Well, I got a call from a potential new customer a couple of weeks ago; a referral from a landscape designer I know. She lives 20-30 minutes away and wants to replace her old masonry front steps with something in wood but needs help designing something because it’s next to a greenhouse. She wants me to come out this week, because that’s when she’ll be down from her summer place in Maine.
I left her a message last Friday indicating that I’d be happy to meet with her, study the situation, kick around some design ideas, and prepare a detailed list of specifications and a firm quote. The fee for this would be $150.
She calls back late Wednesday. I finally get her on the phone mid-day Thursday thinking I’ll meet her Thursday evening. But, no, she says I threw her a curve ball with the $150 fee. Would I still charge her just to come out and talk about it? Yes, I say, this is the new reality in the contracting business. Everyone is very busy now, and while traditionally contractors have given free estimates, we are learning that our design experience is worth something and we are no longer able to give unlimited free estimates.
She said she’ll have to think about it and get back to me. Stay tuned…
Al Mollitor, Sharon MA
Replies
very nice. I always wanted to try that but truth be told I don't make squat unless I get the job.
Greg Werner- Werner Building & Remodeling
Huntingdon PA
Here's the deal...I've got enough work lined up to stay busy for about a year. I got a referral from this guy last summer and I spent about a day with that homeowner coming up with a deck design, visiting the building department in her city to check on set-back requirements, etc., and fighting traffic. Then, I spent another hour or so preparing the proposal. She called back a while later to say she changed her mind. My buddy said, "Yeah, she does that all the time."
I had another case where I spent many hours and at least four visits to come up with a bathroom proposal. Never heard back.
So, from now on, if it's someone I haven't worked for before, and especially if it's not in my hometown, I'm charging for design and consultation services.
Al Mollitor, Sharon MA
Let me know how you make out. I'd love to start charging for estimates. Get rid of the tire kickers and my wasted time.Greg Werner- Werner Building & Remodeling
Huntingdon PA
Right on...and all power to you. It's time we ALL put our foot down and take that stance. When we ALL charge, then we will ALL be considered equally. Remember - there is no lack. Be positive. (Heck - my dentist charges $25 to look for a tooth I point out to her...like, my mouth's the size of a house?)
And a rant on a similar vein - watch out for the guys that are charging too little. A quiet word in their ear....No need to do like a local drywaller and beat up the competition, just say things like "You know, you deserve to charge more - you are worth it". Or worst case "By charging so little you are not doing anybody any favours - including yourself". I've had to do it a few times. In fact I've often said to helpers/subbies "that's not enough, I'll pay you $xx more per hour"cheers
***I'm a contractor - but I'm trying to go straight!***
Tell her you know one in Maine who might charge her $250 or more.
;)
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Taunton University of Knowledge FHB Campus at Breaktime.
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Can you get away with charging for the first visit?
I usually don't, but because I am a known quantity, I get it when I ask it.My last new contact was in late Septy 04. It was on a referall and I knew ahead of time I was the "one". At the first meeting to discuss concepts and future sceduling, I asked for a deposit. expecting to name two grand, ands expecting to wait a week for check in the mail. Before I could get that specific about numbers, he asked, is twenty thousand enough? as he was whipping out the checkbook.But I finds, in reference to the situations Mongo has portrayed, that the best use of this depsit or consulttation fee, is that it weeds out the lookielous that waste my time.
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
But that was AT the first meeting, not to show up for the first meeting.It was not clear to me if MoJo said to here;"I will require $150 to show up and for that I will do the design" or "I will come out and discuss this, but I will require $150 before I can do the design".
The initial fee was to cover my visit, dicussion of design options, a detailed list of specifications and a firm quote. She could then hire me, or use that information as a starting point for discussions with other contractors. I did not regard this as refundable if I got the job or as an initial deposit. I feel this information has its own value.
I don't think of this as bidding on a job. If she had her own drawings and knew exactly what she wanted, I don't feel an initial fee was justifiable. In this case, she needed someone's expertise just to get started. That's what she would have been paying for.
Al Mollitor, Sharon MA
"I don't think of this as bidding on a job. "But you titled it as "Charging For Estimates - Trying It"As a HO I don't have a problem with paying for something where I get some potentional value of it, whether I use it or not and how is upto me, such as"dicussion of design options, a detailed list of specifications and a firm quote. She could then hire me, or use that information as a starting point for discussions with other contractors."What I do have problem with is paying when I have no idea if I want to work with you are not.I would not want to be commited to paying it after you showed up I realized that we could not work together, for any reason.Likewise, as you put it, I think that if she agreed to the $150 then you would be obligated to provide that amount of work even if you realized that the you where not a match for the job and that working with her would be a PITA to put it mildly.Really is really two distinct operations here, 1) qualifying each other - that includes personalities, type of job, ablility to pay, quality and type of work. 2) Design and estiamting.I realize that with a project a of this size that there is not much "overhead" to have 2 clear phase like you might with a kitchen or additon and where the design fee might be $k or more.But I wonder what would have happend if instead you had said.Yes I would like to meet with you and look at the scope of the project. But if it is a project we can work on together it will cost $150 for me to do the design and costing.
Good points, Bill. I may have been a bit too much of a harda$$ about it. She did ask if would would charge her "just to come out and talk about it." That would have been a good opportunity to get to know each other and decide if the project was appropriate for me. Clearly, I need to work on this new business of charging for proposals. Surly, if the project was closer to home and I didn't have more work than I can do, I would have been more eager to take a quick look.
Al Mollitor, Sharon MA
Hi, I would like a price for a deck.
Great, how did you get my name ?
The Yellow Pages.
Click.
Hi, I would like a price for a deck.
Great, how did you get my name ?
A former customer of yours referred you.
Great, do you want me to do the work ?
Well, maybe, it depends on the price.
Are you getting other prices ?
Why, yes, 2 or 3 others, if they ever get back to me.
I'm really busy right now working for people that are familiar with our work, and I generally charge a fee for writing proposals.
Click. (homeowner)
Hi, I would like a price for a deck.
Great, how did you get my name ?
A former customer of yours referred you.
Great, do you want us to do the work ?
Well, maybe, it depends if the other contractors I called get back to me.
Did all of your friends recommend all of these other contractors ?
No, I got their names from the Yellow Pages.
Have you seen my work at your friend's house ?
Yes.
Did you like it ?
Yes. I was impressed.
Great, then why are you cold calling contractors out of the Yellow Pages when you have a quality contractor at your disposal who has competitive pricing ?
Uhhhh.
When you decide that you want us to build your deck, I will come to your house, meet with you, do a design and provide you with a written proposal. I charge a fee for these services because I am a professional. The fee is of course waived when we perform the work.
I have a million of these. If somebody buys me a beer, I'll type all night.
carpenter in transition
"I have a million of these. If somebody buys me a beer, I'll type all night."
Send me your address and I will mail you two. I drink from bottles so I am unsure as to their condition when they get there but I like your phone conversations. DanT
C'mon, even Lowes charges for estimates. I like to meet with the customer and screen them. Sell myself. Then they would pay the fee. Of course the phone conversation is the first screen.
I also think that a smaller fee will deter the tire kickers. $150 is a little steep. Not for a house estimate or something of that nature. Even $25 will deter those not truly interested.
i'm thirsty, so I sent you an email but it didn't go through
are you teasing me ?
carpenter in transition
[email protected]. Drop the one and you got it! DanT
Well put. I go and meet potential customers and discuss the project and maybe even suggest a few ideas and then explain that there is a fee for the design( i do hourly billing for plans) and give them the option of paying and keeping the plans or using me and the plans and have the bill for designing applied to the job
lol... But what I want to know is, why are you in the phone book?
i'll just say:
"you can't not be in the phone book."
you just don't need a full page ad unless you are a personal injury lawyer
and even then...........
but i'm sure they have their own place to bitch.
"Brieftime"
carpenter in transition
That is EXACTLY the kind of job where HOs are likely to pick you brain for free, taking your advice to DIY or to hire Junior Jackleg at a reduced rate
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
When it comes to things such as carports and garage additions (that we do so frequently) I normally give them a ballpark price over the phone or upon first visit. The ballpark is necessarily higher than the expected cost to cover my butt against those unscrupulous clients who see a verbal ballpark as a binding contract.
If a client wishes to get a firm price, I charge $300-500 to give them a set of plans and a labor/materials quote from me--I call this a design contract. They can either choose me to do the construction or take my plans to another builder; I've made easy money for half a day's work, and I keep the copyright for the plans. Normally, though, if a client hires me to draft prints then I also build the plan.
I normally do estimates for free if I know it will take me less than an hour...if it's a big job, I do plan B above.Jason Pharez Construction
Framing & Exterior Remodeling
"the fee gets taken off the top if you get the job"
I have been following with great interest all the "charge for estimates" threads that come along, and the above is a commonly expressed sentiment.
Since all of my time (cost of doing business) must be paid for, all estimates must be paid for, either as overhead or as job specific costs.
Charging for estimates puts the cost into the job costs category, which is where I think it should be, but then to rebate it puts it back into O/H, unless I add the fee into the estimate total before I rebate it.
I am not talking about SCA's or design work, neither of which will ever be free by me, nor am I talking about "easy" estimates of common assemblys like three-tab roofing or common decks, but, only simple (few line items) proposals which wouldn't be of much help to a competitor.
The main reason I prefer to charge for estimates is the it reduces my customers costs. If I close 25% of sales (yeah, right) and an estimate for a medium project takes an average of 10 hours at a labor burden of $60/hr, the cost of estimating is $2400 per sale. That cost MUST be added to my clients cost. At least 3/4 of that cost was NOT generated by my clients job.
Add to that, the fact that charging increases the closing ratio and decreases sales time, the savings to my clients is significant.
I think the case for charging a nominal fee is airtight in any situation where; 1] The chance of not making the sale are high, and 2] The estimate takes considerable time.
At last, my observation. The ethics of rebating the charge. The cost of rebates must be added to O/H. That means that if I rebate the fee, I must add the fee back into the final bill.
How can I say that I am rebating the fee if I add it back into the bottom line?
SamT
sam.... you can't ..
it's intellectually dishonest... i'm often tempted to do it ..just to intice them... but .. really .. if anyone thinks about it.. how can you rebate something you've already spent ... your time ?
so.. no.. i don't give it back if we get the job Mike Smith Rhode Island : Design / Build / Repair / Restore
and don't forget you have a grandson to support!! ( not to mention freeloaders )http://www.quittintime.com
almost forgot..... ( not ! )..
http://forums.taunton.com/tp-breaktime/messages?msg=53985.65Mike Smith Rhode Island : Design / Build / Repair / Restore
Good explanation! I wanted to slap some sense into somebody when i read that line about rebates. What I earned - I earned! No giving it back again.
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
so do any of you charge just to show up and look?I have been trying to weed out the stuff I don't want over the phone, but wouldn't mind another line of defense so to speak.$35 to come out for a consult?thanks in advance
so do any of you charge just to show up and look?
Yeah, but not most of the time. The ones I tell I am going to charge for the first visit are the ones calling for insurance work. There is a flat 3-hour charge just to go see them, 50% of which comes off the bill if they give me the work. I provide a written estimate for that which is overprinted in BIG letters ESTIMATE ESTIMATE ESTIMATE ESTIMATE.... This to prevent them from submitting it to the ins. co. as a bill, collecting the dough, and doing the job themselves....
Usually if a cold-caller survives the phone screening I go out and give them a freebie walkthrough and a non-binding, verbal ballpark with a range of 70-150%.All based on T&M, of course. If they want more precise info than that, or if there are extensive design issues involved, it becomes hourly right from that point.
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.
"But that was AT the first meeting, not to show up for the first meeting."I'm pretty sure that I was clear that IU knew going in that I was as shoe-in for the job. Cold calls get the response that I need money up front for my time, mopre so now than ten years ago when I was newer and more willing to spin my wheels wasting time to get jobs.Pre-qualifying clients is as much instinct as anything else. That takes experience reading people to cultivate
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
In the early 70's I spent some time as a project manager for a large timber/wood products manufacturing firm.
The economy got real tight for awhile (about 1974-1976 ) and my boss came up with the idea of requiring a non-returnable fee for bidders on construction projects.
The Mechanical firms we were hiring were hungry enough that they were willing to pay the fee (sometimes, depending on the project, $5K or more). I thought it was C.S. then and I think it's C.S. now to charge for an initial consult/project review, etc.
I know it's popular and works among some of the folks here, but, in my area, to respond to a cold call from a potential customer by setting an initial fee up front would be a deal killer.
We've been enjoying a long-running boom in housing, but it won't last forever and some of these little deals like charging for estimates will go by the wayside.
I just factor it into the overhead on my bids....
I think the amount you asked for was well chosen, she knew what her commitment was at the outset, it was enough to discourage timewasters without being too high and would seem to have done the job this time.
Well done, and I'm sure you'll be back to tell us if she does come back to you. But if $150 is too much for her then you will have saved several hours of your valuable time
John
What about making the consulting fee part of the contract (another way of calling it a deposit). "You hire me and the $150 comes off the bill. If not Then I keep your $150"
Especially as they may like your plan better but get some CHEEP bugger to "Throw" it together.
"Sir! You are drunk!"
"Madam! You are ugly, and tomorrow I shall be sober!!" Winston Churchill
Got to make sure that you let 'em know - the fee gets taken off the top if you get the job, otherwise you keep it.
I don't get too many tire-kickers in my business, but the ones who call just asking for a price get a wise-a** on the phone. I had one yahoo call and ask me for a price on a septic design and then have the cojones to ask me who else in the area did septic design work. I hung up on 'em.
Jon
I was discussing something like this with a customer - has an engineering firm - who said that it was normal to get only 10% of the jobs bid on. Presumably the work his company did do was sufficiently well-paid for him to have a 2nd home here, amongst other things. (And, although this has no bearing upon the thread, I thought l'd add that he said "In engineering we work to tolerances of 5/1000". I wasn't having that, so I replied"I do it exactly" :)
cheers
***I'm a contractor - but I'm trying to go straight!***
Tolerance? Only hacks need tolerances!
I'm seeing another gimmick lately in southern Va. Now, everyone is charging a "trip charge". The numbers range from $25 - 40 per. I got pissed when the local handyman (no license, no insurance, part time city worker) wanted $25 to look, $25 for another "trip" because he had to drive back to town for a faucet, then got $50 for the 20 minute faucet install. (That's what happens when you're 500 miles away.)
So, he got $100 for how much time?
David - In my book, a half hour. It's not my responsibility to pay for his drive time.
The house is a rental and he's the handiman for my broker. She said she caught him doing the double billing thing on every house she was sending him to. I don't know what he gets per hour as a laborer working for the municipality, but it sure isn't anywhere near what he makes on stuff like this.
Don
OK... if he's double-billing and cheating people, beat the snot out of him.
But, the "$100 for a half hour" isn't the fair way to look at his enterprise. How many hours does he put in during a calendar year relative to the actual production hours he does? Does he assume any risk? My business consumes quite a bit of 'desk' time, and if I wanted to do 2000 hours of production during a year I'd have to work between 2500 and 3000 hours.
Dave-
It's not a question of going after him. It's a question of fairness. I am very familiar with downtime, risk, etc. The guy is a laborer - shovel pusher for a small town. He does these jobs either when he can get away or his spare time. That's not really my concern/issue. He is not a licensed contractor/builder/plumber or electrician. He doesn't carry any supplies for anything, and he's got a captive clientelle from the broker. Where's the risk? Broker calls him and says - x house has a bad faucet. He drives over and looks at it, then goes out and buys supplies, then comes back to fix it (hopefully) and charges for the trip and the work. If the house burns down or floods because of him, there's no insurance on his end. He has no risk. I also don't believe his skills are worth the charges. I can hire an experienced guy for $100/day. Why should I pay the extra? He doesn't have any overhead.
I know he started getting it because many of the other (licensed) electricians and plumbers started to charge this too. They are in a different league so to speak. A plumber will show up with a faucet and tools on the truck, ready to go.
To me, this is his overhead - not my responsibility. I don't charge separately for my overhead now, never have and probably never will. In one of my other lives, I was a lawyer - handled a lot of construction cases. People would routinely come in for meetings, to go over cases they might give to me. Most meetings would take 1-2 hours. Sometimes I did research afterwards. In 14 years, I didn't charge a consultation fee more than twice. That was time that I wrote off if I didn't get or take the case.
I see it more like a value added situation. Is the client/customer directly benefited by the effort? I don't think preparing an estimate benefits anyone, unless it's a design situation with drawings/ideas, etc. That's different. If the time is for the seller to decide if he can/should/will take the job or to decide what supplies he needs, and to price it out, you can't drop that on my shoulders.
>>> I don't think preparing an estimate benefits anyone...
Following this thread with great interest, and can see most of your points Hammerlaw, but this one makes no sense to me at all. If absolutely no benefit to anyone, then why ask for it (by the customer) and why do it and incur the cost (for the contractor)? I've had "prospects" who were only interested in a "number" never mind the details, needless to say, they screened themselves out on their own.
Well, there needs to be a meeting of the minds on price if the parties are going to go forward, so the Ker needs to give a price. You seem to feel that there's a benefit to the owner by receiving that price. If they are comparison shopping, maybe they will use that number to narrow down the scope of people that they might use. If they are going to use your number to chisel with the competition, then maybe there is some benefit and you have a point.
My experience is that unless there is a connection between the two, the estimate becomes just another piece of paper in the file. If you come to me and (keep it simple) look at my job, then give me your estimate of $5,000 to build my deck, how am I benefitted by that quote? It doesn't get the job done, and doesn't even get me closer to getting the job done. It may get you closer to getting a job, but that doesn't help me at all. The situation changes somewhat as the parties add to it, if the Ker starts to offer suggestions, etc.
If you go in to a dealer to buy a new truck and the salesman tells you he's going to charge you for the quote, what are you going to do? Do you see a benefit to you as a potential buyer? He can argue that he spent time with you, wrote it up nice and pretty, maybe even talked to his boss, but do you feel like you should pay for him to give you the number? To me, that is part of his job, like the grocer, to tell you what it costs.
How much did you pay to have the faucet installed ?
Are you comparing the estimator in a GC firm to a car salesman ?
What exactly do you do for a living ?
carpenter in transition
It's not the cost of the faucet install that gripes me, it's the fact that he wants me to pay him $50.00 to drive around.
No, I am pointing out that salesmen in general spend time with customers before they can close a sale. Most salesmen do not charge for or get paid separately for that time whether they close it or not. (By the way, where did the "estimator in gc firm" come from? That wasn't the way I was reading any of this. )
What business am I in? I don't see that it makes a difference, but most recently, I've been doing roofing, siding, windows and renovations for customers. I'm also converting a 2100 sq. foot church in Virginia into a private residence (rental or resale is up in the air), and renovating another building in New York. I have some rental properties that I am involved with (in VA). One or two days a month, I deal with small legal matters for clients as I am wiping out the last of the files from my practice, mostly handling construction litigation for the last 15 years.
Re: Your handyman adventuresThe first thing I noticed when you brought this up is you are going through a broker. Shouldn't you be complaining about her and not the guy who does the work?Secondly, is $100 reasonable to change a faucet? Why are you focusing on how the bill was calculated?Thirdly, you mentioned that you could hire an "experienced guy" for $100 a day. What do you pay, $9/hr.?You are making a lot of statements that are incongruous.
Jon Blakemore RappahannockINC.com Fredericksburg, VA
I was gonna say... I can hire an experienced plumber for about $480 per day!
Jon -
Houses are in Virginia - somewhat southwest of you, by the Kerr Reservoir on the NC border. It's an agricultural area, still lots of tobacco growers. The pay scale down there is pretty cheap. I've used a few people to do work and can tell you that there are plenty who would be happy to earn $125/day. $100/day is considered normal for guys working for day's pay. I didn't set the scale - that's what it is. So, the answer to the question what do I pay - $12.50/hr for this kind of small stuff.
Is $100 reasonable to change a faucet? Under those circumstances, where it was done a few weeks ago for half that number, No. When I can get somebody else to do it for half that number tomorrow, No. One of the guys that I've used was a handyman for a four building multiple unit apartment building. He's experienced, has tools etc. He would be happy to get $50 for an hour's work. I've spent the time before twisted upside down with a basin wrench doing them, so in some circumstances, yes it's worth $100 and then some.
Do I have a gripe with the broker? Let's just say I will be talking to her about the subject. I have a lot of respect for her but do not always agree with everything that is done. But she is not the one getting paid the trip charge.
I'm not sure where the incongruity is. I see the trip charge as an artificial charge unnecessary under the circumstances. If you have to make $200/day, then say so. I either pay it or not. If you were working yesterday for $100, and others are still working for $100, chances are I'll shake your hand and wish you luck. But don't play a game and nickle and dime me with this charge and that one.
Do you charge your customers to drive to their house? No disrespect intended, but I doubt it. That's portal to portal billing and other than some union workers, I don't know too many people that can warrant that kind of billing.
This is not about the money (everybody says that, I know). Last year, I had the metal roof painted on a house. One of the guys had calculated a price based on day's pay. I gave him 50% more than he asked for specifically because it was roof work. He screwed up, couldn't finish the job himself and had to pay somebody the balance of he was owed to do it for him. I met the guy I contracted with afterward and gave him a tip. I try to be fair and do the right thing.
Last thing, if you are going to charge for the trip, or for the estimate, you might want to think about how much the extra couple of bucks could damage your business. Say you go into a restaurant and walk out unhappy. You pay the bill, then what? Most people badmouth the place to all their friends and neighbors. How does that help business? Is it really worth the extra few bucks that you collect up front?
I didn't realize my point of view was going to be so controversial. My apologies to MoJo for the diversions...
Hammerlaw,
I'm NOT addressing the 'plumber' you hired, just your take on charging for estimates.
I'm going to be working 2000 hrs a year. Of that only 800 will be on site. Of the 1200 left, 400 will be running back amd forth to town for supplies, 200 going to clients homes for sale calls, and 400 preparing 'estimates'. The balance will be for office work.
What part should I do for free and how do I feed my family if I work for free?
Who should pay for the time I spend doing 'estimates?'
If I can reduce the number of 'estimates' I create, will that save those paying for my time any money?
If I give 10 free 'estimates' for each 4 jobs I sell then my clients are paying for 2 1/2 'estimates.'
If I charge and create 10 'estimates' for each 6 jobs I sell, my clients are paying for 1 'estimate.'
BTW, I don't charge for estimates, I give them away for free as I only spend about 15 seconds working on them.
I charge for creating material lists and costs, project flows and times, manpower requirements and scheduling, and, subcontractor negotiations and brokering, all of which must be thought about in order to determine the final cost to the client
"Fail to plan, plan to fail."
However, I don't believe in charging for simple proposals like common roofing, common decking, normal plumbing, simple decks.
http://www.businesslink.gov.uk/bdotg/action/detail?type=RESOURCES&itemId=1073792180A [Proposal]is a fixed price offer that can't be changed once accepted by the customer. This holds true even if you have to carry out much more work than you expected. If you think this is likely to happen, it makes more sense to give an estimate. You can also specify in the [proposal] precisely what it covers, and that variations outside of this will be subject to additional charges.
An estimate is an educated guess at what a job may cost - but it isn't binding on you. To take account of possible unforeseen developments, you should provide several estimates based on various circumstances, including the worst-case scenario. This will prevent your customer from being surprised by the costs.
SamT
Sam - I'm going to have to respond a little later. I've spent way too much time i/f/o this machine today. (It's a conspiracy to drive me nuts...I'm sure of it.) But, after looking at the definitions you offered, I went back to the top of the thread. it says "Charging For Estimates - Trying It." The first 4 or 5 posters also talk about "estimates". So maybe that's part of the problem. Don
don... the casual use of the term "estimates" is, in fact , a large part of the problem..
people don't want "estimates".. they just think they do.. what they want is a price..
we don't give estimates..
if i were a Specialty Trade.. i might give free Proposals... the free proposals that i get from my trusted subs don't take them much time... and we havea history... and they know who they are dealing with... me
but.. as a GC and Remodeler...
we prepare Proposals.. and about 75% of the time we charge for the Proposal.. that is not for design work.. we ALWAYS charge for design work
we qualify our contact on the phone.. or we try to... if they pre-qualify.. we go to a free meeting.. we present ourselves.. we listen to the contact's request... we show examples of our work..
depending on the scope.. and our feel for the situation.. we state the terms for preparing our Proposal.. it might be $100... it might be $3000...
it might be no charge... but i usually regret the "no charge " ones... i've usually been fooled...
recent example.. got a call for a skylight.. prequalified the caller.. wanted a skylight installed in his mother's house.. electric operator.. etc.. sounded like a nice profitable job..
he called several times during our busy spring season.. i finally made an appointment to go to the job..
when i got there .. "Mom" explained that she wanted a skylight in her bathroom..
it was close to the valley , but it looked like it could be done.. Mom explained that her previous builder had told her it couldn't be done.. i knew the guy.. and i knew him to be reputable..
i went up in the trussed attic.. the bathroom area was trussed and overframed with the intersecting roof.. it also had the entire Air Handling equipment competely covering the bathroom.. in short.. if there was ONE place in the house where she couldn't put a skylight.. this was it..
total waste of time ? .. 1 hour in phone calls..... two hours in site visit... 3 hours gone from my life that i will never get back.... what was the contact hiding from me ? that a reputable builder had already looked at the job...
if the contact is a previous customer.. i will sometimes do a Proposal at no charge..
but not usually... and since it's all about sales anyways... if i can't sell the preparation of the Proposal.. i probably can't sell the job either..
most people who give free estimates do not sell jobs... they buy them..
Mike Smith Rhode Island : Design / Build / Repair / Restore
Mike - Sorry I never responded to your post. Somehow, I wasn't notified of it, and I jumped it when I went to Tim's. I understand where you are coming from, and language and customer quality is real important. Your system works for you. Great. Don
Several things struck me as incongruous. For instance:You can "hire" someone for $100 a day, you see no need to pay for someone's overhead, making comparisons between a consultation for an large-scale addition and a legal matter that takes place at the lawyers office, etc.I was planning on replying to the "Do you charge your customers to drive to their house?" comment but I see SamT already did a fine job. Obviously the answer is yes, I may not charge them outright but they pay for it one way or another (or I don't get paid).The fact of the matter is a lot of people are tired of giving up time for nothing. Earlier you mentioned that we live in an information driven society. Plenty of contractors are willing to give a lot of information away for free but there are an increasing number who realize the value of their thoughts, words, and concepts and they ascribe value to that information exchange.
Jon Blakemore RappahannockINC.com Fredericksburg, VA
Do you think he should drive around and pick up your faucet for free ? Do you think he should only be paid for the time he is actually installing the faucet ? At your rate of $12.50 an hour, his 20 minute job (for a faucet change, that's pretty speedy) was only worth $4.25. When you perform work for someone, do you pick up their materials for free, on your own time ?
Don't get me wrong, I understand your frustration of the $25 charge for showing up, but around where I am, service charge fees like this have been a way of life for 20 years. I understand he is on his own, but from my perspective, your faucet cost a third of what I would have to pay to have the same thing done.
The majority of the people posting on this board are construction business owners that wear many hats. They are owners / estimators / salespeople all rolled into one. That was the basis of my question when you essentially compared a car salesman's work to the estimating and sales work that we do. I take this as an insult. Wouldn't my life be grand if all of the options ("only a fixed number are available, sir") for buildings were priced by someone else and then typed into a book that I could just refer to any time someone wanted a kitchen remodel ? How long do you think it takes to price a car ? Well, I just did it myself on a Toyota website, three minutes flat. Do you think the car salesman does something different than I just did ? Something that might require years of experience ? The majority of their training is spent on how not to let a customer leave the building. I really ought to consider a career change since I could save a lot of time boning up on ADA guidelines and the latest BOCA codes and how they might affect all of the pricing I do.
As far as what you do, it does make a difference. If you were the average homeowner posting statements here that there is no cost benefit to you for paying for an estimate, I wouldn't have bothered to respond to your post. I fight this battle every day at work and I don't need to do it here with a homeowner.
I like to encourage other professionals here to consider charging for their proposals because I know the system works. You walk a fine line when you do it. You don't do it all the time. But when you do use this method and it works, you realize that you are using every skill you have ever learned in life and it is incredibly gratifying. And as Sonny has said, it helps to get you home to the kids at a reasonable hour.
every time I see FREE ESTIMATES on the side of a pick-up truck, I just laugh and laugh and laugh...........
carpenter in transition
The horse is pretty much dead, but We can beat it a couple more shots...
You ask if I pick up materials for customers on my own time, for free? Yes, regularly. Sometimes I even go with the customer to pick the materials out, or to pick them up or to see another house that they want to show me as an example - all for free.
On the issue of the faucet install for $4.00 I never said I expected the man to put in the faucet for 10.00. Did I say that I even expected him to charge me the hourly rate? No. Someone else asked about what the costs were (what do I pay per hour) and I told them what guys are charging for this type of small work. You say that you understand my frustration but charges like that have been routine in your area for a while. Sorry to hear that. They are new to that part of town and new to me. You say you pay three times what I did for the same work. I don't know whether that's $150 or $300. I don't think that proves much of anything. Costs are likely higher where you are, and you probably use a licensed company. If you got under there and unscrewed the thing yourself, you could save some money. You choose to pay it. I prefer not to.
As far as you being insulted by what you saw as an unfair comparison with car dealers, sorry. I pointed out that car salespeople spend time with customers, go over a myriad of details from financing, to warranties, to handling, comparisons with other cars - maybe several on the lot. Whatever. You don't like the comparison? You pick the example - real estate salespeople spend lots of time with clients. Some deals work, some don't. You are certainly not an ignorant man and you understand this as well as I do. The subject here is obviously a sensitive one to people based on the length of the thread and the posts. Fortunately or unfortunately, once a subject is opened, it's opened. I could have sat on the sidelines or agreed that charging for an estimate was a great idea. Maybe everybody would have been happier. But the fact of the matter is that there is another point of view. Others have alluded to it, saying they can't do it. For whatever reason, I got more into the middle of it.
As far as the people on this site that might have opinions, or might gain something from the opportunity to charge for estimates, I've seen the gamut - suppliers, material men, general contractors, commercial contractors, small and solo crews, designers, etc. I doubt that any of the commercial contractors are going to charge for estimates and get away with it. I doubt subs will either. Lumber yards routinely do take offs for free. I've worked with a bunch of them and I have never seen a design firm (architect or engineer) pay for an estimate. Actually, the practice that I've seen is for bidders to pay them for the drawings. The only ones that I think are most likely to seriously consider charging for estimates are those dealing with homeowners. If they are capable of collecting for this service, so be it. Collect the money, spend it, have a party. I didn't say it made you a bad person. I just don't think people are ready to pay for it. I think it can hurt a business too. I don't do it and I don't think this will change. Life goes on for all of us.
a real estate salesperson ?
wow
nice chatting with you Don
carpenter in transition
Tim - It looks like we won't agree on this one. Maybe next time.
Don
and so it goes.......
have a safe holiday.
best.
tim
carpenter in transition
Edited 7/1/2005 11:17 am ET by TIM_KLINE
Charging for a detailed quote means the customer ( you ) gets a lot of valuable information that you can use at any time.
Things like, wet wall linings and the warrantee that goes with them IF they are installed correctly. Cos of the info you now know that there IS a warrantee and what the installation proceedure should be.
Then along comes Mr Hack to give a free estimate. With your new knowledge you ask about warrantee and correct installation........Hack says 'Huh?' or, ' Oh, thats not necessary, you dont need that'.
You decide not to employ Mr Hack and get the job done right. The 100 bucks spent on the professional quote just saved you thousands in repairs to the 2nd clowns 'work'.
I tell people all the time that I only used quality, approved materials. The whopping 'extra' cost involved for the most part is $100. A hundred bucks in a 6k job. Nobody has ever once complained about it once they knew why it is required.
I looked at one a little while ago, gave a ballpark......all good. Gave a rough time on a start date......all good.
Called last night to make a time to drop off the quote and go over it................they had changed their minds and had downsized the scope of the job.
No phone call, no thanks for the time spent, nothing.
That is the LAST TIME!!!
From now on, Look at the job and give ballpark.....free.
Tell them the charge for detailed proposal. If they choke, I walk.
If they pay and then change their minds, I dont care cos my time has been paid for. They can change their minds a million times if they want so long as they dont do it on MY time.
Everything, 100% of it, depends on how you look at it.
DW
AJ- Your example is different from mine. I made it a point to say that if the Ker brings something to the table, then there is a benefit to the customer. Charging for the estimate there is more understandable. (I still think it's overhead in most situations. If you are spending/wasting that much time doing estimates, I think something may be wrong with the picture anyway. ) You talk about warranty info and installation info. I do not consider installation stuff as material that belongs in an Estimate, but if it's in there, you may have given the customer something. He or she may already know some technical stuff too, in which case you may not. The depends on how much homework they've done.
I understand what it is to waste time on a customer. It's not pleasant at best and can be downright annoying. I understand what it is to feel like you educated someone and get nothing out of it. I understand that some people take advantage of you. I think there's a certain amount of that whenever you deal with the public. I don't see it being limited to the construction trades - it happens everywhere. We live in an information society. Some people do their own research, some get it from others. Some people will pay an architect or engineer, others will try to get the information in other ways - like this site. I've read the threads where people take a set of drawings from one guy to bid it out with somebody else. I've also seen people who said they purposely put incomplete info in to make sure that can't happen.
I am not talking about designing or redesigning the job. I am talking about giving a customer a price. To me, that's part of the job.
As far as your situation with the people that changed their mind, why not use a written contract and/or get a deposit to lock in the time slot? There are plenty of people here that demand it. Better luck on the next one.
Nobody here will sign a contract and pay a deposit until they know what a fixed ( as much as possible anyway ) cost will be.
These people were OK with the ballpark. That number was in the 5 to 6k bracket. It ended up being $6400. For all I know that may have been 600 more than they were able or willing to pay.
By charging for the quote, my time isnt wasted. After that I dont care how many times they change their minds.
Everything, 100% of it, depends on how you look at it.
DW
For me the first visit is on my dime. If the client wants to move forward I collect an initial deposit. Looking at it from the HO's perspective, what if he agrees over the phone to pay the $150 and some obvious clown shows up?
I think you first need to present yourself in a professional manner in person. Exchange a few pleasantry's THEN talk about the process of engaging in a business relationship.
First impressions go a long way.
I work for a General Contractor that builds large custom residential homes. We start the process by providing a LOO (Letter of Opinion) based on preliminary plans. We hope to do this at schematic stage to help the designers stay close to client's budget.
The LOO is developed by doing preliminary square footage takeoffs. Three or four people look at the plans independently (15-30 minutes) and develop an initial square footage cost. The LOO is a one page document expressing the cost in a range. If we have worked with the client or architect previously we might take it one step further and create a line item LOO. This would use the number generated and spread it through our cost codes by historical percentages. We estimate a schedule in months. We then pick a few codes (such as supervision, concrete and framing) and look at them more closely. For example we would look at the amount for supervision and compare it to our monthly cost against the expected duration of the project. If the number is close to our line item LOO we move forward and look at the next phase code. We might examine 8-10 phase codes.
We then meet with architect and client and discuss our LOO. At this point we would provide a LOI (Letter of Intent) and ask for a deposit. This document states that we will provide a certain amount of estimating and value engineering for free as part of our contract. This is provided for free as long as the clients sign our final contract. If the clients do not sign our construction contract the LOI agreement states that we are paid our estimating expenses.
Long story short, we provide a LOO (approx. 6-8 hours of work) for free. If they ask us to move forward and do a full blown estimate (typically a 1-2 month process) we ask them to sign a contract (LOI) that states we will be paid for the estimate if we do not move forward into contract.
Owen Roberts Group
10634 East Riverside Drive # 100
Bothell, WA 98011
Office (425) 483-0234
Fax (425) 481-0299
Cell (425) 273-6624
http://www.owenrobertsgroup.com
Edited 6/20/2005 3:38 pm ET by Adam Greisz
Edited 6/20/2005 8:00 pm ET by Adam Greisz
Dear MojoMan:
Rock on man. People just don't understand how difficult it is to come up with designs. Furthermore, the skills necessary to turn those designs into fruition. Plus it takes a lot of time and effort to develop the skills to design projects in the first place. Would people not expect to pay a "professional" designer for their services? NO! They would gladly pay for the service. So why shouldn't we get paid for the same service. Don't stop charging man, we will get ours in the end.
My very first set of business cards as a young man said " Free Estimates". An oldtimer who i filled in for when i was slow pointed out that no estimates were "Free" and he was right. When you add up all the hours they were costing me a fortune.
Too mnay homeowners will have a small guy out to " get a feel for what it will cost". Some will know right away they can't afford it and cut it short. Others will let you do a very detailed proposal with all the research and everything and then tell you they can't afford what they want.
If I were to go back into business I might do the initial visit for free but anything above that would cost.
Most of us simply do not understand the mindset of the buying process, and that includes the buying process of every single one of us here.When one of us decides to buy a new truck, van , table saw, recip saw, big screen TV, side by side refrigerator, Ford Escort, Corvette or Mercedes convertible, we all have a pretty good idea of it’s price. And we have all “learned†that pretty good idea from seeing advertising on TV, magazines, or newspapers. Not so for the John Q. Public who decides to remodel a kitchen or bath, add a deck or addition, have new siding installed or all of their windows replaced. Ditto for a new roof, new fascia and soffit, or even just having a new overhead garage door changed including a new door operator.Unless we have lived in a jungle for our entire lives, we also all know that there are many types of people, shrewd, vicious, users, those who deceive, liars, and at the other extreme, those wo are saints. Knowing the above, what is the very first thing one must do as a qualifier of a potential customer? You must become that TV, newspaper, or magazine and give then a price. Obviously you cannot give them an exact accurate price, so what’s the next best thing? A “ball park.â€Why in the world would anyone spend any more than just a few minutes in their home to determine the general scope of work and then immediately qualify them with a ball park price? Now if that ball park price is in the area they expected, what is the next thing they will ask for? What they call an “estimateâ€, and unfortunately what most of us erroneously call an “estimate.†What they really want is a detailed Proposal listing all specifications, brand names, possibly a set of scale drawings, etc. And without realizing that the above do not come as a result of snapping our fingers. So your next task during this sales process is to show them what they are asking for - sample copies of a previous job. And yes! It does take cahones to ask for a fee for what you are above to prepare for them. And also Yes! It’s called being a businessman!Explain to the what is entailed including the many hours to arrive at what they want in the form of hard copy. Documents that are valuable to them. Then you tell them that you charge of fee of $$$ to assemble all of that important information needed to provide those valuable documents, no different from what an attorney provides when creating a new will, or what a CPA provides when preparing one’s tax return, or a dentist after examining your mouth to create a “Proposal†for the dental work needed. Was that visit in his chair free? If they still balk, then you have only lost about 1/2 hour of your time not including travel time, as you tactfully leave, thanking them for the opportunity of being invited into their home. It’s the quickest way to determine of this potential customer is a user, deceptive, liar, incredibly stupid, viable realistic customer, or what ever. The bottom line is that money talks!For you newbies here, learn the above quickly so you will not have to be a moron for many years as I did wasting hours and days after hours and days for nothing, including not even the courtesy of a phone call. Stop now using a trade mentality and start learning to use a business mentality. And blame no one for your failures or frustrations, because starting your own business, you knew damn well the type of people out there, so that is not an excuse. Success in business is obtained by successful “business people†- not “trades people.†And the reason for that is because trades people think of themselves as artists. That’s why they went into their own business: 1) cause their boss was a jerk, 2) they “thought†that of the $65 he as charging per hour, about $50 went into his pocket, or 3) cause they wanted to utilize their trade skills which they enjoyed doing. Business people know one simple truism - time is money.Think about what I’ve said here the next time your kids are watching TV at night while you are working on an “estimateâ€, and after spending 2-3 hours with Mr. & Mrs. Potential customer. And after you’ve given it some good, intelligent thought, realign your business’s priorities. And if you still refuse to bail out, then you will remain dead in the water and continue sinking.It’s amazing how we think nothing of mouthing off to our wife, but are “afraid†to ask for our due from a stranger. And admit it. It is “fear.†We are guys who pride ourselves of thinking we are “real menâ€, but the truth is we are chicken sh!t cowards. Just amazing! And yes! It does take cahones to ask for a fee for what you are about to prepare for them. And also Yes! It’s called being a businessman! I finally became one after being a chicken sh!t coward - and moron - for about 20 years.
Sonny, I think that for the most part, your description is right on. However, I don't use a process like that and I don't plan to. Most people do not know what their project will cost, and ya' know what... I don't either. I almost never throw out ballpark prices, because I see such a range of work that I could not do so accurately. A ballpark is only worth having if it's within 5 percent plus or minus, IMO. I can't get that close pulling it out of my hat.
I sit down and come up with an accurate number. That's what I present to them, and I do it in a written format that gets me compliments every time.
Also, people may not be ready to make decisions on the spot. I do not want to be a guy who tried to force a decision and shot myself in the foot. I recently met a couple who want a kitchen remodel but still need to decide some things between themselves. I'm going to give them a written proposal and a couple of drawings showing two different floor plans. If they do that job... and I bet they will... it will be mine because the effort I put out on their behalf will make them very comfortable with what is a very big decision.
Bottom line... your sales process would not work on me. Mine would. That's why I use it. If someone has a reasonably promising job and gives some halfway-decent answers to questions on the phone, they get a meeting and a proposal for free.
David, the bottom line is that you will not expend the tremendous amount of time that's needed to arrive at a detailed Proposal for free, without at least some assurance that the job is yours. And if that works for you, that's great.Ball parks do work, though. I give them and so does my son, whose jobs vary from about $150K to well over a million. His ball parks have a spread of about 10% either way, which really means a 20% spread. But the ball park is not given until teh ganeral scope of work is established as well as the caliber of the materials to be used. And each of his salesmen generally walk away from that first meeting with a deposit check. However, the difference between him and many other remodelers is that he has branded The Lykos Group, Inc. very successfully, so his customers want "him". The ball park and when they can be scheduled is all that's important to them to get the ball rolling.There's a reason why I nag so much about branding one's self.
Sonny
Thanks for the great advice.
"It’s amazing how we think nothing of mouthing off to our wife, but are “afraid†to ask for our due from a stranger. And admit it. It is “fear.†We are guys who pride ourselves of thinking we are “real menâ€, but the truth is we are chicken sh!t cowards. Just amazing! And yes! It does take cahones to ask for a fee for what you are about to prepare for them. And also Yes! It’s called being a businessman! I finally became one after being a chicken sh!t coward - and moron - for about 20 years"
I think I see a little bit of myself here.
I've tried posting a couple of times but it keeps getting wiped out. Thanks in particular to your advice I just landed a design build contract and saved me countless hours of unpaid work.
Its about time,I've been doing this for along time. And I think were entitled to be paid for our time. When people call me and ask if I give free estimates I say no. I also think that that weeds out the not so serious people.
One possibility would be to indicate that the $ 150.00 would be "refunded" upon securing the project.
"Preach the Gospel at all times; if necessary, use words." - St. Francis of Assisi
MojoMan,
I doubt that you'll ever be successful with your appraoch. Too many things wrong with it..
First in sales (and that should be your first priority since nothing happens untill something is sold) The customer needs to feel that you will give him a fair shot.. When my customers call and ask for my help I drop what I can and get there.. There are Too many others willing to do what I would seem to be reluctant to do..
The first visit is and should be your way of generating sales. Too many tire kickers? then you aren't doing enough to quailify them over the phone.. You need critical questions such as,... when would you be prepared to give the deposit to get started on this?
This establishes wiether they are ready now or price shopping.
There are effective techniques to deal with price shoppers including, shooting them in the foot, hold them ransom, and the ever popular Vague generalization.. If you want details please just ask..
You also need to learn to close the sale. It can and should be done on the first visit.. Learn the techniques. Your time is too valuable for you to not do it..
Finally and this takes experiance and skill but never ever give a quote.. The only quote you ever give should be in the form of a contract which you have the customer sign prior to your leaving a copy of the contract..
There are a whole bunch of reasons never to quote.. First why do all the work only to have your competitors undercut you by a small amount and get the deal? Second, You may fail to properly understand what is called for but your number is in black and white. If after you find out they don't want the new foundation but just want you to build it on piers, you could and should lower your pice to be competitive.. To the customer you got cheaper and they will wonder how much cheaper you can get, another words where is the bottom..
About here I can see a whole bunch of you standing yup and shouting, that's not how it's done in my industry maybe for you etc.. etc.. etc..
Well that's not how it's done in my industry either, I can't help it if there are a bunch of store clerks pretending to be salesmen.. (they rely on being the lowest priced so their bid will sell the project)
When you are in front of your customer you have about three sentencies to actuilly sell, if you can't get it done by then the rest of what you have to say is lost.. You need to learn how to make those three sentences effective and successfull.
That's not to say that all sales last a few minutes, the rest of your time is doing two things, trial closes and handling objections.