Say Goodbye to Free Estimates
“Click here for your free estimate.” Is this phrase on your website? Are you one of the thousands of remodelers that use this promotion to generate inquiries?
If you are doing it as a purposeful marketing tactic, then more power to you.
But if you hate driving around giving free estimates and think you don’t have a choice, then this PowerTip is for you.
Your time is far too valuable to waste.
When I suggest remodelers charge for estimates, there’s typically two responses I get:
-
- “If I charged for estimates I’d lose 70% of my leads.”
- “All my competitors give free estimates, so I have to, too.”
First, let’s address the “I’d lose leads” concern and take a good look at the numbers.
Now, we both know that providing an accurate price for a project can take hours, depending on the size and scope. But, to prove a point, let’s say you can knock it out in 45 minutes.
So, for ten leads you’ll spend 7 1/2 hours estimating. Of course, you don’t email the price (right??), so let’s add in a 30 minute round trip (you’re lucky, all 10 leads are in your backyard).
Plus there’s the 30 minutes to present the estimate. Again, I’m being very conservative here.
In all, you have just spent 17 1/2 hours of your week on free work!
If you’re a regular PowerTips reader, you know that we expect you to work no more than 48 hours per week. But let’s say you work 60 (after all, you have a lot of free estimates to get out), that means you have just spent 30% of your week on free estimates.
On the flipside, assume you had charged for estimates and, as a result, only 3 of the ten leads stuck with you. Even if you now spend 3 hours (instead of 45 minutes) on the estimates, you would have spent 30% less time, and you generated revenue!
And don’t forget, your close rate should now skyrocket. These three leads have already spent money with you, so the likelihood of them “wasting” that investment and starting over with someone else is very low.
But all my competitors offer free estimates
This is by far the most common argument I hear when remodelers defend their free estimate policy.
So I called your mother this morning and when I told her your reasoning she said “if all your friends jumped off a bridge would you do it too?”
Seriously though, I have two thoughts on this.
First, the core element of any marketing strategy is to differentiate yourself. Doing everything your competitors are doing breaks the single most fundamental law of marketing.
Secondly, charging for estimates when your competitors provide them for free naturally moves the conversation to self-adulation.
Think about it, the prospect calls your office about a project and when you mention the price to come out, s/he will inevitably say:
You want to charge me for an estimate? Your competitors are coming out for free! Why would you charge me?
And there it is. An invitation by the prospect to tell them what makes you great.
Still not buying it?
Although I could list dozens upon dozens of remodelers in the US and Canada that charge for estimates (just off the top of my head), I will always have a handful naysayers. “It’s impossible in my area,” they’ll say.
For the doubters who won’t break, let me offer an alternative: differentiate estimates from proposals. You can keep the free estimate button on your website because you are now charging for proposals.
es·ti·mate verb
/ˈestəˌmāt/ an approximate calculation or judgment of the value, number, quantity, or extent of something.
The key words in the definition are approximate and judgement. You can and should give an estimate over the phone. It’s a pre-qualification tool.
It’s easy. Once you’ve received the description of the project you say, “Okay Mr. Jones, based on what you’ve told me you can expect the project to come in between $100,000 and $160,000.”
There you go. You’ve just provided a free estimate.
Assuming they are still on the phone and didn’t gasp, scream or pass out, you can now offer to give them a full-blown proposal for $X, which will be “deducted” (optionally) from the project price if they choose you.
What about you?
Do you charge for estimates (or proposals)? If not, do you think you could never do so? Do you think I’m out of my mind? I’d love to hear from you. Please share in the comments below!
Hey Mark, great article. Love it.
Another reason not to give free estimates: besides being a huge waster of one’s time, it basically provides a free template for the prospect to shop around to the competition. (And there is always someone willing to do it for less.) Plus, if you have discussed any design ideas with them, you have essentially given away your intellectual property for free.
I also love your point about differentiation. We have to stop watching the competition and matching their moves. Do they really know what they are doing? Instead, we need to decide what would make us unique in a meaningful way to the prospect, implement that, and then let the competition struggle to keep up.
Thanks again for a great post.
Thanks Wes. Great point about giving free templates to the competition!
We have told potential clients that we charge for a bid if we know they
are “considering” buying a house, or some other red flag that tells us
they are not likely to become clients. In those cases. We propose to
refund the client if they move forward with a project with us. Of the 5
times I’ve done that, we have had 1 paid estimate, the others declined
(Which is fine with us). FYI, we charge $200 for this type of
estimate. The 1 paid est. did not turn into a job.
We do give ballpark pricing right on our website to get help people that have no clue,
http://discoverelite.com/project-estimates
and
we discuss ballpark pricing on the phone prior to ever going out for
the first call, but we have charged for estimates generally speaking up
to this point.
Question, How much are people charging for estimates that you know of.
Thanks,
Eric
Eric, the answer is: It depends. In the design/build world, a first step to getting folks away from free and into your world would be a feasibility study . . . or something similar. Simple, limited deliverables, perhaps even plus or minus 20%. For this, I’ve seen everything from $750 to $4500. This is most often a first step with a greater investment paid when the client moves into design development. I’m delighted that you’re asking for some payment for those unqualified prospects. . . and even though $200 is low, seems like it’s doing the trick by getting rid of those who are not serious about using you and your vast amount of expertise.
If one were not running a d/b company, I’d create a “package” around a rough estimate (again, plus or minus 20%) and charge for that. Remodeling Project Estimate Package or something that sounds value-packed. Add some sizzle to the title!
(Thanks again for being part of RA Nation! Loved the testimonial you sent last week!)
Can’t add much to that.Thanks Victoria! Eric, check out Kelly’s comment. 🙂
I keep it simple: During my over the phone qualifying of a client, I tell them that I charge for my “estimating services”. I think that clues them into understanding that it’s actually a professional service they’re paying for- and it takes time to do. I further explain the time necessary to pull together an accurate estimate if they question the “service” end of things. For kitchens and baths, I can toss out a ballpark figure for them over the phone, and if they want something specific, I’m happy to provide that for them, but I charge for my time.
People need to understand that it’s the time involved they’re paying for. And more often than not, they will value something that they paid for vs. something five other contractors gave them for free.
I provide a one hour free consultation to meet the clients, look at their project, and to see if we’re a good fit- I tell them nicely that I’m sizing them up just as they are me- remodeling is a team effort, and we all have to have a certain amount of trust in each other. Then I charge $65.00 per hour for the estimate, with a not to exceed amount (per California Law).
I love that you define it as an “estimating service.” A simple yet effective way to set expectations AND show value. Thanks Pam!
We charge $2000 for new construction, $1000 for any kind of remodel with the exception of bathrooms, and $500 for bathrooms. We rarely have anyone ask if that fee will be deducted from the price of the job if they hire us. When they do ask, we tell them that it will not be deducted because the cost to do the preliminary work is independent of any work that would be done to complete the project once the job starts. Most people understand and say “okay”.
I too did not want to venture away from the beloved free estimate, but Paul Winans convinced me and now I’ll never, ever go back to wasting my time and efforts.
That’s fantastic Kelly!
Thanks for the info. Just to make sure I understand we’re talking apples to apples.
Example 1: Client 1 calls for us to look at a kitchen remodel, no plans drawn up, ballpark value of $50K based on the phone conversation. We would then tell them prior to meeting we need a 1K fee in order to put together some tighter numbers?
Or we need 1K fee to walk them thru a kitchen design, pick some finishes, etc?
Typical K&B dealer around here (Santa Cruz, Ca.) charges 850-1.2K for a kitchen remodel design including cabinet and wall layouts, including the construction estimate (no structural or permit drawings).
Example 2: Client 2 calls for us to look at a kitchen remodel, has plans drawn up, finishes selected,
ballpark value of $50K based on the phone conversation or other bids he’s received. We would then
tell them prior to meeting we need a $1K fee in order to put together an estimate of what we would charge to build to their plans?
Are either of these examples about right?
I appreciate any further details you can provide in our discussion.
Example 1: Client 1 calls for us to look at a kitchen remodel, no plans
drawn up, ballpark value of $50K based on the phone conversation. We
would then —
go to meet them, talk about their project, talk about your process. First step, feasibility study to start to develop budget. Second step, design development. Third step, construction contract. (for example. There are many workable processes) Explain what they would get for their investment in each step and how the steps are important to deliver the most value for them, yadayada.
Then, recommend that they get the project started with step one and that the investment is $1000.
Then sit back, be quiet and wait.
Ideally, they will go ahead. You’ll do the feasibility study. You’ll come back, they’ll love what you’ve done. They will OK the design development. You’ll do that. They’ll love it and go right into construction.
For the selection process, you might build in 3-4 hours of time with a designer — staff or outsourced — to help them pick finishes. This is near the end of design development, I would think. This is different than the sales process, yes?
Example 2 In those cases, plans and all are ready to go. . . your job is to find out if they are having 4-5 people “bid” on it. If so, walk. If you have the opportunity to meet with them, tell them about your process, then, yes, I’d ask for the Project Development Fee . . . some will offer to apply against the construction contract when the time comes. Make sense?
We first screen on the phone and quote our average project construction cost based on the type of project the client is requesting. Once they pass the initial screen (VERY IMPORTANT SCREENING), we provide a free consult at the client’s house. If that 45 minute consult is a good lead, the client is then asked to commit their own time to come into our D/B firm for a complimentary educational meeting about our process, with the estimated cost to design the project. We are DB, thus we are selling our design services with a proposed budget range for construction. When our design backlog gets beyond 2 months, we would consider a consulting fee that would be waived if they enter into a design agreement. Back in the day, we used to charge $75 consulting fee that would eliminate the budget shoppers right out of the gate and narrow down our target clients, clients that want to use our firm based upon our outstanding reputation. Interesting responses and good topic to discuss….thanks! DESIGN BUILD and ENJOY!
This is a great procedure. It’s all about minimizing wasted time and putting your resources where there is the greatest opportunity for return.
Thanks for sharing Marty!
This has always been a sore topic with me and it seems like charging for estimates is more prominent in other regions of the country. Absolutely no one does here. But I might take the plunge.
The way I see it, I’m not doing it for free as you say because I factor this sales time into my overhead. Just as the larger companies have a sales team that are often very well compensated. So, too, should we little guys be for our sales time. No way am I giving away my time for free.
But the biggest frustration(s) for me in not charging for estimates are that 1.) It ends up being the paying clients that compensate my company for all the wasted sales time and that’s not fair. And 2.) Giving away free estimates is an open door for tire kickers and price shoppers. Neither of whom I care to waste my time with.
Great Article Mark!
I feel your pain, Phil. Time is the single most valuable asset a business owner has. It cannot be wasted.
But, before “taking the plunge” be sure it is part of a well thought out strategy and business growth plan. Don’t just flip a switch tomorrow without having all your ducks in a row!
Not to offend anyone but I think charging for estimates is small time thinking. It’s a false feel-good thing where contractors feel they are somehow getting some payback from homeowners. Contractors would be better served using their energy to develop business and marketing skills rather than trying to make a few pennies on estimates. You might find a few that will pay, but you will eventually lose a primo job because you charge, and the potential profit on that job will eat up years of fees you might have made. Now, if you truly provide design or hard-core consulting then yes, you should be compensated for your time. But a straight across the board policy of always charging to estimate a job, bad strategy in my opinion.
No offense taken, Allen. Your position is, in fact, that of the majority. But I think we are actually closer than you think in our philosophies.
The point of charging isn’t to use estimating as a profit center. It’s to ensure you (as the owner) are focusing your time on only those things that have greatest opportunity for return. It weeds out the tire-kickers and ‘lowest-bid-wins’ prospects.
As you stated, “Contractors would be better served using their energy to develop business and marketing skills.”
I agree wholeheartedly! Which is why (in my opinion) the owner shouldn’t be wasting time driving around town providing free services.
Thanks for your input!
As a customer, this article really struck home. I am in the process of selecting contractors for two remodel projects, each in the $60-80k range.
The very first contractor I contacted let me know that he would prepare a proposal for $1000. I never contacted him again. The message I received (presumably unintended) was “Bidding on your job will be an inconvenience to me.” But more importantly, how am I supposed to determine if this is someone I will want to work with if I have to pay money just to get to know him — money that will be out the window if I choose another contractor. In your scheme of things, I guess I am out between $2000 and $6000 just to get my two projects off the ground (depending on whether I sole source an unknown contractor or get the proverbial “three bids”). OUCH.
I guess this guy weeded me out as a “tire kicker” or “low bid wins” prospect. However both are wrong: my projects are going forward, and not with the low bidder but with the contractor in whom I have the most trust and confidence.
Christopher, I believe that the problem with your experience was the manner in which it was communicated. . . not the fact that he estimates are not provided for free.
The far majority of professional remodelers will be delighted to meet with you, talk to you about their process, review your project, provide ballpark estimates based on the hundreds of previous projects they’ve completed, introduce you to their happy clients, explain why they do the things they do the way they do them. This would allow you to get to know them, understand if they value what you value and visa versa, if they have the skills and experience that you’re looking for. If it’s a fit, then a small fee to compensate the remodeler for his hours of time using his years of hard-earned expertise to develop a clear, detailed, fleshed-out estimate for your customized project would probably feel just fine.
Victoria, you are touching on the difference between “estimate” and “proposal” as Mark mentioned in his article. I don’t mind even narrowing it down to one contractor before the proposal stage. I can see where you are coming from, after all I paid my architect to design the job and create the CD’s that the contractors are basing their proposals on.
On the other hand it seems to be a (maybe localized) issue of what are the customary trade practices. Before I retired I spent a few years running a computer networking division. I know what it is like to spend many man hours developing a proposal that is going into a low-evaluated-bidder selection process. But I would have gotten laughed out of the CIO’s office if I tried to charge him for my sales engineer’s time or my team’s overall effort.
Since remodeling seems to be much more of a “small business” arena where the business owner is likely the one doing the estimating, I can see how the issue of wise use of time is crucial. Whereas in my case, I believe my sales team was weeding out tire kickers before they ever got to the proposal stage.
You totally get it. When the remodeling company owner is doing all of the selling, his/her time is just so limited. We want to help these folks have a balanced life too. . . so being able to integrate some processes to help them focus on the most likely prospects is important. Thanks so much for the comments.
As you are someone who took the time and effort to hire an architect to prepare plans and specifications, you have already identified yourself as a legitimate, serious client. Most contractors will provide preliminary estimates to architects they work with frequently knowing they will get a high percentage of those estimates as real projects. I think Mark’s advice is aimed more at the contractors dealing with the sea of people who want the contractor to design the project for free and then deliver the construction at below market cost. I am sorry to say from long observation that this type of unrealistic individual is more the rule than the exception and any time spent on them will inevitably be a lost investment.
I’d have to agree with Victoria that the very first contractor didn’t communicate the process properly to you.
You shouldn’t have to pay to get to know him. But that’s precisely where the breakdown lies in my opinion. The estimate isn’t “getting to know” anyone. Estimating shouldn’t even be the first step.
The contractor AND the client owe it to themselves to see if it’s a good match. They should get to know each other to some degree before determining if ‘the relationship’ is worth taking to the next level.
You’re going to spend the next few weeks/months together after all!
Is it perfect? No. invariably a nice project will “get away.” But, you can’t go through life trying to be everything to everyone on the off-chance that you’ll miss out on one project.
We see too many remodelers that are working 75 hour weeks. They miss kids growing up, they miss dinners. It’s not good.
I think you’ll agree that everyone deserves to have a balanced life.
To me, $1,000 is not bad for designing something, although you ought to be able to meet with him and get to know him for free or maybe for $100. Coming out for a free estimate for one person isn’t much, but when that happens 50 times a month without compensation, suddenly you’re at a huge loss. If normal people go to work knowing they’ll get paid, contractors ought to be able to, also, in my opinion.
I really don’t understand Christophers’ relevance to this discussion. He’s not inviting potential contractors to the site to give “estimates”….his architect has spun some disks of a completed design.
Create a mailing list of suitable GCs send them the disk with an invitation. They want the job, they will call with their particulars, if not…so be it. If the GC wants the job he’ll get on his horse and pay Mr. Forsyth a suitable call for business. Just why he (Christopher) should shell out hefty money to a firm wanting his business is a mystery.
Do you believe this concept would work in the window, siding, and roofing industry? I’m always looking to innovate my business.
Great question, Bill! As you know, specialty exterior is a unique vertical. The same rules don’t typically apply.
Case in point, full-line remodelers will generally budget 6% to 9% of revenue on marketing; whereas, the specialty exterior company is spending 18% to 25%.
With those numbers, there’s usually a “get in front of every lead we can” mentality.
There’s also a different mindset for the consumer. Having a “dream kitchen” installed is a luxury. Something to show off to family and friends AND something done by choice. Putting on a new roof is usually out of necessity.
That said, I refuse to think anything is impossible. Innovative companies disprove the status quo all the time. With the right strategy and brand positioning I think you could pull it off.
After all, how many plumbers do you know that come out for free? In my neighborhood, it’s $90 just to walk in the door.
I’d love to hear others thoughts on this. Anyone else think specialty exterior companies could charge for estimates?
My business is focused on the small 1 hour projects up to bathroom remodels. I have been charging a $30 trip/consult/estimate/service fee every time my craftsman goes out to do or estimate a project.
I found this to eliminate the price shoppers and give us more qualified leads that actually make us money.
Yes, some people are appalled that we charge when everyone else if Free. We acknowledge this and invite them to check around and they are welcome to call us back if they need.
Not providing Free estimates makes me different and I’m proud of that.
Here’s another take on this topic from one of our Roundtables facilitators, highly successful remodeling company owner, long-time Roundtables member, and columnist for Professional Remodeler magazine: Craig Durosko.
Read it and let us know what you think!
http://bit.ly/1yJVy8I
I read that article. What does it have to do with free estimates? I can’t even tell if the guy is for or against them. He says, “I wrote the article on 25 ways that contractors can lose money, so you know what I think about free estimates,” and when you read the article, it just talks about 25 different trades where you can lose money by inaccuracies. So, after having read both the first article, and the 4-part other article, I’m no better as to knowing his position on free estimates. The article is a wild goose chase!
Great article. I know I have wasted almost a month once chasing leads for their “free estimates.” It’s really insane. Homeowners don’t go to work not knowing whether they’ll get paid – why should contractors? Also, everybody is into things being “fair” – Why should I overcharge the person who decides to use our services in order to give a free pass to all the tire-kickers that wasted my time?
I don’t do the kind of work where I bid out jobs any longer, but back when I did we dealt mostly with business clients and the work was more time and materials oriented than fixed fee.
One of the things that differentiates making estimates to homeowners vs. making proposals/bids to business customers is that often it is possible to get the business to agree the terms, conditions, and design of the proposal are confidential and proprietary. On the other hand, the consumer market is dominated by a “we’ll beat any estimate” mentality which sets up a race to the bottom. Unfortunately for the consumer this means a “race to the bottom” in terms of quality as well as cost (nothing is free) so ultimately the consumer loses.
On the other hand, if a customer pays for a proposal, I think they are more justified in looking at it as they would if they paid for an appraisal and doing what they want with it. I’m not sure I like that model but if the consumer buys the work product of the proposal (just as they would pay for the work product of the construction) it seems to me the contractor has less to gripe about – the contractor did the work and got paid for it. Again, I don’t like the model but that’s the way I see it.
In terms of charging for the estimate, I can’t imagine charging (or being charged) a lot for an estimate unless it included a lot of detailed renderings, design, etc. so the consumer walked away with something that was objectively worth the charged cost. If the primary deliverable of the estimate is the standard carbon copy form with a list of bulleted items and a cost total at the bottom, I think most people would be offended to pay more than $30 for it and as we all know that’s not going to do much more than recover the cost of the gas to drive out there.
In this day and age of Angie’s List and the Internet, it is unlikely many customers are going to sign for any significant job without “doing their homework” which means getting multiple estimates. For most homeowners in my region they are typically looking at total project remodel costs in the $20,000 to $30,000 range with the $40,000 and up being truly exceptional projects. Nobody contemplating a $20,000 project is going to pay much for multiple estimates because that’s going to take a large portion of their budget.
I also don’t like the idea of creating a “lock in” scenario with estimates – if a customer only goes with a particular vendor because they’ve already “made an investment” with them vs. picking the one they will be most happy with, they are starting out with a bad mental state going into the project which is never good.
I am a 1 man shop who has been giving free estimates for 10 years.I been thinking about losing the free estimate service for some time.After reading your article,have decided to start charging.I cant tell you how many people have called me for that “free estimate”‘ only to have me tell them how to build it or fix it.Theres too many people who look on lead services for only the free stuff. Im just tired of it.It eats into the time I need to be with paying costumers.
I don’t usually charge for estimates, but I do typically avoid competitive bidding situations. We mostly do renovations and I don’t believe it’s possible for a homeowner to meaningfully compare bids. Here’s a piece I wrote on the subject a few years ago for JLC. http://www.jlconline.com/jobcosting/business–still-bidding-after-all-these-years-.aspx
Thanks for sharing Dan!
Our company does a lot of small jobs and we take in a lot of leads (we did 1200 estimates last year). Almost 2 years ago we started charging for estimates at the urging of one of my microboard members. We don’t charge much, just a $35 “measuring fee,” because our jobs are generally not huge. This simple little fee easily eliminates 200-300 leads per year, all of which would most likely have just been a waste of our time. We will never go back to completely free estimates. If they can’t pay such a small fee to get a quality, detailed, written estimate, why in the world would they actually pay you to do the work?
Thanks Josh! Great input.
The “mistake”, if there is one, is that contractors think that that there is only one type of estimate to be made – highly detailed. My contention is that that there are at least 3 levels of detail, each one requiring more and more work. At outset, many homeowners only want a rough number, an approximation, so that they can make choices (e.g. project, material, etc.)
So know what level of detail the homeowner wants at outset before wasting a lot of time. You need to give an estimate, if only to establish credibility as well as self select the client.
For more information and a better explanation, see tip 9 of the following eBook.
http://www.myreno411.com/…/advertising_3_10%20best%20practices.pdf
I would love to start charging for estimates, which end up turning into free consultations and proposals. Do you think this could work with with an electrical contracting company? I am more so talking about projects under $5,000.
Steven – This is a different beast for trade contractors. Generally, charging for proposals goes hand-in-hand with offering consultation, design, problem-solving, creative thinking, etc. The type of things a design/build firm does on a regular basis.
I suppose if you’re doing that type of thing you could charge a fee. But if for example, you’re given a set of blueprints and asked to provide an estimate, then this isn’t something for which you could be charging a fee.
If your estimates are *truly* turning into a consultation session, then yes, I’d say you should be billing just like any other professional consultant does.
Thanks for reading. Good luck!
You can. We do it. It works. Email me or call me and I will discuss it. We started a trade Association on LI to Unify the industry and it is one of the points being discussed to make the industry here more profitable and efficient. As I have stated before. It works very well and is easy to do.
Gregory 631-987-8801
GS@DoneRightRemodelingNY.com
This is why contractors are such scum bags. I run a translation business. My time is worth $200-300 an hour. I NEVER charge to examine a document before taking on a product. Your industry is a goddamned shame to American capitalism. I would never pay a contractor to come look at plumbing or a remodel ever again. I did once. He asked for $100 and never called back. On this site your pathetic rationale of twisting definitions around by saying estimates are free but proposals are not…. PUH-LEEEZE as the Valley Girls say. Who the f–k do you think your kidding? Your time isn’t that valuable that you can’t plop your ass down in your car and drive 20 minutes to talk to me about a job face to face. My aging parents gave $5000 to a contractor who did half the work and left them in the lurch. You are the lowest form of life on this planet and this article proves what a swindling bunch of mooks you are. May the fleas of 1000 camels infest your collective arm pits and may your kids get lost in the woods. PAY for an estimate…. what universe do you live in…..
From my end of the wheel I see this: I want the job but you have to pay me to show up to work and then pay me $$$ to start to work. Face it, if your a tradesman like a plumber or electrician you must go to the customers house there is no job if you don’t. Service fee to show up is ludicrous, the customer has not received anything for the money. Don’t give me the BS that I will charge $$$ to show up and $$$ per hour from the time I pull up, hire me now! If I have to pay the trade to show up and I hire them, then by god that had better be applied to the work! If the homeowner cannot agree with the trade on a fair price, then at least the customer has professional advice for the “Service Call”. This is a tradesman ruse that is too long overdue to be shut down.
Agreed Ronald. This only applies to full service / design build companies. They often feel they need to provide full blown designs and plans for free in the hopes of getting the job. That’s not good business.
Thanks for the comment!
Now, I agree with your point.
As a demolition contractor i waste a ton of time on guys fishing for prices. More recently I’ve been utilizing estimating tools, experience, Google Earth/Street View, Real Estate Listings & any other means to provide “Ball Park Estimates”. I save on time & gas when it comes to this method. However that only works for smaller projects not so much for the large ones! I know i have tons to learn, so my question is, What is wrong with adding the time spent (10 hrs @ $40hrly =$400.00) to the over all figure in the estimate?
The only problem with adding the time spent to the the estimate is that you only get paid if you win the project. Of course if you already new you’d win the project then that’s time well spent anyway.
That’s the point of the whole thing, to avoid doing major, time-consuming work and never getting paid for it. Giving free “ball park estimates” is fine. In fact it’s expected. You need to at least have conversations about price range with prospects.
The concern is when you get caught up in hours of planning and measuring just to give a tight proposal on a project you might not even win. Especially on the big projects.
I’ve seen guys do full 3D renderings, layouts, and preliminary plans for free. That’s really pushing it. You’re giving a complimentary design service.
It’s all about being smart with your time. That’s the main point. It really starts with proper pre-qualification of the lead. The more qualified the lead, the better chance of not wasting time.
Check out this post by one of our Consultants and Roundtables facilitators, Paul Winans: https://www.remodelersadvantage.com/moment-lost-art-pre-qualifying-leads/
Thanks for reading.
well…next time you go to see a Dentist be prepared to drop $1,000 for an “estimate”…maybe we all should pay for trying on shoes at a shoe store…eh…or a dress at Macy’s…it is called cost of doing business…!!!…wake up…we’re in 2017…huh
That was the WORST analogy I’ve heard in about 8 years.
Tell you what, when a dentist drives 30 minutes to come to my house; then he gives me a COMPLETE dental checkup in my kitchen… then … sure, I’ll pay $1000 for the “estimate.”
In fact, I’ll bet a hundred bucks to a doughnut that any dentist on earth would probably charge that much for such a service. So thanks for proving my point.
But thanks for your 2 cents.
Yeah, that was a horrible analogy on GH’s part.
My son jammed his thumb playing bball the other day. We weren’t sure if it was broken, sprained or just a bruise. So, in order to get that information, I had to drive to my doctor, pay for an office visit and an xray for the doc to tell me it was a sprain. Maybe next time, I will ask the clinic to send someone out to my house and diagnose the problem for free before I decide to move forward with them. Then, I could call two other clinics to do the same and see who has the best price between all three.
It is 2017.
Right? Thanks Chris
🙂
actually dentists do drive to your house and do offer free exams…!!!…the ones that don’t travel provide free estimates that cost 10 times more than your 30 minute drive…!!!
I came upon this thread because we’re considering charging homeowners for quotes. We realized that some customers were only using our quotes to negotiate with their already chosen contractors and we weren’t even being considered for the job.
Since our business is about custom work, and not about cheaper volume work, I think we can justify charging for a written proposal and give only verbal range estimates. We plan to tell our customers that they’ll get back double their quote charge if they sign with us. I think that will be a good incentive for our target customers and weed out the cheapskates (who aren’t our customer anyhow).
Very creative, Carol. Thanks for sharing.
Please come back in a few months and post the results of your experiment!
Thats a great way to eliminate cheapskates.
Tired of wasting time preparing proposals for nothing..
Thank you
This article is very good. We’ve had a lot of “prospective customers” waste our time estimating, finding out after they had no intention of hiring us.
It’s not always easy to tell over the phone. And we don’t want to turn away legitimate prospects by being overly suspicious. But some inquiries seem fishy at times.
I have a question though…the article says you don’t email quotes (right?)…is this a bad thing? I have done this a few times, and regretted it. But can you tell me what is wrong about it?
Thank you.
Although I just found this article, we’ve been doing this for the last 18 mo’s and its been a complete game changer… We charge $500 for in home visits and final quotes, as most of clients are in LA/San Diego and the traffic is terrible, plus we can easily spend 1-2 hours with the homeowner in person… That’s a 6 hour day before ANY PRICING has been put together… When they pay the $500, they get the in home visit, 3D drawings, elevations, floor plan, and an itemized quote… The people that pay the $500 are much better customers… We simply forward the retainer to the invoice as a deposit on the project… And for the ones who gasp at the thought of paying for a quote, we simply wish them the best of luck and get them off the phone AS FAST AS POSSIBLE!!! This has saved me THOUSANDS of dollars and hours over the last 18 months…
as a handyman company we charge a low fee to schedule a service call. It has work for us by not wasting time with people just looking for a price and not doing any repair. Still with any work approval we waived the service call fee, but I wonder if there is a better name instead of calling it a service call?
I won’t hire someone who charges for estimates period.
A little late here … Best thing I ever did for my business and my peace of mind, was to start charging a nominal fee of only $35. 2018 we were charging a $35 fee for estimates and we’re going to keep doing it this year. I would never go back to giving free estimates. I love my customers and I love working with people and by charging a fee I’m not getting burned out by going to 2 yo 3 estimates A-day. Now I go on about 6 estimates a week. I sell about the same amount of jobs and actually make a little more money, because I can spend more time with my customers. As a retaining wall contractor, in my industry, most of my competitors don’t always answer the phone, show up on time and finally get a written estimate. I do all 3 and all I’m asking for is $35.