Ok here it goes.
Im a one man crew (remodeler) with a helper on the side I occasionally get a phone call for estimating additions. after a few questions and maybe go to check it out I either tell the HO that this is beyond my capabiliites right now or I decide to bid on the project. 1 st time th HO seems like he would like to go with me , I work on the estimate for a few weeks . I call with the price and then type up the contract and send it off to him… Never heard back from him. 2nd time HO has not plans just a pencil sketch for a 16×20 shed roof edition and a composite deck.
he just wants a price to frame the shell get it weather tight and he will finish the inside himself. I think sure what the hell I can do this.He is dealing with the excavation and foundation. I draw up a basic plan on my computer with a low budget home design program and bring it my lumber supplier for a material take off list and pricing.I work up a price based on the sketch and approximate windows and doors. This process takes about three weeks for me to get done inbetween going to work all day. I call hime up to let him know that i have a price for him and that thae plans i have made may be acceptable by the building inspector and he won’t need an architect, also i need his last name ( forgot to write it down during our meeting) to mail out the contract. No call back.
Now I don’t know how long it takes the average bigger company to produce an estimate for an addition but for me it can be time consuming. I just got another call yesteray for another addition. once again NO PLANS YET , just size of addition. I really want to charge the customer for these types of estimates because i have to do so much leg work and computer work only to get a no call back. I’m soory but my time is worth more than that. I give free estimates on most every type of i do. I would like to eventually land one of these addition jobs to add to my arsenal of jobs that i have done and to prove to other future customers that I can do an addition and do it well.
Here are my questions:
Charge for the estimate if so how much.?
how can i get one of these jobs when I can’t seem to get a call back?
Don’t bother to estimate any project without plans?
how often does the “I have no plans yet but want a price call happens?.
Any help here would be greatly appreciated. Thanks guys
Replies
Raymond, I have been in your shoes many times and it IS frustrating to spend so much time planning and then not ever hear back again. This is how I deal with your situation, and it has proven to be an effective (and profitable) approach:
If the customer has plans (which they rarely do) that shows they are at least somewhat serious about moving forward since they paid for the design already. All you have to do is estimate labor and materials off the plans. (Most suppliers will do the takeoff for you for free, so that takes care of the hard part.) Since we do mostly additions, I have refined the estimating process down to 1-2 hours for a complete shell (slab, framing, roofing, & siding).
If the customer has no plans, I offer them two options: 1) I can draw a complete set of plans ready for the inspector's seal and do a complete estimate off those plans for a set price, usually 300-500 bucks for a garage or room addition. That way I get paid for the estimate. 2) If they balk at that, I tell them to call me back when they have plans as I cannot give an accurate estimate from a typical conversation--most don't call back, which is fine, too.
The most common reason people don't call us back is because after they ask us for an estimate (and when we give them the REAL price) they realize they don't have enough money. I've had prospects think they could build a garage for 5 grand because some relative told them they did it for that. How it's still standing, I dunno.
Generally, for any estimate that I know is going to take more than 1-2 hours of my time, I charge them by the hour for the estimate, unless they sign an agreement saying they will use us to do the work. And, in that case, most people don't care what you charge (within reason).
Jason Pharez Construction
Framing & Exterior Remodeling
Thanks jason and all who have answered me an this what seems to be a common problem. Im meeting with the customer this week and we'll see how interested they really are about moving forward with this project.
should i give some sort of ball park figure and see what their reaction is or just tell them that if they want a detailed estimate it will cost.
ah, the world of the solo remodeler. nonstop fun. don't start thinking of them (or talking to them) like they're a customer until they ARE a customer - which means they've agreed to pay you money for a quality piece of work that you've agreed to produce for them. it's like dating someone. if one person starts talking commitment way too early in the relationship, the other one gets scared off.jeff
If you've done enough similar projects to the one you're about to look at, then you are qualified to give a ballpark estimate. Just be sure you inform them explicitly that the BP is non-binding, and that their actual costs may vary greatly. Remember a ballpark is an average, and an average is just that! My company specializes in a few fields that we've done many jobs within, so giving a ballpark usually means we are within 10% either way of the actual estimate. Beyond my specialties, I don't normally give BP's because I just honestly don't kow for sure what the job will cost me until I run some serious figures.Jason Pharez Construction
Framing & Exterior Remodeling
You're kinda new here. Welcome. This is an old problem. Several threads available if you search. Briefly, no plan = no design. Designer needs to get paid for the product. You determine your worth. Want an estimate? Pick a per sq ft cost.
When I was doing a lot of kitchen remodels my approach was to explain to the prospect that the design was "free" only if I did the job. Otherwise, the design fee was $xxx, in the contract. Did that for many yrs, never lost one or wasted any time. Just need to act professionally.
A lot depends on where your prospects come from. Mine were all referral, makes it very easy. Don't forget to check them out as carefully as you expect to be. If your prospects are from advertising, good luck.
PAHS Designer/Builder- Bury it!
You are going to get a lot of advice from others, but I will chime in first and say that if you have the capability and tools to do design, plot the plans, work with clients to schedule out all the specs, then by all means you should charge for your proposals.
Raymond, you're suffering from newbiism. That's not meant to be an insult, just an observtion.
We've all been there unless we had a good mentor.
Start by evaluating your sales process. Google Jeffrey Gitomer to find a good site with useful sales info.
Learn how to ask what their budget is, during your sales presentation. YOu do make a sales presention don't you?
You've got to sell yourself first, before all the money talk starts.
It's okay to speak in general terms regarding ballpark estimates. For instance, I routinely mention that I can build something for $100 per foot, but immediately mention that it's not unthinkable to double that.
Once you have a budget, you have to decide whether it fits into your ability to meet that. If they are looking for something that isn't even close to reality, you win because you get to cut your losses early.
Many in here will suggest that you get paid to do a proposal. There's already a ton of info in here about that. Do a little research, then come back and re-ask some of those questions.
Better yet, hire a professional salesperson (commission only).
Start by evaluating your sales process ....Good for you, devil,
Process boys, process.
Just like carpentry has a process of steps, sales does as well.
Your job is to know both processes, then while talking with the prospect, inform them about your service and chat about what they want. Generally, the customer/prospect does not know the construction process. That's your role...tell them how it works....first we develop a building concept, draw plans....yada, yada.
During this chat you will use your most powerful tool--THE QUESTION. Ask away, with care, and they should tell you about their ideas, including how much they wish to spend.
Sales rule #1. Don't sell it to em, if they can't afford to buy it.
Rule #2. (see rule one)
BTW....I NEVER guess at a price. My crystal ball broke years ago.
take a sales class at the local collage...the time you spend there will more than cover the time you waste with tire kickers.
take a sales class at the local collage
Peghead, I don't believe I've ever heard that advice mentioned here. Excellent advice!
I wish I would have done that in the early 80's!
blue
thanks for your reply . to answer a couple of your questions
yes i'm new here
yes i went and checked out some of the old threads as well
as far as hiring a salesperson I don't think you read my original letter that well. i'm a one man crew with an occasional helper.
an addition to me is a BIG job. not out of my capability but a big job non the less . I don't get calls for these things all the tim and what sales guy is going to want to hop on board with a small remodeler.
sure as time goes on my business will grow and so won't the size of my crew but for right now I doubt that the sales person is the way to go.
hey I could be wrong who knows. thanks for the reply anyway
what sales guy is going to want to hop on board with a small remodeler?
Ray, there are lots of sales guys that would be interested in selling an addition, if you are the type of guy that can deliver a professional job, in a reasonable amount of time, with a minimum of problems.
Addittions around here can easily approach 100k and beyond. If you're paying a 15% commission, the sales guy might walk away with 15k for a couple of evenings work.
I know, you're going to say, "I can't afford to pay a guy 15k!'. Well, guess what, you're not paying, the client is! If you don't pay yourself that 15%, then you probably shouldn't be out selling!
blue
How do i go about finding such people and how do i weed out the lousy sales guy from the guy who would fit my business well in hopes to create a good future working realatonship. please elaborate how this person is selling me andmy talents to the Ho. I mean I meet with clients now and like to do so . so I can give them a sense of who I am and to make sure they are comfortable with me. A lot of times you are working inside someones homw while they are at work and you need to give them a sense of trust within that first meeting. not mention the sense that you can produce thier project with compintence and professionalism. So once again how does a stranger fill my shoes during the initial sales meeting?
Thanks
How do i go about finding such people and how do i weed out the lousy sales guy from the guy who would fit my business well in hopes to create a good future working realatonship.
Raymond, how do you find anything in life? You seek it.
Up until this moment, you weren't actually thinking about using a professional sales agent. Now you are. You aren't convinced that you need one, but at least your thinking about it. Now, maybe you'll start looking at salepeople differently. Maybe you'll think up a plan that would work for both you and them.
Don't dismiss this idea without going to the Jeffrey Gitomer site. http://www.gitomer.com/
Check it out. learn what/how/why a professional sales person does. Maybe after you learn a little more, you'd learn that you shouldn't be spending two weeks to do a proposal, then send it free to someone.
A professional salesperson would get you at least 2k to do those proposals. At the very least, you should be first selling a set of plans, to do a proposal.
Keep an open mind. I wish someone had told me all this back in the early 80's!
blue
I'll simply throw out a few things that I've said to carpenters who have gone out on their own and are in the same boat.
Oh, one more thing that even catches many experienced contractors. When a client decides to go ahead with the project you need to have a simple contract that locks them up.
Time and time again you'll get pulled along and then out of the blue, perhaps plans are already drawn up and everything seems great, they'll pull out for one reason or another because in their mind there isn't a formal agreement and that makes it ok. Buyers remorse doesn't just hit car buyers--it also kills a lot of remodeling projects. Also, everyone has a friend who has a friend who is the world's best carpenter for cheap, or now that they are about to sink a big chunk of change into the old house someone is selling a larger house that they might like instead.
Every estimate I present has a simple letter of intent on the last page that they need to sign if they want to go ahead. If nothing is formalized other than a sketch on a napkin the letter of intent will say so and simply outlines how the process will continue. Even if the letter isn't legally binding, in their minds they are committing to work with you--and you are committing to work with them.
Each month I hear a GC talk about a good job they have in the bag, it's just a formality that the contract isn't signed yet and that in two weeks when all the subs have their estimates back he'll run a contract over for a signature. What!? Two weeks? Get real. If you don't have a piece of the puzzle nailed down handle that in the construction contract with an allowance, but get that signature. If it's too early for a construction contract get that letter of intent. I'm close enough to 6 small/mid-size GCs to see them collectively lose about $150k of work each year because they aren't using this.
Best of luck, Don
As earlier guys have said, "Been there"
The short answer is budget based:
Free if I can give it over the phone or on the first visit.
Beyond that, they have to retain me. This retainer pays for my time, knowledge, contact for information and plans ready for permit. To retain me, the Owner has to declare a proposed budget.
My professional retainer fees are as follows:
$2,500.00 for small projects up to $15,000.00
$5,000.00 for projects up to $100,000.00
$7,500.00 for projects up to $150,000.00
$10,000.00 for projects beyond. If there is a lot of additional time involved, a per hour consulting fee is usually agreed upon.
The fees are non-refundable and do not apply to the production cost of the project.
You'll find threads upon threads on how to acheive this..........or you can always drop Sonny L. a nice note. He's much more articulate than I am and he's a hell of lot smarter too!
Charge!
I think a lot of your problem starts when the customers are sitting at home thinking 'wonder how much it would cost to get an extra room (or whaever) built on'. At this point they have virtually no idea, but you can be sure that whatever kind of price they think it might be it's going to be lot less than the real price of getting the work done properly.
So, how are they going to find out how much they might have to pay? simple, call you and get you over to spend some time with them, and then they will have their price. After they've recovered from the shock they can either forget the idea completely, or they can try a few other builders to see if they can get it cheaper. Either way, they have no reason to call you back.
In my line I am always going to have to visit once, as some of my best jobs have come from very inauspicious beginnings, but I've learnt to prevent any further waste of time by giving them a ball park figure on the spot and leaving them to mull it over. If the job is too complex for a ball park figure then you need to be looking for some kind of commitment from them, or a retainer or a design fee. If they don't agree then walk away.
John
Edited 9/12/2005 3:48 am ET by john
Sad, but true. How else are they going to know???
Also, the ones that are at that early clueless stage aren't probably interested in waiting the several weeks it takes to do the real estimate. They're trying to quickly get a general sense of orders of magnitude.Rebeccah-------------------------
I think a lot of your problem starts when the customers are sitting at home thinking 'wonder how much it would cost to get an extra room (or whaever) built on'. At this point they have virtually no idea, but you can be sure that whatever kind of price they think it might be it's going to be lot less than the real price of getting the work done properly.So, how are they going to find out how much they might have to pay? simple, call you and get you over to spend some time with them, and then they will have their price. After they've recovered from the shock they can either forget the idea completely, or they can try a few other builders to see if they can get it cheaper. Either way, they have no reason to call you back.In my line I am always going to have to visit once, as some of my best jobs have come from very inauspicious beginnings, but I've learnt to prevent any further waste of time by giving them a ball park figure on the spot and leaving them to mull it over. If the job is too complex for a ball park figure then you need to be looking for some kind of commitment from them, or a retainer or a design fee. If they don't agree then walk away.John
Where I am, no plan = no serious.
I tell those ones that without a plan an accurate price is impossible and it wouldnt be fair to them to take a stab at it. That usually has them agreeing.
I wont waste any time on those. For bathroom refits that I do a lot of, almost every one of them has gone to the bathroom supplies outfit first, chosen what they want, talked to the sales people etc.
Makes my end a whole lot easier.
I tell them when I am on the first visit that I dont do 'quotes'. I show them the info package I put together, tell them what info it has and how they can use it. Then tell them the fee for that service.
So far nobody has declined and it is a really good way to weed out the tirekickers.
I call them after it is all ready and make a time to meet and present it. I tell them it is so I can go over it and make sure everything they want is covered, and that they can ask questions etc.
The last one accepted right off. Score rate is MUCH higher than just mailing it.
Whatever it was.................I didnt do it.
i just got done estimating an 18x24 shed roof addition.i will be doing the foundation,framing, and siding.i drew the pencil sketch plans and did all my own takeoffs.my estimates are precise and detailed i also work out a full cost list so the HO can see exactly where every dollar goes. i will then present this proposal with a list of references and pics of past projects.my estimates are free or else i'd problably be out of work. i would expect the same from another trade.Now for the custom home that i'm estimating i will be making about $2000.00. a 15K project and a 215K project.
RTC
Estimating is harder than building. Especially in renovation or remod work. Ask any builder....
By the time you have gotten to the point where you can prepare a set of plans, a bill of materials, a labour estimate that's not pure fantasy, and a presentation that makes it all hang together, you should be paid for that skill and work.
However, the newspaper classified pages are full of little ads from remodelers and contractors that say in big bold type: Free Estimate. So you're afraid if you try to charge for your estimating skill the potential client will get insulted or laugh in your face.
Let me tell you a secret: if he does, you don't want him as a client anyway. He is a Tire Kicker. He will waste your time, run you around, and 99% chance never buy a single 2x4 from you.
You are supposed to be a professional; professionals charge for what they can do that the client can't or doesn't want to do himself.
You need to charge for anything more involved than a ballpark given on that first visit. If you don't, you are shooting yourself in the foot, long term.
Dinosaur
A day may come when the courage of men fails,when we forsake our friends and break all bonds of fellowship...
But it is not this day.
I could'nt agree with you more. I may have let the last two big job estimates go for freeand got no where, but from here out if you want a detailed real number estimate from me it's going to cost. I think if everyone was on the same page and did the same then HOs would consider it to be a coomon everyday practice and we would have to to stand there and justify why we want to get paid to create a designand estimate for them. the general public thinks nothing of paying lawyers and doctors outragious fees . then why the hell should we be any different. it's all work and it's not for free. period.
Thanks for the input dinosaur.
The fact is, this world comprises many types of personalities. But for the purposes of this discussion, we can divide them into two groups: Short-term planners and long-term planners.
Congenital short term planners are the types of people I want to stay as far away from as humanely possible. I don't want them as customers, and I don't want them as suppliers, either. They spend their lives living from pillar to post, trying to max out each situation right then and there with no thought for future consequences or repercussions. Many consumers are like this: they are the ones who always buy the cheapest possible product that will do.
Many ('way too many) companies are like that, now, too: They are interested only in maximizing profits today no matter what that will cost them in future reputation, goodwill, and sustainability. They spend more R&D dollars on figuring out how to cheapen their product line than on any other single aspect. They are typically run by CEO's who aren't planning to stay with the company as a carreer, but figure on jumping from one high-profile job to another quickly, while the high instant profits they earned for their last company are still showing but the long-term costs haven't yet reared their ugly heads....
Contractors who offer--and HO's who demand--'free estimates' are generally short-term types. Neither cares about the house or its long-term viability. For a quickie contractor of this type, 'Long-term' means 366 days...or 1 day after the statutory guarantee on his work expires, which ever comes first. For the quick-fix HO, long-term means 'will it hold up until I sell this joint?'....
I don't want to deal with people who think this way. Even if they are 'good' people who won't consciously try to cheat me, they will be a PITA to work for because they have a different world vision than I do and there are bound to be misunderstandings that will create friction. I don't need that in my life. I've got enough problems already....
Dinosaur
A day may come when the courage of men fails,when we forsake our friends and break all bonds of fellowship...
But it is not this day.
I liked the bit at the start of your post about long and short term planners, but I want to take issue about where you say that contractors who offer free estimates are usually short term planners. The HO's yes, I get that, but not the contractors who might simply be reacting (correctly or incorrectly) to the market conditions in their working area. Free estimates are not an issue for me in the work I do, because I can give an HO a price pretty much on the spot, what I do doesn't have that many variables. But I do know that any contractor in my area who charged for estimates wouldn't get very far
JohnIf my baby don't love me no more, I know her sister will.
We need to agree on terms, John, before we can disagree on principle.
So, let's start with estimate (n)
What do you call an 'estimate'? You said:
"I can give an HO a price pretty much on the spot, what I do doesn't have that many variables."
Now compare that with what Raymond (the O.P.) said back in post no.1:
"HO has no plans just a pencil sketch for a 16x20 shed roof edition and a composite deck.he just wants a price to frame the shell get it weather tight and he will finish the inside himself. He is dealing with the excavation and foundation. I draw up a basic plan on my computer ... and bring it [to] my lumber supplier for a material take off list and pricing.I work up a price based on the sketch and approximate windows and doors. This process takes about three weeks for me to get done in between going to work all day...."
So, it doesn't look like you and he are talking about the same thing at all.
Sure, I give free ballpark estimates. Pretty much everybody does. But it it's worth exactly what the customer pays for it: nothing. If I tell a guy, "Sir, your re-roof oughta run between eight and twelve grand, depending on what we find when we strip. It could run more than that but it's not likely", what have I just actually said?
It won't be less than $8,000.
That's all I said.
That's all most 'free estimtes' ever say. The difference is, I make sure the HO understands the ballpark is a ballpark, while the guy whose ad screams "FREE ESTIMATES!!" doesn't explain that in any more detail than he absolutely has to. Instead, he sends in a contract with the binding legalese, and hopes the HO will sign based on what he said verbally instead of what's printed on the form.
I explain that if he wants a full breakdown of materials costs plus an estimate of labour, I'll have to do a Design and Cost Analysis for him, which will include a bill of materials, basic design drawings--so we both know we're talking about the same project!--and labour breakdowns. It will also include the terms of my offer. This "DCA" will cost him 3 or 4 hours (or more, depending on what the project is, of course) at $XX.xx per hour.
If the customer is serious, he won't balk. If he's just looking for a price to beat another contractor down with--or so he can figure out how much it will cost him if he does it himself with his BIL--he'll holler and throw me out. Which is fine with me, 'cause I don't wanna get involved in either one of those scenarios anyway.
Dinosaur
A day may come when the courage of men fails,when we forsake our friends and break all bonds of fellowship...
But it is not this day.
Just wanted to give an opinion as a homeowner. We've done some extensive remodeling on two homes, most of it ourselves. There were times we would have liked some professional advice on how to tackle a project, or get some ideas about how to improve something. Under those circumstances, we would have been glad to pay for a pro's time--I'm willing to pay consultation fees for many things. Your experience and knowledge are worth that. There were also times we wanted to know if we could afford to hire someone, and a ballpark estimate would have been welcome--are we talking thousands, tens of thousands, or more??? I hate to make people do a complicated estimate for a project, only to find out it's way out of our price range. A ball park estimate can prevent you and the HO from wasting time.
We are now building a house, and we ran into a Catch-22. We didn't know how much of a house we could afford. No one can do an accurate estimate without plans, but without an estimate, we can't figure out how much house we can afford to design. We understand that interior finishes determine a lot of the cost--but I can get prices for things like countertops and cabinets. It's much much harder to figure out how much the framing will cost, or the electrical, plumbing, etc. I guess my point is that there is no other way to find out how much a house project will cost than to be a "tire kicker", and I would be happy to pay someone for their services in estimating prices--especially if they're doing design work. You should definitely charge for that. If a HO throws a fit about being charged a reasonable fee, you probably don't want to work with them anyways.
jo
Interesting to here from a homeowner's point of view. Too bad most are not like you and would be willing to pay for consultation and or real close ballpark figure.I generlly will give HOs advise on certain things especially if it's something i reallly don't care to tackle . I have given plenty of little tips and tricks to those customers who need to save a buck . it doesn't mean the can do that task the same way i do but I realize that being an HO is expensive, because Im also a homeowner as well. Thank god I can fix, build and repair most things in my own house.
Thanks for the comments.
Try this site for a ballpark estimate. http://www.building-cost.net