last two are not why you're in business."
CCmorical sometimes meets four or five people in a day, he tells Mike, and he needs a way of discovering early in the process whether a potential client is worth the time and effort that will go into preparing an estiamte.
"This is not being rude," he adds. "It's just good sales strategy. The only thing that really pays the bills is finding a way to get paid for what you do."
If ccmorical is meeting that many people in a day, davidmeiland wonders whether he's doing enough to screen potential clients.
"Meeting with 4 or 5 people per day, you're not doing enough on the phone to figure out who is actually going to hire you, and who just wants a free consultation," davidmeiland writes. "Do you ask them what their budget is? Do you ask them who else they are talking to? Do you ask them how they got your name? Where are these leads all coming from?"