I know this is an old question. I know that most contractors allow 1 hour of time with a new client and then the clock starts ticking. I know you are suppose to pre-qualify the client on the phone. So, what is the question? After the first hour, what are you charging for? Design? Working up the estimate? What questions do you ask to cull out the ones who are looking for the third estimate? How in the he– do i stop wasting my time?
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one hour?
never heard that one before.
Jeff
Buck Construction Pittsburgh,PA
Artistry in Carpentry
Why one hour? If the client comes to you because the first hour is free, you are not likely to go too far with him. If he is serious and respect the time you put in, he wouldn't mind paying for that hour.
The one hour seems arbitrary.
"Why one hour? If the client comes to you because the first hour is free, you are not likely to go too far with him. If he is serious and respect the time you put in, he wouldn't mind paying for that hour."
I agree that one hour is arbritary.
But some point the the contractor has to sell hisself to the HO.
I AIN'T paying someone to go through and show me their portfolio and how they approach the job, etc, etc, information I need to know to see if I want to even get an estimate from them.
i charge for about 75% of our estimates.. i win about 95% of those jobs...
the 25% of estimates i don't charge for i win about 30% of those jobs..every time i lose one of those i resolve to stop giving away free estimates
typically i charge from $1000 to $2000 for my estimate and the resulting Proposal.. i never offer to apply the cost of the estimate to the price of the job..
i give the first meetig for free.. and by the end of that meeting they know that i charge and how much i charge..
i still give free estimates in certain cases.. old customers.. certain situations.. sure does help on the "life is short" philosophyMike Smith Rhode Island : Design / Build / Repair / Restore
Mike:
It's wonderful and amazing that you can get $1000 to $2000 for an estimate, and it certainly makes sense to me. How often do you have a 'first meeting,' tell the prospective customer that a proposal will cost at least $1000 and have them flip out or never call back? With so many contractors giving free estimates, homeowners have pretty much come to expect them.
Most of my projects are small and require little or no design work or technical specifications and I tend to get a high proportion of the jobs I bid on. But every now and then, I get burned. I recently prepared a proposal for a complete bathroom remodel that included about four site visits, including trips with the plumber and electrician, and several 'shopping trips' to help pick out tile and fixtures and such. The final proposal included a drawing for a completely new layout and specs for all fixtures. These people came highly recommended by my electrician and we seemed to hit it off well, so I assumed I had a real good chance of getting this job, too. Guess what. Weeks go by and not even a phone call. I can understand that they may want to check around for prices, but I would think the courtesy of a call would be appropriate. If I ever find out they built my design with someone else because that guy was a little cheaper, I will be rather annoyed.
I think many of us have this problem. I'd love to know how to charge for the estimates to eliminate the total waste for jobs I don't get and to discourage those who are simply shopping for prices. I imagine the key is charging for the design service that these estimates often entail. Ironically, I sometimes get asked to build a project designed by a for-fee designer and it can't be built as designed because the designer neglected to bother checking on nagging little details like building codes and zoning laws.
Another problem is my subs. I'm not sure about this, but the guys I hire tend to be plumbers and electricians that do a lot of retail work, and I think I lose some jobs because the price is high because by the time I get done marking up the subs' prices, things get pretty high. Do most remodelers tend to work with subs who charge 'wholesale' prices because they tend to work for contractors rahther than directly for homeowners?
Al Mollitor, Sharon MA
al.. i think my subs have prices on the high end.. but everytime i try someone different i usually regret it..reliability , standards of quality.. something i can count on...
think about it... suppose there were 5 garages in your town .. only one charged for estimates.. the other 4 didn't..... if the one who charged had a good reputation.. would you care if he charged ?
the thing about "Proposals for a Fee" is it takes the suspense and disappointment out of it...before i started charging.. many years i would lose say 300 - 400 hours in a year preparing "estimates" for jobs i never got... one thing i noticed.. it hurt when they didn't select me.. but if they had said no on the initial visit.. it just would have been my feelings and not my pocketbook..
now... if they want me .. they can pay me.. if they don't want me.. no harm , no foul.. and a lot of times i can just imagine.. they'll select someone who gives them a proposal for free.. but they'll never know if they got a good deal or not.. and if there is any dissatisfaction with the way the job went.. they'll always wonder if they should have paid me for my Proposal..
sonny lykos has a whole written procedure he gives his prospects called "The Process"..
i'll also tell you this... it's a lot easier doing this with 30 years experience than it would have been with 3..
now... you mentioned "DESIGN"....no way.. no how... design is a seperate animal.. i ABSOLUTELY get a design contract seperate from a construction contract.. they don't get the back of an envelope from me unless they pay for it...AND.. there is a clause in my design contracts that says no one else can use the design for construction ( a liability issue )...
conversation recently.. customers wanted to talk about built -in bookcases... two hour site visit.. end of conversation.. ok .. i can design the bookcases and give you a fixed fee Proposal.. for $300... they gave me the check right then and there..
just had a guy call me from Florida.. wanted to talk about building some spec house on a lot he owns in town... i didn't catch his name... yada, yada ,yada.. turns out he's the guy who stiffed me for an addition plan twenty years ago... i designed it .. gave him the price and someone else built it.... he didn't even remember me.. but i remembered him...i didn't even mention it.. he probably still doesn't know.. but i won't be doing business with him
want to pre-qualify your customers... try this ...(ahem.. put on my cuba gooding voice...) " show me the money"
show me the money and i'm yours.....no money..." nice to meet you" Mike Smith Rhode Island : Design / Build / Repair / Restore
I love your attitude.Remodeling Contractor just outside the Glass City.
Quittin' Time
Me too. If I grow up hopefully it will be something like he describes.
That comes with experience and a mind set...and attitude too.
When it comes to money you play by your rules instead of the client's and you'll find youself a happy man.
david.. it took me about 25 years in the business, to figure out that when i grew up i wanted to be a contractor.... so.. that 's what i'm gonna be when i grow upMike Smith Rhode Island : Design / Build / Repair / Restore
>>But some point the the contractor has to sell hisself to the HO.
That's advertising and promotion and I wouldn't charge for that.
By giving an estimate I mean you have already finished doing the song and dance thing and the client is asking you to do an estimate for the project. May be I didn't read him correctly, I thought the one hour free started from the time you started working on the estimate.
I got the idea that it was starting when he knocked on the door. So there is the case of both selling himself and getting the scope of what it to be done.
But until he comes back we are only guessing and guessing differently.
This is an issue about which I have recently become preoccpied. As I am becoming more professional and more of a GC than a carpenter, I am less and less willing to give away ANY time. From this point on (if it is a complicated job that requires design, product searches, and/or subs), I am getting a preconstruction contract before I do any brainwork. Gerstel has a chapter on this in his book (about which I've talked on this forum).
Tim:
Have you used your pre-contruction contract and been paid for estimates yet? How are your customers responding?
Al Mollitor, Shraon MA
Al,
No. Not yet. I'm in the middle of one now that I wish I had. I believe that most successful construction companies don't do much competitive bidding. Projects today are so complicated and building techniques and products are so sophisticated that too much time is invested in creating an estimate or proposal to survive economically if we did it for free. According to what I read in Remodeling, Builder, and JLC, leads should come to us because we've successfully marketed ourselves as the GC they want. The question in customers' minds shouldn't be "which builder do we want?" but "We like what we've heard and seen of you. What is the scope of the project we can afford to do?"
So, as I said earlier, "from this point on."
What do you think? Too idealistic? I've spent a LOT of time in my career estimating jobs. Although I've gotten most of them, I never got paid for all that estimating time.
Mike, I'm in the process of revising "The Process" to make it easier for more contractors to use to thier benefit. Micheal Stone will be selling it on his web site for a very nomimal fee.
My point to customers is simply that when they get a detailed Proposal, which I call a SCA - Specification and Cost Analysis, which is relally what it is, represents a very valuable "document" to the home owner.
1. It gives them a detailed SCA of their project.
2. It can be used to compare the SCA to what another "Proposal" includes.
3. I compare it to me taking my truck to a dealer with an electrical problem to determine (a) what the problem is and (b) the cost to take care of the problem. The last time I did that was about 5 years ago and it cost me $143 for the "electrical diagnostic fee" and another roughly $200 for the computer part needed - and get this - I had to take MY problem to the dealer. He didn't come to my house at my convenience.
So what we do is even more. I have contended for years that contractors are schumcks for providing the "consultant" expertise provided at no charge, and often taking several hours and several trips - to their homes doing so, and often to get not so much as the courtesy of a phone call to tell us they hired someone else.
I just got tired of it so "The Process" was born. And it works.
So the hour or so spent with them at the first meeting is no charge (still a deal for them) but a detailed SCA is charged for. Hell, call an appliance service man to your house to check out a refrigerator that's not working right and they charge at least a $40 trip charge. Every single overhead door company here charge a $40 minimum "trip" charge just to drive to your home and say: "Hi. I'm Joe from XYZ Overhead Door Company. How can I help you?"
And as for this 3 bids BS, I'd like to see our same customers call three different CPAs to come to their houses to examine their tax papers. Then tell those same CPAs that the one who give them the best "deal" will get their business. It will be a cold day in hell before that happens. Gee, I wonder why? I'll tell you why. Most contractors have the mentality of a "tradesman" as opposed to the mentality of a "businessman."
Not one of us like to think of ourselves as a schmuck. But one day I looked in a mirror and said if I act like a schumck, talk like a schumck, and run my business like a schumck - I must be a schumck. So my "ego" got thrown out the door and the businesman in myself developed, which had been previously dominated by my "tradesman" mentality.
I remember over 30 years ago when an older brother said to me: "You do what for free? Are you nuts?" And I replied: But Tom, I can't charge for estimates because no other contractor is charging for estimates." And all he could say was that then all contractors are a**holes. Thirty years later I admitted to him that he was right, so I decided to go against the grain and do something about it. It happened during a period what I'd spend hours upon hours working up proposals (nights and weekends) for several jobs and didn't get one of them, and not one call from the people.
I decided to regain my self respect and either change that situation or get out of the business. Either I was a professional - or a schumck. Either I had balls or I didn't. Either I was going to get paid for what took me years to acquire or not. Either I was going to think of myself as a construction "consultant" or a philanthropist - or not.
I am no longer a schumck nor a philanthropist. And on my small handyman jobs I also get paid for a "trip charge", "site evaluation", or whatever you want to call it - of $40 - and they are paying it, in addition to my labor rate of $82/hr.
I am - a business man!
Edited 3/7/2004 8:14:51 PM ET by Sonny Lykos
we gotta talk.... why don't you and barb come to RhodeFest ?... oh , wait.... you already signed up....
BTW... when i get paid to do an estimate.. i still DON'T give them a detailed breakdown of COSTS , only SPECS.. i will seperate PRICING ALTERNATES.. but i never give info that can be used to nickle -dime me
Mike Smith Rhode Island : Design / Build / Repair / Restore
Mike
I like the idea of a spec. proposal first.
This makes clear to the uneducated owner what will be bid on.
"My point to customers is simply that when they get a detailed Proposal, which I call a SCA - Specification and Cost Analysis, which is relally what it is, represents a very valuable "document" to the home owner."
As a HO that is an EXTREME deference between paying some one to provide me with useful document vs paying a contractor to "do his job" of generating a internal document that is only useful to him.
And we can carry this to other business.
If it is the auto repair then for you money you get a report that the dohinky tested Ok, but that the framish valve needs rebuilding. And repair shops don't charge for an estimate, they charge for a diagnosis. What you say if guy said that is $250 for repairs and you ask what repairs. And he says that is his business.
If I, as a HO, is paying for an "estimate" I want to know what I GET OUT OF IT.
bill... on a new custom house.. with a good (GOOD ) set of construction drawings.. i'm going to spend in excess of 40 hours...
what you get out of it is my experience and my Proposal.. and if you like my price. you get me and my company..
now.. if you don't want to pay me for my 40 + hours , you don't have to... but i won't be bidding your job..
assuming such a thing as an efficient marketplace (big assumption, no ? )... my competition is going to produce that estimate for free.. or are they ?..
in the automotive field.. with all of the new diagnositc equip., you can get a print out of all the components and what they need..
with my proposal you will get a print out of all the components and standards we are going to provide.... but the automotive place is not going to disclose how they arrive at their price.... and neither am i.. i will give you all of the info you need to make a decision... if you want x,y, z.. it will cost you this much..
if you want x,y,& z+ it will cost this much..
but no peeking behind the curtain.. this is not a transparent deal..
you bring your money and your personality to the table... i bring my reputation, my credit, my experience and my personality to the table.. here i am.. "show me the money"... see...i'm a "contractor"... this is what i do for a living....
am i missing something ?Mike Smith Rhode Island : Design / Build / Repair / Restore
am i missing something ?
You're not missing anything, Mike. You're just fighting against the long-held tradition of "free estimates". Open the Sunday newspaper, and I'm sure you'll find a dozen ads for contractors offering free estimates, so why should anyone expect to pay you for one, right?
It's an uphill battle, and for some single trade contractors, it's a very tough sell. For example- if I were a roofer, and I got a call from a potential client, I'd be hard pressed to sell them on paying me a few hundred dollars to price up their roof- especially since it would take me all of about 15 minutes to price it up (unless it was something unusual).
Now, for major remodeling work, there's a few different scenarios:
- When there's a full set of plans and specs, I'd arrange a first meeting with the client, and review the plans, their budget, etc., and get to know them and vice versa. Before that meeting was through, I'd have a pretty good feeling as to whether their budget was realistic- if they were hesitant to give a budget figure, I'd throw a range out there to see the shock factor (if any), and decide whether to bid the job or not. If we seemed like a good fit for each other, I'd take the time to price the job. This all assumes that as the contractor, I don't have the 30 years of experience behind be to allow me to pick and choose my projects and avoid competitive bidding.
- When there's no plans and specs, and we're talking back-of-napkin stuff, the best the client can expect is an hour of my time, and a ballpark range (wide range) of project cost. The next steps wouldn't take place without a retainer for design and/or consulting services.
- The scenario you outlined. If I was well known enough that my work came mostly from referrals, and I didn't "have to" competitively bid, I'd do just as you outlined.
Bob
Don't forget that HO's don't come in one size fits all.
Many, as I was, are completely lost when trying to get anything done to a house or much less build one.
I had heard the word GC but didn't know what it was, if one was really needed to build a house, or why. I assumed he was someone that did the building himself and had crews to help.
My first surprise was that several bids needed to be considered. I asked a builder that used concrete, one metal, one SIPS and one regular wood materials, that made sense, as I was comparing different processes. That is when I learned that they would be using subcontractors for the actual job.
Didn't realize at first that even those with the same method may give very different bids, something that didn't make sense, since the cheaper ones were also cutting corners, so to compare was not clearing anything. Why not have the same price for a job and get someone with a good reputation to do it, not have to ask several?
I would think that you need to make any first visit free, if nothing else to asses the situation and clear the air, explaining what you do when people are clueless as I was or have misconceptions of how they think a job can be done.
Then, to proceed, you know best what will work in each situation. A fee for proceeding may not be the best and then it may if it looks like more work than average for preparation.
$82/hr??? Good God! I am definitely in the wrong business. I repair people for a living and have been doing woodworking / finish carpentry as a hobby. I have been thinking about taking out a DBA and doing finish carpentry on the side but had no idea of what to charge. Just been doing it for beer & BBQ up to now. But $82/hr??? Do people really pay that???
Yikes!
RickRome wasn't built in a day, take your time and do it right the first time.
Rick:
You may notice, there have been several discussions about how to run a home building/repair business lately on Breaktime. I'll make sweeping assumptions and generalizations by stating that your reaction to "82 bucks an hour!" is typical. It sounds like a lot, but think a moment.
Say you're a doctor. Unless you have your own practice in your own building, you probably get a lot of help along the way that you take for granted. Sure, you studied hard, you worked hard and you paid off a lot of loans, but what about that med school? Chances are, taxpayers built it and subsidized it's operation. All those fancy MRIs and things you get to use? My guess is you aren't making Mastercard payments on them. That parking space with your name on it? Probably a free perk. Feel like ordering a few more tests? Oh, insurance will pay.
When a contractor finally collects his check from a homeowner, there are plenty of bills to pay before we get to go food shopping or pay the mortgage. Insurance, tools, truck, insurance, gas, repairs, license fees, permit fees, estimating time, phone, computer, postage, finance charges, office space, storage areas, parking space, time spent buying materials, paying for those materials in advance, down time for injury, down time for weather...you get the idea. And, that's just the cost of doing business. When we get the 'take-home' home, guess what?, no health insurance, no dental insurance, no 401K, no paid vaction, no paid sick days, no free counceling if all this drives us crazy.
I tip a little better since my daughter read "Nickled and Dimed." I hope others will at least pause to think next time they grumble about writing a check for a self-employed tradesperson.
Al Mollitor, Sharon MA
Mojo,
I'm not a doc. I'm a firefighter / paramedic. But, your point was made. I certainly didn't buy the truck, the station, hose, tools, air paks, EMS supplies, or bunker gear out of my pocket. At least no more than the rest of the taxpayers did.
But, still I'm wondering if I can get some supplemental income out of woodworking and finish carpentry rather than beer & BBQ. Now, I'm not opposed to doing the beer & BBQ thing for friends and family (in Texas, beer & BBQ are legal tender for services rendered). But, I'm starting to get friends of friends calling me about jobs and they are asking "hey could you build me a built-in like you did for so & so?" or "How much would it cost for crown molding and wainscoting like what's-his-names?". So far I've been dodging the questions and answering with "I don't know right off the top of my head, let me get back to you on that" and then changing the subject real quick. But it has planted these thoughts in my head... I get a lot of satisfaction out of it...
So, I guess my question is... How deep would I need to get into the business end of it if I was just planning on doing it "on the side". I have no intentions of leaving the fire department but, I do get a lot of time off and I love to work with my tools... Rome wasn't built in a day, take your time and do it right the first time.
Rick,
To do it 'right' takes a lot of administration time. You have new penpals at the city, state, and federal levels. My wife and I have a little calendar on the wall of all the tax returns and such we have to file. If you're a corporation it's even deeper. We found it easiest to go to an accountant and have her set up the entity and get us registered and on the books with all of the government agencies that collect money and paperwork from us.
Once you start charging money you will find that you get fewer calls. You'll be competing with everyone else who charges money too. You'll spend time doing estimates and not getting jobs or waiting months for people to decide. Beer and BBQ is a hell of a deal and you'll have a line out the door as long as that's the price.
Does your department use MSA air packs? We just got them and I have some... issues.
Mostly to Mike Smith.......I've seen your work; obviously you have developed a well run company.
My question then is this: In dollars what would you say is the cut off for the size of the job where a client would be willing to pay for a proposal? I am guessing that you don't do a whole lot of jobs under 50k or so. Is a "new" contact gonna pay you for an estimate for a 9, 12 or even $20,000. dollar job?
Where I am, you are not going to sell a potential client on buying an estimate for a 20k bath remodel I don't care what you tell them or sell them. Not when there are 5 other reputable firms willing to do it for free. After 50k or so I can see that. That is the beginning of a whole other market.
Last year you did a 175k addition for the Jones'. Are you gona tell me that you are gonna charge them (or get them to pay) when they call you to remodel their kitchen?
Don't get me wrong. I know this works, but I think that for people that are attempting to (re) structure their business with this model they are not getting the whole picture in a big way. And 35 years established goes a long way towards getting paid for that estimate.
Let me know your thoughts.
Eric
Firebird, in addition to what Mikes tells you, it's all about "you", not the size of the project.
I do jobs (and sometimes not) for a lot of condo associations. Many of the jobs are under $1500, for which they pay me $100 to $125 to go look at the "repair", assess the best solution, type up an SCA and price & fax it to their property management company. They can get one of my competitors to do it for free, and most of my competitors rates are about 50% to 70% less then mine.
Like I said, it's about you, not competitors,the job type, or size.
as sonny says.... it took me a long time to figure out that there was no percentage in basing my business on what the other guys were doing... truth is.. they don't have a clue..
they don't know how to estimate... they don't know how to price, they don't know how to market..
a lot of them are GREAT builders.. but most just get by..
my old partner used to build at a loss.. thought he could make it up in volume.. hah, hah, hah...
now , let's look at the Builders who are organized with a sales department, an estimating department, and a production department.. who's paying for the salesman and the estimator ? ...uh...ummmm ... the customer !
why should you , or i , as a small builder... NOT PAY OURSELVES for sales and estimates ? we should.. right ? so, how are you going to do that .... ok.. historically, you make it part of your overhead... but why.. who benefits ? the customer who gets the service.. so.. why shouldn't the customer pay ?
here's the deal... if you are not bidding , but pricing.. then you can do it without a fee.. but if someone asks you for a price because they want a comparitive bid.. you're screwed... there is almost NO SUCH THING as a comparitive bid.. not in the residential market..
most times , even if an architect is involved.. and he has a set of specs an inch thick.. do you think all the bidders will bid on the specs ? i will.. but my bid will get blown out of the water.. so , i won't bid...
most of the time.. if you bid to the specs , your bid will be high.. if you don't bid to the specs.. the architect can hang you out to dry.. who wins ? not you
if i get a Design Contract .. my design fee includes the pricing.. but if i'm bidding on someone else's plans, i let them know that i will be spending 40 to 100 hours developing my Proposal.. and i want a fee for that... average custom house.. $2000 - $3000 . some hire me, some don't ..
on small jobs.. if it is abundantly clear that the job is mine (IF ) , then i tell them i will prepare a Proposal and get a deposit.. a while later, i have it ready, i call them up and ask when we can meet... i present my Proposal, they sign and give me a deposit so I will schedule the job.. if they don't sign... i had them figured wrong...i misread the situation..
i get fees for preparing a Propsal for $2000 jobs, $4000 jobs.. $100,000 jobs...
really .. what do people ( your potential customers ) know about how our industry works?..
not much.. maybe something Uncle Harry told them.. or their father, who used to be in the business... or Bob Villa.. i mean... come on.. those people ARE NOT GOING to build their project... you are.. if they want the free thing.. they should call someone who advertises "free estimates"...
i don't ... my time is not free.. unless i'm doing volunteer work for our Lion's Club...
so.. what business are you in.... the "Free Estimate " business? or the Building Business ?
try it ... but don't go in cold... you've got to have a plan .. how am i going to get them to pay me up front for preparing a Proposal for them.. so much down.. so much when i give them my Proposal.... sounds like you need a Proposal for a Proposal..
oh, yes.. another thing... are you really preparing an ESTIMATE ?.. i'm not... i'm preparing a Fixed Price Proposal... one that I will stand by and execute according to the plans and specs.. one that will not change unless there is a Change Order.. and change in the Scope... so keep that in mind... the other s are advertising free ESTIMATES... we don't do estimates
Mike Smith Rhode Island : Design / Build / Repair / Restore
Dave,
We use SCOTT Packs. I've seen MSA's & Draager's in training but, never actually used one. I did use Cairns many, many yeas ago and liked it but, you can't go wrong with the SCOTTs.
RickRome wasn't built in a day, take your time and do it right the first time.
(thread hijack warning light goes on...)
Thanks, Rick. We're a volunteer department. We just retired our Scott gear--it's about 25 years old. We got MSA packs using some sort of federal grant. They have a standby position for the regulator on the mask that can block your breathing if you move your head wrong. Otherwise we love them.
(warning light off)
Mike, you should prepare a seminar on this and present it at the trade shows. People seriously need information like this.
Rick, American Painting Magazine has an article in the current issue (not availabe on their site) about doing side work, overhead, etc. Email me with your fax # and I'll fax it to you. If not, I'll scan it and email it to you.
BTW, it's not unusual to make upwards of $125/hr specializing in small jobs, although not necessarilly in trim jobs.
Sonny,
I don't have a fax machine at home but, would love to see the article. I'd appreciate it very much if you'd e-mail it.Rome wasn't built in a day, take your time and do it right the first time.
boy this is a delimia
i feel the client should put toghter a wish list for what they want before i see them
once i see them i discuss these issues with them as well as input on product
i assses there home when i come as far as dollar value in the area
ask if they intend to die there ( if i dont kill them before lol just kidding )
then put together budget #s based on the discussion
then i produce a design build contract where i get a retainer for the design
at that point i use there dollars for the design & go to contract
VERY WELL SAID !!!!!!!!!!!!!!!
WHAT IS THIS EVENT THAT YOU ARE TALKING ABOUT?? I MIGHT LIKE TO COME !!
I AM A KITCHEN REMODELER IN NEW JERSEY
http://forums.taunton.com/n/mb/list.asp?webtag=tp-breaktime&ctx=256&cacheTag=x31-21
Here's a link to the fest if that's what you are interested in. Should be enough info in there to intrigue or insult.
By the way, the real new guy brings lots of beer and wine for the more refined.
A real blast, and deductible if you're creative.Remodeling Contractor just outside the Glass City.
Quittin' Time
Jersey, eh? Whereabouts? Woodbridge here
Bob
I believe that if you can get away with charging for an estimate then you should do so- the customer is getting the benefit of your time and attention and ideally should pay for it. I couldn't get away with it but in my line it doesn't take long to do an estimate so no problem.
If you are going to charge for estimates then I guess you are going to have t tell clients that when they first ring. Might put some of them off, especially if they think that maybe they will end up paying for an estimate 50% higher than one they've already got (maybe your estimate was going to be lower, but they don't know that). In the end it probably all comes down to how many potential clients do you have, an how many can you afford to risk losing.
As to how to select out the time wasters- I don't think there is a way of doing that.
John
I've only said that I would charge a few times. On some bigger projects that I knew was gonna take a few hours to estimate, I told the HO that if I got the job the estimate was free. If not, there was a $50 charge. The HO were pretty pleased with that. So far out of all the times I've done this I've always got the job so I never had to charge.
Hey guys (and gals)
I've struggled with this for the last six months. Finally after going on 2 wild goose chases a few of months ago where I spent about 60 hours of "free time" I finally felt like enough is enough.
When I do an "estimate" I do an"as is" and "proposed" floor plans using Chief Architect (Mike Smith's glowing reviews had a lot to do with this!). By the time I've had 3,4 or 5 meetings with prospective clients, drawn up plans and estimated the job, I may have anywhere between 30 and 50 hours into their "free" estimate.
Admittedly, the first couple of months with Chief Architect (i've been using it for about 6 months now) I didn't mind the "free" practice sessions, but after awhile I was getting tired of feeling like I was a check on another contractor's numbers and giving them a good look at some nice floor plans and ideas (and no, I never left floor plans with any prospects if i wasn't paid for them, but i'm sure i gave them some nice ideas).
So for the last couple of months the only free estimates I've given are the ones telling the client that their project will fall into the $40 and $70 sq.ft range depending on a million things (our target jobs are basements in the $50k to $100k+ range, in homes from $500k to $1M).
Now, of course I may end up losing some possible clients, but I know I will lose ALL of the people who have no intention of hiring us and are just getting their "3 bids/estimates". I usually end up charging between $800 and $1,500 for floor plans and a written estimate.
I'll let you know at the end of the year how this strategy worked out. If I'm somewhere asking "...do you want fries with that?" we'll all know it wasn't such a bright idea (at least i would be getting paid for my time!)
Jay
http://PremierBasements.com
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P.S. Just wanted to mention that reading all of Sonny Lykos' posts over the last couple of years really helped in giving me the cajones to start charging for estimates....so thanks Sonny! Now it's off to have a couple of brewskies with a buddy of mine, talk to you guys later.
Jay
jay.... "fries with that" is nice.. you work an hour... they pay you for an hour..
i had way too many years when i would have tripled my earnings if i had been working at micky d's... one of the benies of a 2 income familyMike Smith Rhode Island : Design / Build / Repair / Restore
You know what? This thread alone was more than worth the price of becoming a member!
I've been self employed in the biz for a decade or so now... and for all of those ten years I've been bitching about the very things you guys have brought up. Spending 30 - 40 hours on a bigger estimate, 3-4 hours of home owner meetings on Saturdays and Sundays. Beautiful floor plans with cut list quality and 3D take offs - just to have the HO go with Joe who was a few bucks cheaper. No More!
This year, we are booked enough in advanced so I AM going to start charging. I'll make the first visit for free and I'll be happy to do it! I'll even babble on to the HO for a couple hours if that's what it takes, although usually by 30 minutes the hook should already be set.
However, a detailed bid price is going to cost! And initial floor plans with 3D images will be billed at a per hour rate. Free estimates my a*s!
pet... hee, hee, hee.....Mike Smith Rhode Island : Design / Build / Repair / Restore
3d images and floor plans?? Sounds like you're doing design/build and have been providing initial design concepts free as part of the sales process. Definitely charge for that! Naughty monkey!!