I just left a condo owned by a CPA who wants to remodel their master bath. Based upon our initial discussion, I ball parked the project at between $11K and $13K depending on the final material selection. He wrote out a check for $400 (3% of the anticipated price) for the SCA – non-refundable and NOT to be credited to the job.
When he first balked at the $400, (I was prepared) I asked him: “OK. I would like you to come to my house and pick up my tax paperwork. You can ask my any questions you’ll need to figure out my tax liability or refund. Then I want you to go back to your office and do what every you have to do to come up with the total of what I will owe or what my refund will be. Then I want you to come back to my home, at my convenience, to go over everything. By the way, I’m also getting “estimates” from two other CPAs who I expect to do the same. Based upon their “Proposals”, I’ll probably “award” my “project” to whomever gives me the best “deal. Of course I will not expect to be charged for any of that, right?”
I explained to him that he called me from a previous client’s recommendation and because he was told that I was very professional. I further explained about the process and the time that goes into getting the info needed prior to actually typing up the SCA. I then asked if he thought that “professionals” such as “he” and “I” should be paid for our time and expertise, saying: “Unless of course, you don’t really want to retain a “professional”, but are interested in price only and not the results or ‘how’ the project is run.” That’s when he brought out his check book, saying: “OK. You’re right!”
Yes, it can be done. It is being done, and all over the USA.
Replies
That's right, I came home with two $500 non-refundable deposits this week. Remind us what a SCA is. I forget and there are new people here.
Excellence is its own reward!
Piffin, I decided that in order to get paid for "Proposals", I'd have to change the game, and the "name" of the game. So, instead of the name being "Proposals", it was to be called SCAs - Specification and Cost Analysis.
And if one thinks about it, that is exactly what we do, create a set of "Specifications" after talking to the client one or more times. Then we do a "Cost Analysis" by 1) obtaining material costs, 2) obtaining prices from subs, and 3) determining our own labor costs, operation by operation.
I explain that far too many contractors create Proposals that are in fact, ambiguous, and is one of the #1 reasons for the horror stories we've all heard about (they can relate to that). "Yea. Remember Joan, when Bob and Sally said they "thought' their contractor was going to ................?"
I also explain that an "estimate" is nothing more than a "ball park", which we offer at no charge during the initial sales call. I also make a point of talking about "estimates" because as we all know, 90% of the public ask for an "estimate" not knowing what it really is.
"Well, Mr. & Mrs. Jones, our SCA details exactly what we are going to do, all product materials to be used including product brands and model numbers. It also details what is not included, and specifically. We even detail items such as clear casing or clear baseboard as opposed to finger jointed trim - and the reasons, or why we use Polyseamseal adhesive sealant instead of .99 caulk, why we insist that our electrician twists the wire ends before installing a wire nut, as opposed to just sticking those straight ends into the nut and twisting the nut" - etc.
That all takes less than 1/2 hour - well worth the results - a "paid" SCA.
As I've mentioned before, Candi and Troy Hilton even cover this on their web site at: http://www.hiltonremodeling.com/ Click on "The Remodeling Process" where they have also included their own verison of "The Process."
It works!
Hey there Sonny and all!
I was just checking my web site stats and saw a lot of activity coming from these forums. I should have known you had something to do with it Sonny! :-)
This is one of my favorite subjects. You all must know that the base of "The Remodeling Process" came from Sonny's. He shared that with us about 3 or 4 years ago. This is the single best thing we have ever done for our business. Consumers can see how we do business via our web site and if they are only interested in free.... We don't hear from them. When they call there is a package of info sent (basically the same as the web site info) that details the process along with license, insurance, references etc. The stage is set at that point so the discussion is minimal about charging for design, specifying and costing.
The other thing it has done for us is made our time much more productive. The most time we spend with a client "shopping" price is 2 hours for an initial meeting. VS 10-40 hours putting together a price for a job we most likely won't get because we aren't in the business of lowest price.
Loved the story Sonny. You always have great ones!
Take good care
Candi
PS Sonny is there a time and place set up for the Remodeler's show gathering yet?
Excellent sales call, Sonny!
The key to success in your story is to possess basic knowledge of what your prospect does in their "professional" lives. How can that be linked with what we do. How can a P.R. exect. relate with what we do? Or a doctor? Lawyer? Car salesman?
Believe it or not, many people have no understanding of the complexity (or simplicity) of our business. We can walk away with a sale if we are able to connect our lives to theirs.
I try to find out exactly what a prospect does for living before I show up on their doorstep and if need be, a little research is in order. A couple of weeks ago, I called on a very attractive, young women who, when asked what she did for a living, answered, "I'm the vice president of a large HMO based here in town." I was at a complete loss for a second, not knowing a thing about a HMO executive or what they do, yet I had the presense of mind to pick up on the pride of her position as vice president that I was able to quickly point out how impressed I was that she achieved such a position at such a young age........
...............Sometimes you just have to rely on B. nosing................actually, I was impressed.........really.......
Sonny,
Against my better judgement I just wasted probably 40 hrs. on a free estimate for a "friend". They had a bid from another contractor who they had used before.
I was able to extract his price from them in the first meeting and it seemed low, about 100 buck/s.f. on a middle of the road remodel. I said that sounds like a real good price, and knowing the contractor, told them I would use him at that price. But they insisted on a price and I spent the time to do it thinking that I would show them what a quality job would really cost. I got sucked in.
Anyhow. Good to see you posting again. I'm not spending as much time here anymore, but I'll be looking for your posts.Tom
Tommy, what happened to you happens to all of us , but from strangers. From friends, it hurts. I just finally got fed up spending evenings and weekends on "estimates" and many of them never even had the courtesy to call me to tell me some one else got the job, and to say "Thank You" for my time.
The day I said "Enough!" was a happy day even though I didn't have a clue about coming up with a solution to that typical problem. I just knew I was fed up. However, like Ma always used to say: "Where there's a will, there's a way." As with most Moms, she was right. That's how I came up with "The Process", then later with the SCA idea.
Like any other problem, the solution is out there somewhere. We just have to find it, and if we say: "It can't be done", it can't. But if we say "Maybe", or "What if......", an entire new world of ideas become visible.
Mark, you mentioned an important key in selling anything, and a philosophy of Harvey MacKay (Swim With The Sharks Without Being Eaten Alive). Always know as much as possible about whom you will be trying to sell something - before you meet him or her.
A big amen to that research thing.
Last night, I was writing an inspection report and list of recommendations for a new client just now purchasing a property here. I never heard of him before but his email adress originates at the companyhe works for. When I returned his phone call, I learned that he had his own personal secretary. I used google to find his bio at the company website. In writing the report,I used terminology he was familiar with.
You don't talk to a rabbit sounding like a lion or he'll be gone.
And you don't come across as a mouse if you are talking with an Eagle or you'll be lunch. These examples are attitudinal but same process applies in communications, find words and illustrations they understand.
A doctor wants to hear you diagnose the problem.
A mechanic wants to seee you tinker around with some figures.
A manager is interested in knowing if you can "sharpen your pencil".
An engineer is more drawn to technical language.
.
Excellence is its own reward!
"A doctor wants to hear you diagnose the problem. A mechanic wants to seee you tinker around with some figures. A manager is interested in knowing if you can "sharpen your pencil". An engineer is more drawn to technical language. "
BTW, that for clients that is also a good way for the client to screen the contractor.
If the contractor is more of a BS artist than a problem solver it really shows up when he tries to use your area of expertise to snow you.
As long as the BS artist is on his own field he can often get by with a lot, but get him on yours and he is lost.
Now back the the regularly scheduled broadcast that has nothing to do this this interruption.
Candi, noon on Thursday at the Hanley-Wood booth? If you can't make it, call me on my cell phone while you're there: 239-253-3899
Hey Sonny,
What is the best time of day for everyone here to catch you on your cell phone ?
; )Don't bogart the Ghost
Quittin' Time
It's on from about 7:30 AM (OK, so I get up late) until I go to bed around midnight - or later. Actually, now that I think about it, it's on continually in my office at home after work. I use it as my business line. No messages waiting for me when I get home and customers get me quickly during the day. I just plug it in the charger it at night and drain the battery monthy before recharging.
Othewise, after supper my home phone is 239-793-6609.
So, Sonny. Who the hell gets up at 7:30 in the morning? Not me. I seldom go to bed before 3 am or 4, and if I'm to get my normal 5- 6 hours sleep there's no chance that I'll get up at 7:30.
The initial enquiry usually starts with, "I need a price for this or that. Can you give me one?" "Sure," I say. "Bring everything you've got into my workshop on such and such a day at such and such a time, and I'll do a free estimate.-------- Oh, that's inconvenient because you'll have to take time off work to bring in your damaged table." "No problem. I could come out at the weekend when it's convenient for you, but there will be a $150 consultancy fee, deductible from the final bill, assuming you accept my estimate and commission me to do the work."
That seems to filter out the time wasters in double quick time, especially the 'damaged' furniture mob just looking for a price to stiff their insurance company with, and I've actually picked up a few consultation fees lately from genuine enquirers with a real intent of getting their damaged goods repaired. Needless to say, I tend jack up my charges a bit here and there to cover the $150 deductible 'estimate charge', ha, ha. Slainte. Website
While I'm at the show it will also be on from get up till bed, again, late.
ROFLOL
You are as naieve and trusting as I usualy am. (I learned my lesson a few years ago about putting personal info on the net.)
: )
Thank you for that.
Maybe I should rephrase my question...
Hey Sonny, what is the best time for all the thousands of people who read this forum... crackpots, axe murderers, angels and saints alike... can get through to you on the phone numbers you have provided ?
Hey, I know !! Lets ask Piffin what his phone number is.. hehehe
: )
Don't bogart the Ghost
Quittin' Time
Well, I've written down Sonny's numbers for next time I'm in Florida and I hope he edits his posts to delete them. But then maybe he goes armed. It is a right to carry state..
Excellence is its own reward!
I don't think Sonny's unwise to post his home number. I happen to know that he's from Naples and that his wife's name is Barb. With this info, I can look him up on the web and get his number very easily (his wife's name just comfirms it). A serious stalker would probably have at least three other ways to do this.
Now cell on the other hand...Jon Blakemore
Luka, best time is after 5 PM. My personal number is listed in the book anyway.
Yep, I trust everyone (well, almost) until given a reason not too. Sure, I get burned once in a while, but those who burn me are in more trouble than I because of their attitude and the life they've made for themself. I really feel sorry for them. Besides, let me just say that I'm a very vindicative person and very imaginative.
Like one of my favorite Presidents, "Walk softly and carry a big stick"
and keep smiling.
Excellence is its own reward!
Excellent! We have a seminar until 11:30 on Thurs so we should be able to make it @ 12:00. Look forward to seeing you.Thanks for the number
Take good care
Candi
on the other side - everyone says "get at least three quotes on work to be done" Should I expect to pay 3-5% non-refundable, not towards project on each quote I get? I understand your evenings and weekends are valuable, and I understand that you are doing work and time on something that may not net you anything. I guess my question his more, how do you guys sell your businesses (i.e. show off your work and make me want to buy from you instead of the next guy) you don't have a showroom, you don't have a lot with prices posted in the windows. As a consumer I've used extimate getting as a way to shop for someone I could work with, liked their quality, could afford, etc. Is doing estamates - that don't yeild any money - just part of not having to spend money on a store front? and when it comes tax time do you claim it as an advertising expence? Don't yell at me, I'm just askin' and truly curious.
I for one would like to take your call here . I would keep you on the phone as long as comfortably possible until I could grasp enough imformation and common ground with you to make a pre -decision about your job, and you. If I was sure that you "had" to have the cheapest price , I would let the competition have a shot at you , without turning you down. At least , I want you to be introduced to the way things are done before I speak to you again . My competition could do that for me, for they would spend the time with you I would hope. "Im not interrested in the cheapest bid, but I would tell you Im pretty busy right now , you are welcome to call me back later when I evaluate my schedule." At that time maybe you will have a different idea about Number 1 priorities and if not , Im still busy. We dont work for but a small percentage of callers. If I was starving , with out any work, I would service your every need , but putting free time on the cheapest bid of three bids , isnt profitable business practices. Thats the management call that I would make.
Tim Mooney
If you want to get to know me and how I work, I'll bring a portfolio of jobs done and you can interview me, and I may even make recommendations of ways to solve your housing needs. That introduction is free. Frankly, most of my customers have already decided that I will be the one doing their work before they call me to come over, based on my reputation and work of mine they have already seen. There are ways to judge my quality without asking me to give you up to thirty hours of my time for free.
The idea of three free estimates originates from insurance companies and auto repair work. They don't even all require that any more. They have an adjustor that sets what they will pay. It is only if you disagree with him that you go after more estimates to refute him. estimating caar repair is a more precise science than remodeling or building homes. When was the last time you had your car repaired while you were still driving it? Does your repair shop have to work outside in variable weather?
No yelling, but thuink about it.
What do you do for a living? Make the translation.
Excellence is its own reward!
Cool, you're not reading my posts.
When you have a medical problem or a problem with your car, you take your "problem" to the doctor or mechanic - at "their" convenience.
Three years ago I had an electrical problem in my Chrysler mini van. I had my wife follow me to the dealer. Then she had to drive me back to the dealer when it was fixed. Now, about the "fix." It was a bad computer board. However, before they checked it I had to sign for an "Electronic Diagnostic" fee. That was $146.00 which took the mechanic about 15 minutes to perform. The computer board was an "Additional" $152.00. And again, I took my "problem" to them.
Another example: Call any appliance technician and tell them your washing machine stopped working. I'll bet my $100 to you $10 that there will be at least a $45 charge just to walk into your house and say: "Hi Mr. Cool. I"m Joe from ABC Appliance Service." From there on it's about $75 per hour.
You must understand that in the Service Industry, which is what we really are in, we have only two things to sell: Time and Expertise. We simply cannot afford to give them away any more than Wal-Mart can afford to give 1 TV for every one someone buys. While living in Michigan and my wife spent about $150 weekly at that local equivalent of a Publix, knew the managers and cashiers, yet even after those several years, each time one of my kids grabbed a pkg. of gum - at that time, about a dime - it was still "a dime" - not free.
Recently in Remodeling Magazine that has a Benchmark of the net profit of typical remodelers. Here are the results:
Sales > $500K Net Profit is 1.2%
Sales $500K - $1M " " is 4.3%
Sales $1M - $2M " " is 4.1%
Sales $2M - $5M " " is 5.0%
So where is all of that money the public thinks we've taking to the bank in garbage cans?
Finally, I stated in my posts that during the original sales call I give them a ball park price at no charge. During the first meeting they are interviewing me and vice versa. Besides, they probably were referred to me by a past client so they are already presold on me. But to perform the tasks, and time, needed to present them with a Professional, detailed, Specification & Cost Analysis - at no charge, is ludicrous. Further understand that when presented with such a SCA, you will have just received a very valuable "document" about your proposed project. It becomes the foundation from which you decide to go ahead, make changes, etc. It's like getting a detailed report about your body based upon several tests. Then it's up to you to authorize corrective action based upon the results of those tests - or not.
And I'm not angry at you either. I just want you to understand that the public has been getting one hell of a deal for hundreds of years. I don't look for "deals' and don't give "deals." I hire the best I can find and expect to pay for what I hire, and often, that includes expertise and time.
The problem with my industry its one word - fear. Most have the same fear I had shortly after I first started my business 32 years ago and an older brother, another professional, said to me: "You do WHAT for free?" "Are you nuts?" And I replied: "But Tom. NOBODY charges for Proposals, so how can I?" Well, it took me many years to figure out how. Actually it only took me about a week to figure out how. It took me years to get fed up with what was happening up until that point.
For an industry that's noted for it machismo, it's amazing how many of us don't really have the cahones we profess to have. So instead, we make excuses and rationalize. I know. I did it for years.
Fear. It controls our lives much more that we know or will admit too.
Bottom line - If you want something valuable, pay for it - and be glad that you found someone who is willing to do what needs to be done in order to present you with such a valuable, professionally prepared, "document."
Sorry; I'm back to rambling again.
Edited 10/18/2002 6:14:13 PM ET by Sonny Lykos
Piffin,
Thanks,
I guess it was the translation that I'm still trying to get my head around, new boss want to run things more from a business model than a service lab model, and I'm trying to think more $ minded. I run an antibody development lab for a biotech center at a university, the science is easy its the running a business that is hard.
That's why they don't hire scientists to run the office.
But in construction, in order to be able to stay in business to do the craftsmanship, we need to learn to make money at it too instead of running our butts off.
I'm supposing that in trying to devolpe a useable product, you guys run through hundreds if not thousands of 'failures' in the business world, each of those 'failures' need to be acounted for. That is what drives up the cost of certain medicines, along with the long testing protocol.
Now if every contractor fell in with the thinking that all jobs should be bid out and awarded to the low bidder, then each contractor should plan, on average to only win one third of the bids he submitted. Supposing further, that he fell in with the idea of providing all those bids for free, he would need to add the cost of three free bids onto each job. some estimates take longer than others according to size and complexity, but we could assume a minimum average of fifteen hours at fourty dollars per hour for three bids. That comnes to eighteen hundred dollars to add to each bid acrossss the board to cover the cost of 'free' estimates. On an average kitchen, that's five percent.
Now, either you pay for that as a customer or you ask the contractor to lose that much money on every job. Then he has to work extra hours at productive work to make up for the cash drain. His wife and kids don't recognize him any more. He gets burned out and quits, leaving a vacancy in the field for someone less qualified or creating a supply/demand imballance in the marketplace to drive prices up for the next customer.
Am I helping any?.
Excellence is its own reward!
I'll stick to science.