I just had another positive reinforcement of why we charge for Estimates…
of course , FIRST, we never give estimates.. only Proposals.
went out on a small structural job… take out a bearing wall and substitute a beam with no posts or one post..
took some measurements.. told them it could be done.. and i’d be glad to size the beam and figure the cost of the job…
all we need to get started is $300 for my Proposal…
they’ll get back to us…
i went to look this topic up and found nothing with “charging for estimates” in the tilte..
so i thought it was time to bring up one of or favorite topics.. and certainly something that has drastically changed our bottom line..
so.. let’s go ..
do you charge for estimates / proposals ? .. do you call them “estimates”..?
would you like to but think you can’t do it ?
what is your experience ?
Mike Smith Rhode Island : Design / Build / Repair / Restore
Replies
from the other side
first the terminology is always a problem
estimite, bid, proposal, etc.
too many people use the terms interchangeably
this is part of the problem
an HO may have an idea that they would like to pursue, but they have no idea what it would cost, so you call a GC and ask about it.
think it is well understood on this site that a remodel has many variables that effect cost. But to the HO, all those things aren't necessarily understood.
but they still need a ballpark to know if they can proceed. They can afford about $10K, but can't afford about $50K
so I would suggest this thread include that thought.
_____________________________
bobl Volo, non valeo
another thought
when you pay money you have to feel you are buying something
so as an HO what am I buying?
(I can write an answer to that, but posing it for the posts. EG in the original post removing a bearing wall is going to need much more effort than a lot of things)_____________________________
bobl Volo, non valeo
good point . bobl... Helen says hi .. and wish we had more time to spend with you and Kathy
in my FREE site visit.. i lay this out.. : we don't give estimates.. we don't give ballparks... we can give examples of other work and thier costs.. so the Prospective customer can draw their own conclusion..
our photo portfolio is helpful in this...(giving examples )
however i do make it clear that we do not prepare costs and specifications for a fixed price Proposal unless we are paid to spend the time to do it..
usually the fee for this is comensurate with the scope of the proposed work..
IE: the beam in question... $300 for a scope , with the beam sized two ways.. and a fixed price to do the work.. in our experience.. if they don't want to invest this amount in their project ( it's their house, not ours).. then they should keep looking for another contractor... no hard feelings
Mike Smith Rhode Island : Design / Build / Repair / Restore
It'd be a hard sell here. I have a customer who is actively scouting out leads for me ( they like the work I have done for them) and I think that to START charging them, would be a bitter pill..now maybe new folks (who were not "introduced " to me, by them) I might be able to do it, with a sidenote that if I am awarded the work, it gets factored in (which I sorta do, anyway, include a reasonable amount in the final price, for my "homework") .
But to outright say, it'll cost you to ask me how much it will cost you..sounds a little pompous to some of the folks I have met around here so far. That was also true in Western NC, mebbe it's a mountain mentality thaing,,,
I just had a tree guy come and give me a PRICE , not an estimate, not a proposal, not a BID...900.00 to trim a tree..I didn't haggle, I did ask if he gave a free QUOTE..B4 I had him come out, he said sure. This was the 3rd Co. that came out (the other 2 were unable to handle the scope of work, I TOLD them on the phone, it NEEDS a bucket truck, and is a BIG tree, they didn't believe me) None charged me a dime...
3rd guy gets the work, cuz he's the only one who can do it...price didn't affect my choice, the job did. Maybe, my customers will accept a charge, but for me, I won't risk offending them YET..maybe after I am here longer, and have a better/bigger following.
Spheramid Enterprises Architectural Woodworks
Repairs, Remodeling, Restorations.
a tree guy is a specialist.... if he can't PRICE a single tree job right on the spot.. he should find another line of work...
as to old customers.. you bet.. they have track record.. so MOST do not get charged for a Scope of Work & Proposal.. however.... SOME have proven that that is exactly what it takes to get them to commit.. so they get charged.. up front.. and i don't "factor it in " to take it out.. it is time i will expend on their project.. so there is nothing to take out..
as for old customers who are not getting charged "up front".. they are getting charged in the job price.. because it takes time to prepare their Proposal...with them we already have a commitment to each other... and the cost of doing their job will include the cost of preparing the Proposal.... if it amounts to nothing or no job.... then the next time they'll be charged up front again..
a lot of this has to do with how much work you have and how much you can do..
i cannot figure every job people want.. this is a great way of seperating those who want US.. versus those who are shopping price...
and as for mountain people versus "flat landers".. people are the same all over.. it is up to you to sell the perceived value of paying for a fixed price proposal..
if this is for a one item job... like putting a new roof on... you are not going to get paid for preparing a Proposal... but as soon as it gets complicated and you know you are about to spend 4 - 8 or more hours to prepare a Proposal....it is probably time to start figuring out who benefits from you preparing it... the homeowner in question...
or you could fold it into the cost of doing business and add it to your overhead and CHARGE all of your actual customers for the work you expended on tirekickers..
but hey, whadda i no ?Mike Smith Rhode Island : Design / Build / Repair / Restore
Hi Mike, Good topic.
I have been giving free estimates for years, but thought I should charge for the design work and drawings, then credit that cost if the customer decides to use us.
I spend a lot of time designing a 3d cad drawing of every deck I propose. The costs are broke down by component-deck,bench,rail,steps,lighting.
I get 80% of the jobs I quote, but that is because they are referrals.
"Rather be a hammer than a nail"
Bob
>>people are the same all over.. it is up to you to sell the perceived value of paying for a fixed price proposal..
I think this is a big stickin point for a lot of us so called entrepenuers......we may be good tradesmen, but many of us are lacking in good business sense and I for one disdain the thought of 'selling" something to someone. I guess I would rather flower up the wording and suggest that we educate or gently persuade our clientel into believing that my company is the best value for them.
I have a crappy attitude sometimes when it comes to this, 'ya wanna hire me or not lady, make up yer mind'. Well maybe not that bad, but I feel like babysitting some people. I have a couple of clients who fax me their specs and ask about how much and when can you start? Sure makes life easy, but gets me spoiled and lazy at the same time!
>>or you could fold it into the cost of doing business and add it to your overhead and CHARGE all of your actual customers for the work you expended on tirekickers..
ok..call me stoopid.......yer kidding right?? I thought that this practice was sincerely frowned upon??
EricEvery once in a while, something goes right!
>>or you could fold it into the cost of doing business and add it to your overhead and CHARGE all of your actual customers for the work you expended on tirekickers..
ok..call me stoopid.......yer kidding right?? I thought that this practice was sincerely frowned upon??
If you don't charge for proposals, then this is, by default, what you are doing.
Marine Engineer
"?? I thought that this practice was sincerely frowned upon??"
why?
you have an employee who has to get paid, if you can't charge their time direct, then their time is indirect (overhead).
even a one person company has the one employee who has to get paid.
course you can do like some big companies, pay them a salary (people think for 40 hrs) and expect them to work 100 hrs for that salary._____________________________
bobl Volo, non valeo
We do primarily small jobs. 1-6k. We just did a 75k remodel/addition. Largest job we have done to date. Our quotes are free. 3 times in the last year I have been given work and told (without asking) that some guys around wouldn't give a free estimate and they only to quotes from those that did.
I am not sure if I did or didn't get those jobs because of our free price policy but I can tell you that equated to 18k in work and I won't chance charging for quotes if it might lose me 18k a year in business. Just my take. Yours could be different. DanT
Bobl,
This is the quote from Mike:
>>or you could fold it into the cost of doing business and add it to your overhead and CHARGE all of your actual customers for the work you expended on tirekickers..
This is me:
ok..call me stoopid.......yer kidding right?? I thought that this practice was sincerely frowned upon??
I could be wrong but I believe from reading similiar threads in the past that this practice was advised against by the likes of Sonny et al.
Like I said, I could be wrong.
I did not suggest or infer that the practice was wrong, I am just attempting to clarify a point and gain some knowledge. I am not sure if Mike stated it tongue in cheek, or was serious.
>>course you can do like some big companies, pay them a salary (people think for 40 hrs) and expect them to work 100 hrs for that salary.
I lost you there.
EricEvery once in a while, something goes right!
Sonny is a big advocate of charging for quotes/props, tho he calls them SCAs, IIRC.
He believes in the direct charge approach, charge for prop.
Lots of big companies hire their upper/muddle levels on salary. Lawyers often do too. This means you get $X/wk, no matter how many hours you work, and they often expect that you will work 60, 80, 100 hrs a week.
that is in effect what some in the remod etc business do here by not charging for their props or not including the cost of prop prep in their overhead.
so folks need to think about their business choices. what's overhead, what's not, what's done on salary.
where you are location wise, and your specific business are factors in making that decision. things like how many props you will put together in a time period, how long they take to produce etc. like Mike said giving a figure for a roof is a lot differnt than figure the cost of taking out a bearing wall.
so part of it is deciding how you treat your employees, even if they are only you. pay them salary or for what they work, or piece work or commishon
Personally, I don't think it is appropriate for everyone. But I don't think giving free is appropriate for everyone. all the things need to be considered._____________________________
bobl Volo, non valeo
Thanks for clearing that up.
Eric
Every once in a while, something goes right!
Do you decline if an architect "invites" you to bid on a job for which the plans and specs are all complete? I mean really complete. Structurals, specs, finish schedules, lighting, plumbingware, hardware, etc., etc. Nothing left to pick but some colors and maybe decide whether the flooring is red birch or cherry.
In a situation like this, how can you charge for a lump sum proposal, if your competitors are not?
bob... i don't get asked to bid on most architects proposals...i'm not on their call-up list...
most architects here are doing new construction.. we're not..
and ... those architects that are doing renovation & additions are competing with me.. so why would they feed me ?
if we get involved with new construction, it is usually by referral... and i have to qualify our customer....
i've found that just as you are trying to sell your company... the owner has to be selling themselves also... for a good project , you need a good team..
the designer... the owner... and the builder... if it's not sympatico, it's not going to be the best way to spend the next 12 - 18 months of your life..
one way to qualify the customer is to make sure they consider you as a professional... if you hire an engineer, a lawyer, an architect.. you know you are going to pay... well... if they want me , they are going to have to pay...
and i'm going to give them their money's worth..
can they get it cheaper ?...probably.. will thye be as satisfied with someone else ? who knows... if they want me , the quid pro quo is moneyMike Smith Rhode Island : Design / Build / Repair / Restore
bob.... i showed you my Proposal... why would i treat an architect differently ?
they are using an estimating service to come up with a cost estimate..i'm betting the ranch....
most established architects have a stable of relationships.. you're either in...or out.. if you're out, you will be used to justify their selection of the in-siders... so.. go ahead... give away 50 - 100 hours with no compensation.. but don't come whining to me.. i've already been there and done thatMike Smith Rhode Island : Design / Build / Repair / Restore
on a job as clean as that, you simply add the line item for proposal in the bid lump sum - but that is if you decide to bid in the first place. The greatest majority of bid packages wil be decided on lowest price, rather than reputation and quality of service and finished product.
Genreally, I don't waste my time.
The last time I 'bid' a job, I didn't know I was bidding it. I was invited to review and work up an 'estimate' ( owners choice of word) for an architect designed addition. I met with the archy and made several suggestions for detail work and foundation tie-in. I met with owners to let them review my portfolio, and I had come highly recommended. These HOPs gave me the impression that they had already decided that I was the one doing the job and that they only needed to know what the cost was.
after spending nearly a week on the process, and turning in a proposal, I got a call a week later to inform me that they had given the 'bid' to another builder, a great guy and neighbor here.
Neither one of us knew we were bidding. both werre informed we were simply preparing an estimate. pete told me that if he knew he was buidding against me, he would have increase dthe price. if I had known I was bidding against Pete, I would have not bothered to spend time preparing the estimate, because my men make a good deal more than his were at that time, and the overall finished quality of product shows it. His work is fine - just not as fine, and I could easily guess what his calcualted labour rate would be. Knowing the HOs were looking at this asd a bid process, I would have known ahead of time, that i would be the high bid and lose the job. I could have saved a week's worth of work.
That was three years ago. Ihave learned in the meantime, and part of my introductory spiel is that I am not the cheapest contractor around, and that my product shows it. half the time, I can tell from the look in their eyes after that statement, whether they are still interested in spending time with me.
I have not 'bid' a job since then, and my income has domne nothing but grow, along with my reputation. I used to once be amoung the crowd saying, you can't do that way were. Fact is, there are ten 'contractors' here for every one who suceeds in hitting the good jobs.
While Mike and Sonny both point out that we 'sell' ourselves into those bigger jobs, before we have a chance to make that presentation, we need to 'be' the quality comntractors that high enders are looking for. Quality workmanship. professional image, communications skills, dependable and mellow... Man, I could fall in love with myself! LOL
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
edit:
pfn... you don't tell all of the truth.... that you've got carole watching your back..
but yes.. i do know where you're comming from....
you lost a week..... i've had numerous jobs putting together proposals where i lost 100 hours or more... it took a long time for this dumb mick to figure out that conventional wisdom about "free estimates" had to get another look..
no way , jose'... if you want me... pay me
and .... of course.. when you get the sit-down... you have to present yourself and your company so the customer will think this going to be money well spent.. which it is...
truth and humility never hurt....
Mike Smith Rhode Island : Design / Build / Repair / Restore
Edited 9/9/2004 8:11 pm ET by Mike Smith
Like a good sweet and sour sauce - I like the right mix of humility and pride ( with a typo, I almost said humility and price)
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
pride ... and .....price
kinda go together , eh ?Mike Smith Rhode Island : Design / Build / Repair / Restore
I'll second that. I love you too!
I've said this so many times I know I sound like a broken record. OK, I am a broken record, but I'll say it again cause it's that important:
The #1 piority for any contractor is to become a "the" Brand Name within his locale & niche, and to do so ASAP. Once that is done, all "bidding" ceases, because as far as your market is concerned, in their perception, competitors of your caliber do not exist.
You will have positioned yourself as "the" contractor!
say Hi to Helen from Kathy and me.
youse guys had a lot on your hands so not getting time with everyone is understandable.
we really enjoyed it_____________________________
bobl Volo, non valeo
hey Mike ...
I'm typing this after reading just the first 3 posts to your thread ...
wanted to get it in before I forgot what I was gonna say ...
U said about how you lay it out ... nothing's free ... have the pic's as a reference ...
Next Fest .....
we gotta have a coupla "live demo"s .... of the first sales call.
What ya think? Would make for one interresting ... educational ... and fun demonstration. In all those sale classes I hated "role playing' .... but I'd be willing to play myself ... if U are. I thunk it'd be cool to see several different "methods" ...
btw ... I'm not up to charging yet .... I know ... yer disappointed ...
I got no belt loops ....
JeffBuck Construction, llc Pittsburgh,PA
Artistry in Carpentry
ok .. read thru it a bit.
I'm not too bad, now that I think about it ...
I spend lotsa energy "prequalifing" .....
not so hard to do ... hard to explain how ... years of sales background help me ...
now that I think about it ... I have started to charge for estimates ...
last two "big" jobs I got called to look at ... both realtor referals ...
so I went in asking lotsa Q's ... as in .. I don't trust realtor ref's!
one had all the right answers ... one .. all the wrong.
The "wrong" lady .... I went back to the van ...... guessed at the various trade numbers ... called back ... said ... $18.5K. This for for a basic add-a-bath ...
She said ... Something in writting? I said ... no. I don't think yer serious. I'd need $500 to write it up ... so I guess I have started charging ... just haven't gotten paid yet?
Found out they came up with the idea to get prices ... then attach it to the sales flyer ... so "who ever buys it will have U build it" ...
uh .. yeah. Sure.
So I guess that was my free first visit.
Second one ... another add-a-bath ... this time ... $44K. Lady didn't blink ... said something about working on their new house after this one sold ... gave all the right answers ... never got a call back.
But ... I also never bothered writting anything down. Called my buddy Joe ... the worlds best "ball-parker" .... who I planned on having help me split this job ....
he came up with ... between $40 and $50K ... in 15 min of walking around the house.
Man, I wish I had his experience .... and memory of names and numbers ...
Then went home ... and in one evening .. probably 4 hrs ... came up with $44K.
matched against his numbers ... I felt that was good enough. Wasn't down to the last nut and bolt .... but with Joe's backing .. it felt good.
That fell thru too ... the lady started asking good Q's again ...
But got offended when I said I'd need a start check and signed proposal to get on the schedule ... so I was kinda/sorta charging .. as I wasn't putting anything in writting till I collected ... and made sure she was serious ...
Then she asked why pay a start check ... don't U have lines of credit with suppliers ..
at which point I said for a quick start job I'd need 40% down ...
it was a test ... either she or I failed .....
as she never answered my calls since ....
One thing I have consciously started to do .... just go with my "quick and easy" bid ...
I'll probably switch back after being burned ....
But I'll come up with a "ball park fig" ...
then spend that 100 hrs adding and subtracting ... and end up being right where I started.
So for the time being ... I'm saving the trouble ... and I'll ballpark with confidence.
as long as Joe is right there beside me ....
btw ... sometimes I pay Joe a 6-pack to take a drive out of his way after work ... or buy him lunch and I drive ... for his estimating service ...
well worth it.
he can look at the outside of a building ... tell him the level of finish ... sometimes name the appliances ... and he's right on the money.
JeffBuck Construction, llc Pittsburgh,PA
Artistry in Carpentry
I'm fortunate in that what I do is quite easy to ballpark. I do that on the first visit and then try not to spend any more time there. I know I'm not going to get a firm commitment on the first visit, so I try to give them the infomation they want (the price and what they will get for it) then leave them to think about it and get back to me if they want to.
If and when they do get back to me then it is 95% certain that the job is mine and I don't mind spending more time on them. This system works fine for me, but I well understand what the guy's who do more complex stuff are saying.
John
c'mon jeff.. you like challenges.. challenge yourself to ask for a fee for your next proposal.. rehearse it .. and then sell it.. just like everything else..
and put it in your bag of tricks..
the next cold call that you want to qualify.. trot it out a give it a run around the track..
you're gonna love it when it take shte bit on the homestretch..
and don't fudge it by selling design services ..
just a nice fixed fee Proposal..
and don't forget.. when they ask if you will credit it to the cost of the job ?
ahem... "that would be dishonest.. the fee is for services i will have already performed on your behalf....
so if i give it back to you .. i will have to make up for it someplace else on your job"Mike Smith Rhode Island : Design / Build / Repair / Restore
Jeff, next time someone asked you if yo have lines of credit with suppliers, say: "Yes. But what you do't understand is that when I buy something for your project, and put it's cost on a line of credit under "my name", I' m actually acting as a "broker" for you. I become the in between person. If osmehting happend to you project, you, or me, I'm still stuck with the "legal" responsibility to pay for those materials. Meanwhile, since they are now on or in "your" property, you legally own them. So you own them but I incure the debt for them." "Nice arrangement for you. Bad arrangement for me."
That one is called 'risk management' and it is a principle of business that the risk takers are the money makers. Why would I want to plant a seed on your property for you to harvest without some sort of realization and benefit.
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
Piffin, you're right. Good, no - EXCELLENT analogy!
BTW, son Peter just decided to start charging for Proposals. What made the change in heart is that he's here and just notified mBarb and I that he is now in that group like many of us, who next month will start paying a mortgage. The house is a two story (above ground pool) that needs a lot of remodeling, but it's his.
Single parent with an 11 year old son and I'm thrilled for him, for both decisions.
"Time" has suddenly become more valuable to him.
Jeff,
somewhere in this thread you mentioned playing at this estimate thing at a fest. would you be interested in my starting a thread about looking for an "estimate" and role playing back and forth here?
I know it is not the same as doing it face to face, over the phone etc. but who knows.
I have three potential subjects to use.
I'm not trying to limit this to you and me._____________________________
bobl Volo, non valeo
well .. yeah.
But I'm no good over the computer screen ...
I work best with a live audience sitting at a kitchen table!
but sure ... count me in.
I'll be all hopped up on Sat ..... gotta go see some live punk music late into Fri nite ...
then spend all day Sat with a set of prints ...
so I'll be fulla ideas come Sat evening .....
JeffBuck Construction, llc Pittsburgh,PA
Artistry in Carpentry
I'll title the thread
Mr contractor we want to ...
hope others join in
http://forums.taunton.com/n/mb/message.asp?webtag=tp-breaktime&msg=47606.1
_____________________________
bobl Volo, non valeo
Edited 9/17/2004 9:58 am ET by bobl
as i've been reading these various threads on the topic, a question came to mind.
maybe it was answered somewhere
do you pay your subs for their bids/proposals?
or is it the niche/location of the company that determines if charging is appropriate?_____________________________
bobl Volo, non valeo
I do not offer to pay them, but I did pay one for his Proposal
If any do start asking for them, I would gladly pay, and for the same reason I charge.
If it ends up while I'm still working, that most subs start charging, I'll just change my marketing tactics. It would probably include something like:
" Mr. & Mrs. Smith. During my initial consultation with you I offer at no charge, a ball park price on your project based upon what you have in mind. Here's' the next phase. I create another appointment between you and I, plus the electrical, plumbing, and drywall contractors here in your home for an assessment of existing conditions and what we want to do, and critique the scope of work. These other "professionals", as myself, will charge a nominal fee for their time and expertise. This is mandated before going on to the planning and design stage."
If during that first incoming call, they decide to not go along with my procedures, so be it. It has cost me maybe 20 minutes of my time. And yes, I know I will lose some projects, but one in the hand is still worth a potential 5 in the bush. I'm just to busy, so when time becomes even more of a premium, I must judiciously guard it's use so it's the most productive.
I don't.
haven't been asked to either.
But ... I think I see a difference ...
I only cal them in when I'm pretty sure the job has a shot.
Never until I get the feeling I have a good shot at selling it ...
and ... I use only one plumber ... one electrician ... one HVAC ... one painter ...
unless they are so booked they absolutely can't fit me in ...
which seldom happens.
so it's not like a HO getting 3 bids and trying to see if they can get a $60K kitchen for $20K ....
some of those "sure thing" jobs fall thru ... but I'm never have them look at something I don't plan on having them do.
That ... and being specialized .. they can usually work up a price as soon as they find a calculator ... except for my plumber .... he has a price by the time he walks back to his truck.
JeffBuck Construction, llc Pittsburgh,PA
Artistry in Carpentry
I think professional remodeling contractors who have good design expertise should be charging for estimates, but only in the case of dealing with a HO who has not nailed down a scope.
I also think design-build GCs doing new construction custom homes have a right to charge.
For a healthy-sized remodel, where the HO has invested a lot of time with qualified design people, and has reduced his intended job down to a well-conceived set of plans and specs, I think the remodeling contractor, no matter how qualified, how backlogged, how in-demand, how well-referred, is going over the top in asking to be paid for his estimate.
If a sub's scope all looks like "been there . . . done that" there of course should be no charge for his estimate.
no.. and i don't charge them for selling their job for them either..
as long as they're treating me and my customer fair.. they're in a no-bid situation..
every once in a while.. i get a 2d quote.. especially if the price is a lot higher than i've had from them for the same type workMike Smith Rhode Island : Design / Build / Repair / Restore
Mike
Fine line in charging for estimates especially for newbe contractors.
I wonder how wealthy all the builders that "claim" they always get paid for proposals/estimates are.
To me it comes out in the wash one way or another and bobl brings up a good point about paying our subs for estimates.
Sonny claims he'd pay them if they asked him to....hmmmm.
Why not put his money where his mouth is and pay them even if they don't ask?
Ethical is as ethical does!
Be well
####The secret of Zen in two words is, "Not always so"!
http://CLIFFORDRENOVATIONS.COM
Andy,
I don't think it's a questions of ethics.
I asked because I was curious, and how it related to the work.
remember the DoD's $600 hammer? it got to that price because of markups, the sub's, sub's, sub's... actually provided it and everyone applied their markup. the charge for a propsal could become a significant portion of the cost of the project.
think some of what Jeff said, how much time is involved.
another thing is a person's business model, where costs are charged as overhead rather than direct cost. and the local competetive market effects that._____________________________
bobl Volo, non valeo
andy.. i really do pre-sell my jobs for my subs..
i give them a breakdown of everything.. and i walk the jobsite with them..
most of them spend less that 15 minutes on a quote..
since we do all of the laboring and carpentry, the most complicated part of our job is in-house
my subs are excavation, formwork, electrical , plumbing , heating , HVAC, plaster, sometimes painting, masonry, vinyl and ceramic tile floor..
we do the rest...including evrything that falls thru the cracks....
those trades above , with the exception of maybe excavation.. can generate a quote by unit pricing... so they spend very little time doing it..
anyways.. if you want, i'll be glad to do an estimate for you at a discount.. say $1K...
and if you want .. i can ask my subs to charge me for their quotes and i'll add that to the $1KMike Smith Rhode Island : Design / Build / Repair / Restore
Sonny claims he'd pay them if they asked him to....hmmmm.
Why not put his money where his mouth is and pay them even if they don't ask?
the answer may very well be ...
I believe Sonny has said once or twice ...
he's a businessman.
Jeff
<<<<I believe Sonny has said once or twice ...
he's a businessman.>>>>>
To me...in business, you get back what you put out usually....so I don't understand your equation.
Ethics builds businesses IMHO not just talk.....at least it does with me.
Jeff....do you tip a driver that drops off a large load....I do....tell me the differance please so I might be enlightened on what a "businessman means".
Be well Free
a
The secret of Zen in two words is, "Not always so"!
http://CLIFFORDRENOVATIONS.COM
Thanks, Jeff. Andy is being cute. According to him if I don’t automatically pay subs for their bids I’m being unethical. That’s his contention.
So now it’s MY responsibility to tell each sub that I WANT to pay them for their bids so they MUST tell me in advance how much their bid will be. Do I have that right, Andy?
Let me tell you how ethical or unethical I am. Twice in the last 6 months I had an air conditioning company come to my house to service a problem, and the 2nd time I argued with the owner about invoicing me. Both times the owner refused to invoice me. The reason is because they do so much work for my son Tom. I now have a different company that Tom does not use, and who invoices me.
So, am I being unethical for not allowing this man to show his appreciation for getting so much work from my son? Perhaps I should have forced him at gun point to take my money.
On another note, last week I had a plumber go to a customer’s house to check out moving a complete bathroom. I told him that I included $100 in my ball park price to her (which she accepted) for his site evaluation. He said “No†since he will schedule it for when he’s in her development anyway. If he does not value his own expertise and “consulting†time, which is what it would be, should I fire him for not taking the $100?
I cannot force anyone to become professional business people. I can only suggest. And I will certainly not just “throw†money at anyone, either. As Jeff stated: I am a businessman, not a philanthropist.
Also on another note, I have two people I occasionally use when backed up. One guy told me he charges $35/hr. I told him I’d pay him $45. The other guy told me he charges $25/hr. I told him I’d pay him $30/hr. I told them both that they were worth more than what they were currently charging.
So Andy, please do not be so cavalier as to imply a person you do not know is unethical simply based upon one issue that is a dubious issue at best.
<<<So Andy, please do not be so cavalier as to imply a person you do not know is unethical simply based upon one issue that is a dubious issue at best.>>>
Sonny
I dont know a real lot.that I do know.
Another thing .What I DO KNOW is...youre a sincere guy with a strong heart and from all the years I've sorta known you......in spite of our political differances..you've been very genorous in spreading your wealth of information.
I think of you often actually when someone comes to ask me for a FREE estimate.
Personally as I've said in the past.....
If its an estimate/proposal(oiy) that will take me "hours upon hours" than you're even more in my thoughts.
For instance....from my past posts.
I "offered" to pay a sub for an estimate just recently because I knew he was highly versed in landscaping and knew it would take him hours, especially with colored renderings.
Even told him that my starting budget was fifty grand.
Not many people talk about budget which is another thread within itself.
Well its a long story really but.......thats how "I" work and believe if you can work with the subs you respect that way it comes back to you usually.....I think its called karma.
I have a hard time with some of your logic about charging for estimates.
I have four guys coming to give me an estimate to hang copper gutters that I bought.
I offered to Email them pictures of the gutters, the house etc etc so as not to waste their time if I don't use them.
I do think its about ethics and the respect for ones time.
I do the best I can and try not to be slanted within my ethics.
Be well my brother
andy
PS....youre voting Kerry, right? LOL (kidding,,,,,did I make ya smile at least)? (won't charge you for that this time : )The secret of Zen in two words is, "Not always so"!
http://CLIFFORDRENOVATIONS.COM
You got a smile out of me. I really dislike Kerry, but I will vote for him only becasue I told me liberal peers here that I would. So Barb's vote will cancel mine out.
As for my “logic†about charging, not for “estimatesâ€, which I consider to be nothing more than a ball park, but for detailed Proposals, here’s another example I may have mentioned before, and who I got from another contractor here in FL.
Suppose you ask three CPAs to:
1. Come to your home.
2. Pick up your tax paperwork.
3. Take them back to their office to peruse
4. Prepare a Proposal based upon your tax paperwork.
5. Return to your home to present their Proposal to do your taxes
Remember, that’s from three different CPAs. How many CPAs do you think you'll get to do that.
Now let’s contrast that to an electrical problem you have in your car.
1. You take your car (problem) to the dealership or mechanic. They do not come to your home. Note here that you have to have someone follow you thee and then take you back home.
2. You pay them for anywhere from $100 or more (I paid $146), for an electronic diagnostic fee.
3. You pay the dealership not only for the diagnostic fee, but also for the actual repair charges (another roughly $200).
4. Once more someone has to take you back to the dealership to pick up your car and then you drive it back.
As I often tell our peers, each of us wear many hats, and hats that if we owned a large company, would have different people (paid people) wearing each of those hats. When working on a job, we are managers and tradesmen. Before selling the job, we are estimators, managers, marketers, salesmen, construction consultants, design consultants, product consultants, application consultants - all while at the 1st, 2nd and possible 3rd, sales meetings, even before we get a signed contract, if we even get one.
My point is that each of us must decide if he thinks he is a “professional†in our industry, or just what the general public thinks he is - an inept, ignorant necessity, and with any value at all only being displayed while manipulating a hammer, saw, trowel or brush.
Remember, there is a reason why no kids are getting into our trades and why in my 34 years in the industry I have yet to meet any parent tell me they were (or would be proud) that their son is a tradesman. In short we are undesirables. As such, I intend to get paid for every hour this “undesirable†serviced the public. Since I only do small repair and small remodels, and doing so at a minimum labor rate of $90/hr but up to $160/hr (I use a variable pricing structure), I’d say the public is indeed paying me to do what they do not want their own children doing, and that’s fine with me, because as our labor situation gets worse, my rates will increase.
Since the above realities prove we don’t get the respect, I say, get the money!
Sonny...if I may...offer an opinion. I'm not in business as a contractor bit I think you are dead on here.
I recall seeing an article in the National Asson of Realtors magazine years ago basically drawing the same distinctions between real estate agents and Bankers.
Thanks, TX
None of us can "make" the public realize what we really represent to them, so we cannot get them to respect us either. It can only be done individually and with individual customers. It's called, "Branding" my biggest issue to advocate. Until we, as an industry get on par with at least the real estate profession, we might as well help each other to "get the money."
In fact, because I occasionally get a new customer who is either shocked at my price or who thinks we should work for $25/hr, I'm in the process of creating a one page letter explaining about what the typical contractor/tradesman goes thru as far as beating our bodies up, working in freezing cold and sweltering heat, the morons in the public, etc. It will take a few drafts to get it just right since I do want to make it only a one pager - easy and quick to read, yet get my (our) point across. Then the next time I get one of those customers, I intend to hand them a copy.
Most people, including me, don't always know the best way to find a "true Pro" in any field. From auto mechanics to lawyers to body shops to handymen and remodelers to yard men. I tried to go from A to Z. Even the pros here have been stung by a sub or a GC from time to time I understand.
Whatever can be done to assist the real pros in being better at being accessable to the public and being recognized by the public, I think, would benefit everyone.
Your posts certianly are on the right track, IMHO.
Well, I've made a lot of mistakes in my 30 odd years as a contractor and it really bothers me as a human being to hear or see some of my peers leading grief laden lives with a lot of sleepless nights and scratching to cover the mortgage, rent, or payroll. Been there.
We all place our selves in enough situations without knowing it when we do. Why do it with our eyes wide open? And that goes for customers as well as contractors.
well, it's almost too late for me but I hope that a lot of young kids can grow up to run a business in the trades using the same philosophy of service and value you express and as ethically as you hold yourself out to be and exhort others to be.
Thank you, and after two TIAs, two heart attacks, one stroke and a recently implanted defibrillator, it's too late for me as well - to make any major changes anyway. Of course, that means I have only a finite time left to be a nag here. (-:
Now Sonny, That's not something I'd like to have to consider. I've only had the privledge of reading your posts a few months. I'm hoping that you live a much longer and fully productive life. I am sure it has been an interesting and good one and I know that you have a legacy here that will last a long, long time.
Thank you for those kind words. During my first heart attack at 44, the doctor told Barb I had a 50/50 chance of making it. After the second one the nurse came out and told Barb she had never seen this doctor spend so much time trying to save someone (3 hours) since I died three times on the table. So I figure God was not done with me. Can’t think of for any reason to keep me around other than to keep being a nag here and on the JLC forums.
Anyway, I hope someone else picks up the baton when I’m gone and keeps plugging away, making sure our peers keep their heads up high, proud of the roles they play in society as “problem solvers†and servants to the public even though they can sometimes be a pain, just as we are sometimes to our our friends and families.
We do good things. On a daily basis we solve a myriad amount of problems. What other industry takes it’s manpower, tools and equipment, and materials to the customers house to create a prototype - something that has never been created before? We must contend with personalities of our own staff, our subs or GCs, our customers, suppliers and their staff, building inspectors - nearly every aspect of our construction society. And we must interact with them all successfully if we are to be successful. We beat the hell out of our bodies. We sacrifice private time with our families to spend time with our customers. We erroneously scoff at safety procedures to get jobs done quicker. Rarely do any of our peers betray a trust, yet we are betrayed often. We dig holes for ourselves, yet fight to climb back out. No one but another of our own understands our fears, hurt, anger, frustrations, or the tears that have flowed.
There should not be a single one of us who is not proud of what we have chosen to do for a living.
It may sound corny, but without us everyone would still be living and working in caves. Regardless if we are very smart, or of average intelligence, educated or not, clean cut or not, wise or not, fat or skinny like me, we are still society’s very unique men and women blessed with special talents, and are indeed the men and women for all seasons.
God bless us all, and our spouses for putting up with us!
Hear Hear Sonny.
I had grand ideas...for my employees when I first went into business many many years ago. Then, the realities of our "business" set in. Sadly, there's not many guys that can even cover their own carpenter wages...but that doesn't stop them from doing anothe deal.
I like your attitude Sonny and I have learned a great deal from your posts. Just let me know when you die, and I'll take up the cause.
Send me a signal from heaven....or hell...whatever.
blueIf you want to read a fancy personal signature... go read someone else's post.
Blue, some of our peers are often cash short or newbies starting a business on a shoe string. So my will states that upon my death, my library is to be sent to Peter Bush along with $1000 to sustain it. Peter has agreed to make my books available to any who want to read any as long as they send it back when done. Peter will make a post here and on the JLC site of my trip to that great contractor heaven up there where will continue to argue with my liberal peers - for infinity. Bet they'll hide on me. (-:
Continuing on the purpose of this thread:
One of the major purposes of “net†profit is to receive a “fair†return on assets used in the business. It’s no different from expecting to receive a “fair†return on a 5 year CD, a savings account, etc.
The question in the mind of each of is to list exactly what is considered an “asset.†To do that, one must first answer the question: “What is an asset?â€
An asset is something that has value. It matters not how it was obtained or from where it came. All that matters is that it has “value.†So a car has value and it’s value is the amount it can be sold for less monies owed on it. Even if it’s a clunker that is paid for, if it’s worth $200, then it’s a “asset†with a “value†of $200. Tools have value, evev used tools.
Some assets are acquired, or obtained over a period of time. Upon receiving an MBA, you, the owner of that MBA makes you an asset, and an asset that carries more “value†than you would have if you only had a BA degree or no college degree at all.
A doctor, nurse, CPA has value once they become “certified†as such, and can then legally begin to practice in the industry that has validated them via that certification.
Some careers do not necessarily need a formal certification to make the person “valuable†and an “asset†to the buying public. Such would be the case for an employee of a landscape company, who after 10-15 years learned the equivalency in “experience†of a formal education. Working those 10-15 years as an employee, which means a lower income than the owner and doing all of the grunt work, cost that employee in time, reduced income and surely took it’s toll upon his body, was his/her “cost†of education and certification. The same thing goes for a cleaning lady before forming her own home cleaning company.
Going back to the issue of “assetsâ€, one must realize what an asset is, what it’s worth, and how to obtain a fair return on the assets in general, but as important, how much of a return on each asset individually.
In my case, I’ve reflected and written down, what it has cost me in time and money that has elevated me in value as an asset to my customers or my market. And what am I doing now that constantly increases my value as an asset to my customers. One item is my perpetual research of materials and application methods - about 4-6 hours weekly.
So, trades people work for wages, just as any “employee.†And even as an employee for his own company, he still takes a “wage†but in the form of a weekly “salary.†Businesses, unlike employees, however, “exist†to produce profits. And profits really do two things:
1. They “recapture†the “costs†(overhead) of a business operations. That’s why overhead is sometimes referred to as “operating expenses.â€
2. Profits also produce “net†profits. Net profits is a part of what's called “gross†profits. Gross profits really include those overhead costs “and†net profits, so the term “gross profits†is really a bad term IMO since all of it is not “net†profits, but instead mainly recapturing those costs of doing business.
After discussing what “assets†are, we should then discuss the purpose of “net†profits and why they are the foundation of any business, but again, back to assets.
The previous tradesman turned business owner must of our survival necessity, recognize that his time, which is finite, is recognized as valuable, and as such, must be judiciously used, or “sold.†We are not retailers selling "goods." In any given day only so much time exists that can be “sold†to the public, and “sold†to the public in many ways. It matters not in which way since again, there are only so many hours available. Time then, and the “expertise†associated with and/or expended with that time, becomes the most valuable asset of not only the tradesman, but the business owner as well. This realization is critical, because it makes one realize his or her true value within the market place and to himself.
So one must think twice about “time†spent straightening out one’s truck, garage or shop. “Time†spend driving to a job site or a sales call. “Time†spend working up a Proposal. Time spend picking up materials, or going on a service call for warranty work.
Time, time, time, time and more time - and yet is shrinks minute by minute. And all of that above time spent is that much time TAKEN from either actual field work producing money, or with one’s family evenings and week ends.
Perhaps now one can understand why each of must realize that our time and expertise is our greatest and most valuable of all of our assets. Wages are the "return" for employees. Profits, in this case, is a "return" on our “time†(asset) as business owners must be realized. If not we become “business†fools. The reason is that employees get paid for each hour they work, and time and a half for overtime. We, as owners however, do not.
So if we do not, one way or another, maximize each hour we expend in our businesses, regardless of how, when, or where - we lose, and revert back to being “wage makersâ€, not “business ownersâ€. It is to each of us the responsibility to get paid for whatever we do that is spent in our respective business. Time flies far too quickly. And yes, being a business owner is a b*tch, but we have no other option than to act as one.
Nice posts Sonny.
I just did a small job today ducting the range hood out through the roof on a new house. I asked the lady when I was finished why the builder of the house didnt do it?
She cant get the guy back to do that and a few other things in order to get the final inspection work done. I told her that sadly it seemed to be a common practice these days.
I reckon it is poor ethics and told her so. She said words to the effect ' people dont forget these things'. How true.
After a nice talk with her i got asked if i would quote on her front fence. I might not get the job, but it is good to be asked.
I recently saw you post about working on a one page document to give to certain people who choke at our price. I thought that a brilliant idea so have started on one myself. I already think that when completed I might wonder myself why I do this job.
Ultimately I would love to know just where the tightwads would live, pee, wash or eat if it wasnt for the trades. I wish they would consider that before moaning about price.
It is like when you need a dentist. By the time you need one the pain is so bad you REALLY need one. Money is no object, just make the hurting stop.
When a toilet is backed up or a roof leaking, do they want Mr Cheap or Mr Competant?
Everything, 100% of it, depends on how you look at it.
DW
aj... your tag line..
<<<
Everything, 100% of it, depends on how you look at it.
DW>>>
the corrollary to that is ..
"it all depends on how you hold your mouth"
Mike Smith Rhode Island : Design / Build / Repair / Restore
I have said in the past that obviously there are no guarantees as to how long any of us will live. And for that reason, you should some how, any way, work up a plan or system, and use salesmanship to get paid for all of your time. I have told my sons the exact same thing for years. This may seem to some to be an odd post for this thread , but on the contrary, I think it is most appropriate.
This morning my 11 year old grandson (Pete’s a single parent) called me on the Nextel radio, telling me that his Dad was slouched against the dresser with his head on his hands on the dresser in his bedroom, his hands were blue and he didn't seem to be breathing. I had Michael call 911 while I drove there. The police would not let me in because they initially considered it to possibly be a crime scene.
The bottom line is that from going to his bedroom the night before with a really terrible head ache, and being found still dressed, the Medical Examiner initially thinks he died of an brain aneurysm.
Son Tom will take over finishing up jobs in progress and we’ll handle his personal affairs.
Thirty eight years old, looked like 25, a terrific sense of humor, and he had the world by the rear end. I post this only to keep my self going since as we all know, we parents are supposed to die before our kids. Besides, I’ve got to stop staring at his picture and expecting him to walk in any time. I’m glad that about two weeks ago I hugged him and told him how much I love him and was proud of him.
Take this week to reengineer your businesses and lives to spend more time with your own families. Business and customers should never, ever, take precedent over what’s really important in life - your own and those of your family. So if you don’t or can’t charge for all or your time, at least pay your self a hell of a lot to cover all of that time. You owe it to your self and your family. Value yourself, 1st! Without you, family lives are destroyed.
Fair or not, death knocks on our doors and takes whomever he wants when ever he wants. No, life isn’t always fair, but for you business owners, make it fair for you. Take control, and now. Even tomorrow could be too late.
Sonny,
Kathy and I extend our condolences and prayers to you and your family and especially to your grandson.
Awe geeze Sonny, so sad to hear that. Prayin for all of you.
Spheramid Enterprises Architectural Woodworks
Repairs, Remodeling, Restorations.
sonny.....Mike Smith Rhode Island : Design / Build / Repair / Restore
Sonny
How heartbreaking, my prayers to you, your grandson and the entire family.
Barry
Barry E-Remodeler
Sonny,
My thoughts and prayers are with you and the family at this time.
Tx.
Sonny,
May all of our thoughts and prayers be felt by you and your family.
May God bless Pete and his family.
AmenI Love A Hand That Meets My Own,
With A Hold That Causes Some Sensation.
My deepest sympathies Sonny.
Everything, 100% of it, depends on how you look at it.
DW
Sorry for your loss Sonny...
Life is not a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather to skid in broadside, thoroughly used up, totally worn out, and loudly proclaiming
WOW!!! What a Ride!
Oh, wow, Sonny.
Hang in there brother, we're all pulling for you.
My prayers will go out for Pete and you and all your family.
SamT
My sympathies, Sonny, to you and your family.
Scott
Sonny,
Deepest sympathies from our family to you and your family. Will be praying for you.
Sonny, I'm so sorry.... I feel like I know you and your family. That really hurts.
Our sincere condolences to you and the family.Remodeling Contractor just outside the Glass City.
Quittin' Time
Sonny, I am heartbroken and don't know what to say. I am so sorry for your loss. No one should have to bury their child. Let us know if we can do anything.
blueIf you want to read a fancy personal signature... go read someone else's post.
this is off of the subject,,, but a long time ago,, i think,,, it was you that posted something called fast framing showing a roof that was framed on a subfloor, sheeted, and strapped for a crane to set it (the roof) off onto a patch of ground while the walls went up and then the crane set it atop the walls making time on the overall time spent framing. was this you? do you still practice this? and,,,, if it was you,, out of curiosity, since i wanna try this,, on a standard 30'x40' building as a model,,,, how do you calculate wieght for the right size crane.
thanx in advance.
j. jordan
http://www.jjordanbuilders.com
wasn't me.
I remember the thread though.
I think I posted that we were thinking along the same lines on a barrel vault dormer ... but in the end just set the rest of the roof and figured out the barrel vault as we went.
Maybe if you start a seperate thread asking ... who ever the genius was will step forward if they're still here. I'm thinking it was quite a long time back?
Jeff
thanx jeff,
i actually have done a couple of smaller porch roofs, hip bays, and along the line of the barrel vault, a portico by building them on the deck, and with some of my less than enthusiastic crew, raised them into position, stiff knee-ing the smaller scale op. and wham-bamm,,, but whoever posted here before had some nice lokkin shots of the whole process on what looked like an 8 pitch no frills roof set off and re-installed on the house after the walls were up,,,, i'm gunna post here in a bit and maybe that feller can offer some advice on calculating for cranes,,, thanx for answering, at least i know i was not imagining the whole deal. take care
j. jordan
I've done that before but I can't remember if I posted info about it in a thread.
To answer your question, if you have the right design and the right site it can work very well. Obviously you're layout has to be precise on the walls and roof but if you're careful everything should match up well.
I would call your crane co. sales rep to get an idea about weight. More than likely your building size, site conditions, cranes available will form a complex dynamic that the unexperienced carpenter will not be able to anticipate.
Jon Blakemore
thanx jon,
so the matter was simply calling your crane op. and having him say whether it feasible. i'll try that. what kind of trouble did you run into on the op.? not withstanding the framing being off. i build from the ground up, including laying my own block so i don't anticipate any errors in my work, just errors that pop up as a result of miscalculation over what a crane could handle. my fear over going into it blind would be a snapped strap or cable, and the roof sitting in the basement. i tend to try and avoid insurance issues and just do things safe which is why i wondered how in the heck that original poster figured out the weight parameters. other than an engineer, and an operator that says "yeah, i b'lieve i can swing thayat", i'd like to know how the thing was calculated,,, given that each house is different. thanx again!
j. jordan
http://www.jjordanbuilders.com
bobl,
>>first the terminology is always a problem
estimite, bid, proposal, etc.
too many people use the terms interchangeably
I'm as guilty as the next on this one. I almost always call mine a cost "estimate" unless my customer asks for a firm "bid". Could you shed some light on the differences in the terms?
I build custom homes and the variables are many here as well. My clients always start out with "How much do you charge per sq.ft." My response is always "it depends on what you want" and then give them some examples i.e. brick vrs siding, wood vrs carpet, 50yr. roof 30 yr roof and so on.
If they ask me for a "bid", I ask them for a complete set of specs for everything from what type of subfloor they want to which style of door lock they want to window pulls, quiet fans or builder grade fans. Often they ask me to draw up a spec sheet which I charge them for and refund the money if I get the job. I haven't figured out a way to charge for a bid and don't know of any competetors who do. I also design many of the houses I build and provide a complete set of working drawings which I charge for up front. If I do an "estimate" I charge in the same manner. I had to learn the hard way to charge for these services.
Thanks to all for a great source of imformation.
k
k... we do design work also.. for which we charge..
but the design also includes a fixed price proposal...
this question of charging for "estimates" is just that...
i am going to build the job in my head...on my computer.. when i'm done i'll give them a "fixed price proposal"..
we make it very clear that we do not give estimates.. which may help to lay the groundwork for a positive response from the customer when we tell the we charge for preparing a "proposal"Mike Smith Rhode Island : Design / Build / Repair / Restore
"estimite, bid, proposal"
this is only one view
and to be sure you know where I'm coming from, I'm retired from Gov't where I did system acquisitions.
When I first started to put my 2 cents in here, the different meaning to the words became painfully obvious.
to me an estimite is an educated guess at what something will cost, may invovle some work to produce, but isn't necessirly the actual price it will cost.
a bid is a price a job will be done for, with some explination so there is an understanding of what will be done.
a proposal is a detailed explination of what will be done, inluding a price. how detialed the price is dependent.
from what I've seen is that estimates are often bids, that is, the price the work will be done for. this is , i believe, sometimes required by some states. as an HO, this bothers me. sometimes i think i want something done, but i don't know if i can afford it. i don't want to ask for a bid or proposal, but only an estimate. but i can't get it. estimates are really bids. not fair to ask for that much work to be done. but how do i know i can afford something?
been awhile since i've looked at the sites that supposedly gave you an estimite for work, but when i did a for info i punched in a new roof with and without gutter, with gutters was cheaper.huh?
and people get burned by giving estimates because some HO think they are bids, and when the contract has a higher number associated with it ...._____________________________
bobl Volo, non valeo
From a homeowner (and businessperson's point of view) PLEASE charge for something as detailed as a spec sheet. And agree to refund that into the work if you are hired.
I see all sides...architects, contractors, homeowners. I watch folks with each other on other houses. I have seem homeowners take a spec sheet from one contractor and submit it to others for bids. Not all homeowners would do this and there are some who would do it and not realize why it is ethically wrong.
But if you are going to invest a lot of money in detailing an estimate (proposal, bid, whatever)...then please tell a client how long it will take and charge for that. It is better than being surprised with change orders at the back end or having a contractor tell you, "I don't include that...that will be extra" when a project is almost over.
If you struggle with preparing bids and want to start the work without one (time and materials as you go), please tell the client and at least give a ballpark with a definite short list of what WOULD be included. Even if it isn't all broken out costwise.
I've had contractors sit for a few months on a bid because they're struggling with writing up a proposal and don't want to tell me. (This is after we've given them plans, sketches, specs, etc. I have a GREAT contractor...a real artist...who works like mad once he has begun but struggles with preparing bids. We love to use him. We WANT to help him prepare the bid. But he doesn't admit to the struggle. Tells us, "I've lost the specs, can you resend?" Etc. Etc. Tests my patience and my frustration level. Especially when I am trying to schedule things around him. He loses big projects because of this and we're lucky to get him. But if he had any competition on quality and I found them? Ummm. He'd be gone.
I wonder if past clients have stiffed him so that he thinks he HAS to detail everything. I'm all for paying for the work unless it is sloppy or incomplete. And I know enough about how it is done to know what's what. I just don't have the time to do it myself.)
JMO, your comments are all valid.
More contractors get themselves in trouble by NOT detailing all of the specs. And true pros even use samples. For example if I were to use 1/2 x 3/4 parting stop against a baseboard, I’d not only include a copy of it’s profile, but give them a 6†sample to keep as well. This is part of the time it takes for a “complete†SCA, and IMHO, the only way to let our customers know EXACTLY what they are paying for - and they whys. Like clear fir, or pine or popular for baseboard or casing instead of finger jointed trim - even trim to be painted, for example.
See, our industry problem is that tradesmen want to play business owner without knowing how to BE a business owner, much less a professional salesman, of which what I mention above is part of being a professional salesman.
They also hate paperwork so that exacerbates disorganization in the office or time management.
They like to ply their trade, not the aspects of playing business owner. I really feel for them because they really want to do a good job - on site - but generally do a lousy job in the office. That’s also another contributor to our 85% plus failure rate.
It’s like a guy falling in love and tells her that he loves here and wants to take care of her for the rest of their lives. But she is asking him things like: What do you mean TAKE CARE OF ME? Ar you saying I can't take care of myself? How many kids to you want to have? What are your career goals? Do you cook? Do you iron? Do you expect me to stay home all day taking care of the kids? Are you a spendthrift? Etc., etc.
And he’s thinking: “Geez. I just want to get married and do the marriage thing!â€
So, woe is the (unprepared) tradesman turned contractor.
Sonny,
You Da Man!
Far too many guys don't realize the business end of the business. Any monkey can say, " i need $1200 in stock, I gotta pay Lou and Joe $150 each day, and I wanna make $1000 too!" Big deal, what a genius. So he gets his thousand bucks and blows it. At the end of the month his "bills" come in...
If he had thought better of it, he would have realzed these "bills" are operating costs or "overhead" and would have incorporated them AND a profit into his price.
Another thing that kills me is the time i spend typing up proposals. Now Alot of guys in my area know I am a true professional and my estimates are very accurate. I spend ALOT of time on presentation from my trucks, to my uniforms to my proposals. There are ALOT of guys who tell customers "Call Fitzpatrick, get a quote from him and I'll beat it" (even my ballpark quotes are better than any amount of brainstorming they can do ) I'm 32 , been contracting since I was 21..Now i don't have my nose in the air, but God Almighty, you look at these guys and feel like sayin,Bathe!, Shave! Wash your clothes! Organize...whatever that is thats hangin outta the back of your truck! They have been contracting for 20, 30, 35 years and can't figure out why they cant get a break.
Thing is, I'm Just too busy for this noise! time is money, and homeowners better warm up to the fact that they gotta pay!
Edited 10/15/2004 12:50 am ET by fitzcarpenter
Edited 10/15/2004 1:00 am ET by fitzcarpenter
Hey Mike, Raining today?? Whatcha doing home at9am ?
Good thread for discussion. I’ve had a bit of a slow week or 2 and have been thinking a lot about all the great bus. advice that I’ve seen come through this forum. I only wish that I had a good way to put it all together to create a formula so to speak. I’ve also got some reading to do and I have a list that I hang on to, mostly suggestions from here.
I must admit that the info I have been able to absorb here is helping me change the way I do bus ever so slightly a little bit at a time.
I decided to stop giving estimates years ago, and only provide proposals. Probably about the same time some of you decided to start charging for proposals! I thought I was way ahead of the game, and to some degree I was. I had caught a number of glimpses at what my competition was providing and I knew I could improve on that. I decided to provide detailed, clearly written (typed, computer) proposals.
The response I received was VERY positive. Potential clients no longer had to guess or call back repeatedly to figure out what they were and were not getting from the GC. I was bagging some good jobs just from the presentation of my proposals. At that time I was doing a lot of kitchen installs and the proposals were fairly easy to generate, I knew what my costs were and did a lot of cut and paste from one proposal to the next. As the nature of most kitchen installs entailed little or a minimum of structural or highly specified work, and drawings for the most part were supplied to me, I thought I was doing good.
As the nature of my work changed or expanded, I found it more and more necessary to get involved in specifying materials, fixtures and structural elements in these proposals. That is where you will get pinched providing them for free. It is one thing to do all this at “no charge†as long as the cost of all the leg work is ‘rolled’ into the job and you do actually get the work. But this type of system is not a system at all, and sooner or later not charging for proposals catches up with you.
I have only to date been successful at charging for a few of the proposals that have gone out lately. I have been doing A LOT of work for one client, and knowing that I will be doing the work as long as the price is fair, it makes no sense to go that route with this particular client.
Recently though, I prepared a detailed proposal for a prospective client, a good client of my wife’s, only after getting a go ahead with a verbal quote. As the relationship seemed well established at that point, I went ahead and invested over 20 hrs in drawings and specifications, including bids from subs only to have them pull out. You may recall reading about this in a couple of threads I started not to long ago: Negotiating $, and 1099. OUCH!!
So here is what I would like to see discussed in this thread:
How do you go about changing over to charging for proposals from not?
Do you charge your old and loyal past clients for proposed projects when you have not in the past?
Just what methods work, or how do you persuade or convince a new client to pay you for a proposal?
Once paid, just how detailed are these proposals, and who owns them at that point. Is the client entitled to cc all his prospective GC’s with your spec package?
And one that I think has been largely glossed over…….I've seen it time and time again on this subject, and I DO want to force the issue……â€if they don’t want to pay for the proposal then walk away†Yeah, but ya gotta eat!!
So, I guess the sub-question would be; how do you decide when to try to charge, you can’t just wholesale decide to charge across the board and then find that this is not working as your watching the repo guys drive away in your truck!
This is a great subject and I know it has been discussed at length from time to time, but review is good and folks are always coming up with new ideas or angles to the same situation. I for one greatly appreciate the sharing of ideas and the fact that there are those in the know who are generous enough to take the time to share.
Thanks Mike!
Eric
Every once in a while, something goes right!
Edited 9/9/2004 10:25 am ET by firebird
Edited 9/9/2004 10:31 am ET by firebird
no rain .. it only rains at nite here , remember ?
you don't have to charge for every Proposal.. but you should make it a standard practise.. then make exceptions...and let them know that you are making an exception..
here's a copy of a Proposal for a Proposal i brought with me to a meeting with a prospective client.. we looked thru their plans.. toured the site.. discussed the project.. i made a very favorable impression .. i let them read the proposal.. they agreed it was fair...
and that is the last i ever heard from them.... they were ready to get started.. that was 14 months ago.. they were not ready to get started .. but the "successful " contractor has been dogging that project ever since...
my little Proposal to do a Proposal saved me one heck of a lot of money.. i have no regrets on that one...
same thing with another $400K project .. they were ready to go... didn't want to pay for my Proposal... they stuck with the first contractor for a year. after our meeting.. never got out of the ground.. this is two years later and they are just getting started...
another case of our policy saving us a lot of grief...
those are the "unsuccessful" examples of Charging for a Proposal..
here's a sample of some wording we have used...
<<<
Specification & Proposal Analysis
It is the intention of the parties to enter into an Agreement for services.
M. F. Smith Associates, Ltd. will provide consultation and coordination with the Owners , their Agents, The Architects, Septic Designer, Building Inspector, and Zoning Officials.
We will produce Preliminary estimates of Construction Cost, advise as to local methods of construction , maintenance, and longevity of materials. We will meet with the Owners , their Agents, and Architects in developing Final Construction Drawings and Specifications. We will also meet continuously with our Specialty Subcontractors to incorporate their best practice into the Specifications.
At the end of the Design and Specification phase we will produce a firm price and Construction Proposal .
It is anticipated that we will expend approximately 100 hours in the execution of the above.
The Owner agrees to compensate M. F. Smith Associates the sum of $3000 for these services and documents. Sum to be payable as follows: $1000 to bind this Agreement. $1000 upon completion of Preliminary Drawings and Specification, and the balance of $1000 on submittal of Final Construction Proposal and Specifications.
For the Owners:>>>>
as the jobs and scope gets smaller... the fee can get smallerMike Smith Rhode Island : Design / Build / Repair / Restore
>>you don't have to charge for every Proposal.. but you should make it a standard practise.. then make exceptions...and let them know that you are making an exception..
Good point, I feel better already!!
>>and that is the last i ever heard from them....
>>my little Proposal to do a Proposal saved me one heck of a lot of money..
>>another case of our policy saving us a lot of grief...
Mike, i get your point, that you disqualified a potential bad relationship. And I guess that goes along way towards suggesting that paying for a proposal is good tool for 'qualifying' clients.
On the other hand though, not having heard from these clients after an initial visit, wouldn't it have been prudent of you to at least follow up?? And you have only presented a positive side of this equation. Is it possible that you have lost out on some potntially rewarding projects because the ho was turned off by the suggestion of paying for a proposal??
EricEvery once in a while, something goes right!
Good thread.
How would you compare being compensated for preparing Proposals to collecting a retainer as a Design/Build firm does?
Is it apples to oranges or is it pretty much the same thing.
At what point do we actually become a D/B company?
Is Mike's Proposal for a Proposal similiar to what a D/B firm uses?
EricEvery once in a while, something goes right!
I can only relate to my little market. Most everything new or remodeled where I am is built cost-plus, and the builders don't charge for proposals.
But I am talking about the upper end housing market, of which there seems to be plenty here. We have nothing really in the middle, our county being one of the poorest in the state. For housing for the residents to live in year-round, many locals build their own, or hire "bandit" carpenters (cash, no WC, no insurance, just a truck and tools) to do their work.
But for the vacation home crowd (we call them 212ers), we have the upscale builders. They will pitch a customer prospect by showing him some of their super-high-end great-camp lake houses recently completed, talk in per-square-foot terms, and try to set the hook. Those numbers begin at $250 and go beyond $400.
If a "let's agree to agree" mood is reached, the builder will go to work on the plans, and come up with a quite detailed "max cost" proposal. But I don't know of, or cannot even imagine, anyone charging for this here.
I charge for Proposals, or as I call them "Restoration Project Plans". On most, if not all cases, the work involves several phases of work. I just did a 15 page plan for a major restoration of a Victorian house in
Lowell, MA. The work included rebuilding 2 porches, rebuilding the back porch into a Victorian porch, structural work on the carriage house, and other work. On these projects, I'll spend 1/2 a day just at the client's site taking photos and notes, and discussing things with the client. I'm up front when people call, and inform them I charge for estimates, and it helps to weed out the "tire kickers" (New England has a lot of them). Of all the people I've had to charge for "Restoration Project Plans" in the past few years, out of 6 clients, only 1 didn't follow thru. FWIW, on my firm's web site I have a "sample project" plan that helps the client see what's involved.
Joe
Renaissance Restorations
Antique & Victorian Home Restoration Services
http://www.renaissancerestorations.com
Had a neighbor/friend ask me to finish off the basement of his addition. Told him I was already committed to other jobs. He said he had a bid from the guy that did the addition and had finished the main floor. So, why not go with him I says. You can see his work! Neighbor said he wanted something to compare the bid to. I said I don't give free bids. Mine is a Detailed Specification and Cost Analysis. Take time to put together. Time is money. Pleeeeeeesseee he says! I know I not doing the work, so does he. I've been a cruise with this guy and his family. So I pull out a 1998 job and label it as such in red. I know the price of gyp board went threw the roof on the '98 job after I got working on the job. Sol, I come up with a real nice looking spec sheet with costs. It's 18,000.
Drop it off, (four houses away) and within hours he calls. Thanks, Thank You, I Appreciate It! Don't know how many other guys he will bother--he says he wants 5 bids. I told him he wouldn't blink about paying the structural engineer, the drafter of the plans so the other guy could get a permit, or the architect. Why does he think I work for free? Come to think of it--this email is costing me money. Get paid for your work! Tyr/Thor
tyr... so send me a bill... i'll give it payton manningMike Smith Rhode Island : Design / Build / Repair / Restore
This is an interesting topic to me, as it is something I've been thinking about a lot lately. I had a remodeling business in another state for 5 years, and I gave "free estimates." I know there were times I was just being used to see if the BIL's price was a fair one, and I got lots of work because I was the lowest bidder.
I live in California now, and I'm working on getting my contractor's license, and whether to charge for estimates, or proposals, or to even "bid" on work is on my mind. When I was in business before, I had only builder that I did work for, everything else was for the general public. This builder had been in business for a long time, and he basically did not "bid" on work. If you wanted him to build you a house, and he wanted to build it, he would contract with you to built it.
I guess that is where all of us would like to be, where we don't "bid" on anything, but get all of our work word-of-mouth from people who only want us to do the work, and don't care about the price. I don't plan to build new homes, but rather have a one-man operation as a self-employed craftsman, working on existing homes. I see so many of the contractors here who spend most of their time preparing proposals so they can bid against each other. I would think someone who's been in business for 20+ years would get enough word-of-mouth business to not have to bid on anything.
I'd like to start right out not bidding, but doing work for people who 've seen my work, and want me to work for them. Is that feasible? Any suggestions for a game plan?
Allen, I've been working strictly off referrals for the last 15 yrs. You will not get to the point where there is no bid. You will get to no competitive bidding, but they all want to know how much.Remodeling Contractor just outside the Glass City.
Quittin' Time
When I started charging for Proposals I knew I’d have to change the “term†used. so I came up with SCA - Specification and Cost Analysis, which to me, is exactly what I was proposing to offer.
A details SCA represent one hell of a lot to any potential customer, and as such has value.
I used to ask customers to call three CPAs to come to their home, pick up their tax paper work, and return to their respective offices. The calculate their tax refund or liability, bring that back to them and present “bid†for doing their taxes. That’s why we do.
As for high end or low end, son Tom does only high end - people who think nothing of dropping $80K into a master bath or $1M into a penthouse. Tom fought me abut charging for Proposals until one day when he was in a new customers condor at the first meeting and there was a designer woman thee as well. She walked out with a check for $3000 without doing a damn thing yet. Tom was converted from that day on, and now gets not only a fee for the SCA but a separate one for design work.
Some of you here know about “The Process†which is sent to a potential customer before the first meeting so they will learn about how you operate and the fact that you charge for SCA. If anyone is interested in it email me and I’ll send you a pdf copy of it. I recommend that you just modify it to your own operation type and personality. It was originally created several years ago as a 4 pager, but is now a 13 page advertising/marketing/PR/qualifying document.
Since I now only do small repairs and small remodels, I also charge a $40 trip charge for the small repairs, and when doing condo work, charge an SCA fee for extensive repairs, and the nice thing about it is the two property managers I specifically work for are all for it.
Time, expertise, experience cost to acquire. Do not give them away.
At the first meeting I only give a verbal ball park which is what Tom does as well. Anything else that requires my time or expertise, all that I have to sell, carries a charge.
After about 25 years in business (32 now), I finally started feeling like the professional I am, but more importantly , act like it and get paid for being one.
Admittedly it is not easy to do, and yes, it takes cahones to start doing it, but after you create your own way of bring up the subject in a confident manner, like creating any other habit, it gets easier each time.
No more do I spend hours on estimates and not even getting the courtesy of a call telling me that I did not get the job, but ignoring me instead - the ultimate insult.
I wanted to add that I find it amazing that architects and engineers consider themselve "worthy" of being paind for their expertise, but for some reason feel professional contractors are so far beneath them that our time is worthless unless we are wearing the hat of a painter, carpenter, etc. and actually doing that work. It is arrogance personified! And I refuse to buy it. That goes for specialty contractors as well. Last week I had an AC guy come to my house because I wanted to rework something and insisted upon paying him for his time here.
Edited 9/12/2004 1:15 am ET by Sonny Lykos
Mike, I just found this thread and haven't read the whole thing yet...but we had a 172-post thread on this last year and it changed the way I do my sales calls forever.
http://forums.taunton.com/tp-breaktime/messages?msg=34384.1
Can't remember if you got in on that one; Sonny was there and quite a few others.
I now have a charge item on my bills called DCA--Design and Cost Analysis (thanks, Sonny!)--and I haven't had a single serious bitch about it in a year's time.
When I get a blind call from someone who's found my card somewhere (I don't do other advertising; only leave business cards in racks and on counters around town), I explain that I'll come out and look over the job and give them a verbal ballpark at no charge...but that if they want a formal estimate, it's a minimum of 3 hours DCA. In most cases, this is accepted with no argument...but when it's not that's a red-hot signal to me that it's probably not even worth my time to drive over there. So I go only if I'm bored or have lots of free time coming up and it's not too far away.
I don't believe I've lost a single job I would have gotten otherwise by doing this; the people who don't want to pay for my time to figure up the costs in a complex job are the same people who won't pay my rate anyway because they're looking for a low-ball fixed-price quote from some slap-it-up artist...and that's not my style at all.
My regular customers have all accepted this 'new' way to doing things with good grace; usually they just okay my ballpark and don't need the detailed written breakdown. They trust me; I trust them. It's a symbiotic relationship where respect is flowing in both directions.
Dinosaur
'Y-a-tu de la justice dans ce maudit monde?
Fellas, for those of you who are either timid or hesitant to charge for an SCA, DSA, or whatever you decided to call it, there is a way to make it easier for you to present, and easier to the customer to “digest’ or accept.
A few years ago I found that most customers consider us to be just one more contractor flapping our lips, so they really don’t know who to believe. About that realization I received a catalog from NEBS, and in it they sold “Presentation Folders.†First time I’d seen them - open it and on the inside left is a large flap and the same on the right side. Here’s what I did:
1. My detailed Proposal went on the left side.
2. Validating documentation went on the right side.
By documentation I mean not only product literature but as important if not more, installation specs from products to be used and their reasons.
Now I became an “expert†i the eye of the beholder, and no longer joust one more guy flapping my lips. Upon going back to their home to present them wit the folder and it’s contents, it was not unusual for one of the couple, upon reading the lit. and specs. to say to their spouse: “Sonny was right about .......... It says it right here.â€
Instant “credibility.â€
It’s important to remember that what you are about to charge them for, the SCA
is available for them to see. It’s not like a “promise†to remodel. The SCA is “real.â€
So during the first visit wit them bring a complete sample of the presentation folder, a SCA and all documentation. In advance, make one for a kitchen remodel, a bath remodel, a deck, , reroof, addition, etc. Then just use them as visual aid marketing “tools.â€
It does work. I go further. For example, i keep a sample of a PVC ext. jamb and a PVC sample of brick molding, a piece of used finger jointed baseboard to show how it eventually separates and why I only use clear one piece trim.
Bingo! More “credibility†and now also as a true expert who only does first class work.
Again, it works.
so, the presentation folder and it’s contents lets them see the details in your SCA and exactly what they will get and unless they are really dump, will understand all of the time that goes into preparing said SCA. The trim samples just as a “kicker†to your expert knowledge as a “professional.â€
Try it.
Well, we're all different, and so are our businesses. What works for one person will be a disaster for another. For me it would be a mistake to dwell on terminology, trying to diferenciate among "bid", "estimate", "proposal", "SCA"...whatever term others might use.
I'm plain spoken, some people appreciate that; others don't. I suspect I mostly work for people who appreciate it, and it's what comes naturally to me, so communication throughout the job is consistant.
That being said, here's what I do when a potential new customer calls - I try to determine right away what type job it is, and when they want it done. If it fits my schedule and is the type work I'm interested in doing we'll set up a meeting to look the job over and more importantly to meet all decision makers. If, at that meeting I get a sense I'll have trouble working with the customer(s) I wrap it up quickly promising to get back to them in a day or two. I then call the next day, thank them, and decline.
If there is extensive design work involved, it is obvious to me at that meeting. I usually take enough time to look the job over carefully, then call the next day explaining there needs to be extensive design work done that they can hire me to do, or hire some designer or architect to do, but either way, I can't give them a price until that work is done.
There's a lot more to say here, but I'll stop at that, since I THINK the thread is about how/if we charge for telling a potential customer what their project is going to cost.