Do any of you email estimates? I know many like to present them in person but sometimes I will email them as I know they job may not really be a job or else its not enough profit to spend time on.
Ironically, the last 5 I have done that way, three resulted in bona fide jobs albeit very small ones and the other two I figured were just tire-kickers were indeed just that.
I know selling the job in person is always better but for somethng lile installing a few doors seems to be just as esaily handled by email when you know the homeowners are already cost conscious.
Whats your experience?
Replies
"I will email them as I know they job may not really be a job or else its not enough profit to spend time on."
That's an easy thing to fix: add more dollars so they are profitable, then take the estimate to the people and present/sell it!
If the jobs are so small, you should be quoting them at the house the first time. Don't be afraid to mentally figure what your profitable price should be, then raise it significantly as a trial close.
With your price elevated to cover your contingencies, it leaves you lots of room to "help you out" by discounting. In this negotiation, you'll find out where you need to be. If their number is lower than your "real" number, then you probably will not be doing any work for them no matter how you present.
This technique should/will work on jobs costing 5k or less. Anything over that requires a more significant process. Very few people will make a 5k decision on the first meeting. But, with that said, you have to believe that many people will make a decision if it's less than 5k. Think about it this way. Its stressful for you to meet new people and make presentations. It's also stressful for them to meet new contractors and get presentations. They dread that. If you connect with them on a personal basis, and they believe (trust) you, then often will choose you and be glad that the dreaded contractor selection process is over.
With this thought process in mind, think about how you restructure your discussion with them. For instance, yesterday, I had to re-negotiate a misunderstood contract. We were in the hole and would have had to pull the materials off the roof. I managed to work it out. After that, I began a new negotiation for a skylight replacement. The owner asked about an upgrade. I mentioned that Velux had an energy star rated unit that I thought we could install. I said "I don't know the price for sure but I think I can get that installed for $1500."
What do you think happened?
Jim,
Good advice...thanks.
Some of these are just things that you really can't add much more to the cost like door installs. I most likely shouldn't even go look at jobs like that but I never just want to say "No" on the phone as I figure at least meeting the folks would be good. And I always seem to hit it off with folks its just in these times the bottom line seems to be the deciding factor on small jobs.
So I go and meet with folks and they ask if you can beat Lowes or HD and instead of saying "No" onsite I figure I can follow back up with an email. In addition some of those folks want something in writing.
So I know what you mean just some of these small jobs don't seem to have any room to make more money...but I sure wish they did!
Thanks
Mike
YOu should have a small order pad with you for small jobs like that. Simply jot a high number down and ask when they want you to start. After they bring up Lowes, you have your chance to sell yourself. Explain that you've contacted Lowes and asked about the rates that they pay installers and you've determined that no self respecting experienced tradesman could do quality work. Explain that since you are already here, you would be willing to discount your price to get the work. Ask them for the number that you have to be at to get their business from Lowes. After the give you the number, try to upsell them as much as you can and explain the added value to them and their house by choosing you and your quality product. If you can get them to move the price up high enough take the job. If they stand pat at Lowes, make a decision....either take it or leave it. The time is already spent driving there and creating a relationship. You might as well make half a days pay if you are not busy enough.
I'd rather get an e-mail than have someone jot down a high number and ask me when I want them to start, especially if they then proceed play the "help you out" game of lowering the price until one of us cries "Uncle!"I hate negotiating price; I figure it costs what it costs, and either it's acceptable or it's not. If you start dropping the price to be my friend (when you don't even know me) or to make the sale (rather than by decreasing the scope or the quality, and spelling out what the difference is), I either get the sense that I'm being played, or that you're desperate. I don't like being played. How I respond to desperation depends on the exact circumstances.Plus, I don't like being pushed to make a decision on the initial presentation, unless I've already mostly made up my mind beforehand, and am just seeking confirmation of my decision.Anyway, for simple jobs I LIKE e-mail quotes. If you can pitch me and give me a price at the initial meeting, better still (as long as I have something in writing and time to make the decision), but no games, please.Rebeccah
I'm with Rebecca on this one.
I understand shooting them a number in the hopes that you get the job then and there. But to start knocking dollars off seems a little shady to me.
Me - "Ill put on your roof for $5000."
HO - "Home depot says they can do it for $3500"
Me - "If it means I can start right away I'll do it for $4000"
HO - " Ok, sounds good thanks"
As the HO I'd watch you pretty close seeing as you already discounted your price 20% without changing any scope of work. I would think " if he could do it for $4000 why would he try to charge me $5000" and have an uncomfortable feeling when you came back to do the job. If any problems occurred I'd quickly have a bad attitude.
How do you stay consistent with your pricing? How do you determine how much to charge whom? If I have a Lexus and a Lincoln do double the price?
Back to the OP- Im for and against emails. Small straightforward jobs, not a problem. Once I start getting into allowances and payment schedules I like to sit down with the HO's and explain how everything goes together.
I'm in the process of creating a pricing spreadsheet for kitchen and bath remodels so that I can give a detailed estimate on the first visit.
I made one for decks this year and it works beautifully. Give my presentation, agree on a style (or 2, or 3), sketch out the layout, pull out the laptop and plug in the numbers. It's great because it allows th HO to add and delete things, or change materials(wood vs vinyl rail, PT decking vs composite) to stay within there budget. I'm closing over 50% of my calls with this, with about half of those upgraded to better materials.
Your pricing spreadsheet for the decks sounds fantastic. I'm sure your competency with that program, combined with your skill and experience with decks, contributes significantly toward that 50% closing ratio. The ability to deliver relevant information over the kitchen table cannot is a significant advantage over those that are scribbling on pads.
Back to the discounting. Our pricing is competitive. We have to be competitive to stay in business. We do have a profit built into that price and that is negotiable. There isn't 20% profit and if Lowes is establishing the low end of the market, we have to show the buyer why it is better value to use our services, at the higher price.
The horsetrading begins after the client has stated "yes, I believe you are the best contractor for the job but your price is too high". That statement tells us that we have established the value. Now we, as the company, have to decide whether we want to reduce our profit margin on this deal because we have already invested some significant time (time is money) in it. The buyer has the leverage now and we are yielding to them.
" I hate negotiating price; I figure it costs what it costs, "
Fair enough.
What value do you place on my time? If I'm running four appointments each day and I have to go back to your place two or three times, haven't I missed the opportunity to sit in front of two or three other buyers. How much are those missed opportunitys worth?
When I put actual numbers to all the answers to those questions, a real number pops up. That's the number in my head that I use to offer discounts. The discount is on the table to get signed up today. If I have to come back, the discount is lost.
The choice is yours, the costs to me are real.
If you send me an e-mail quote, you don't have to come back and forego presenting to other potential customers. That was the whole point. Why do I want to pay more money for you to make an unnecessary second sales trip, when all I need is written confirmation of what we discussed, a price, and some unpressured time to mull it over?Rebeccah
Why do I want to pay more money for you to make an unnecessary second sales trip, when all I need is written confirmation of what we discussed, a price, and some unpressured time to mull it over?
Exactly!
Low pressure and the time to think through what one wants to do. This has been my argument for a company leaflet or better, a web site. You give the client an opportunity to, in their time, ponder using you without the noise, hype and pressure.
When they call they're 60% sold. Many of my clients are very busy and really don't like to have to have another visit to be sold.
I don't have a web page so I simply say I'll e-mail you a quote with a PDF portfolio of my work to look at. I do this because I only bring photos of similar work at our first meeting. The rest is just to expand quietly about the possibilities. I tell them please feel free to forward my photos to any of your friends who might be considering work as well.
For one...I haven't figured out how to email a triplicate contract.
I went on two sales appointments today. One had no intention of buying anything until she was sure the contractor was crooked or broke or both. The other was glad to accept a no risk 10% discount to sign today. They were the smart ones. They can still shop around and find a better price and rip our contract up but they grabbed the offer and will save a solid $800! That worked out pretty good in their favor. It took them about five minutes to wrangle the discount out of me. I think that factors to be about $9,600 per hour LOL!
Okay...so you don't accept discounts. Thats your biz. I don't mind...I'd gladly sell you at full retail.
Can you elaborate on the "no risk 10% discount to sign today" angle?
Jon Blakemore RappahannockINC.com Fredericksburg, VA
The "no risk" refers to their ability to continue shopping for a better price or contractor. If they sign today, they'll get the ten percent discount and they can continue to shop. If they find someone that they'd prefer to work with, then they can tear up the contract. We only want to work with people that want to work with us. Since we don't ask for a deposit, we truly feel that it is a no risk decision to sign.
The "no risk" refers to their ability to continue shopping for a better price or contractor. If they sign today, they'll get the ten percent discount and they can continue to shop. If they find someone that they'd prefer to work with, then they can tear up the contract. We only want to work with people that want to work with us. Since we don't ask for a deposit, we truly feel that it is a no risk decision to sign.
Huh?
What is the point in all that? You've marked yourself down, commited the time and will let them walk. I only want to work with people that want to work with me as well. 10% with the signed contract lets me know they like me.
I'd at least put a mandatory reach-a-round in that deal.http://www.quittintime.com/ View Image
Reach-a-round is prohibited in roofing contracts by Federal Statute.
Title 15 Sec 2 Paragraph A Nothing concerning roofing is allowed to feel good.
"What is the point in all that?"
Our point, which may be different than others, is to reach an agreement and get a contract signed, in writing. This is an important step in the agreement, both physical and phychological.
We find that once the pen is put to the contract, the buyer stops shopping even though they have the option to continue. After all, how many one hour appointments would you make with roofers if you already had someone you trusted (they wouldn't sign if they didn't trust us) and you had already reached a discounted price agreement. With our ten percent discount, we know that the only companies that can beat/match our price are one man/one rusted truck outfits.
jim.... 10% of $5K is $500...
how do you make that up ? aren't you giving away something you don't have to give away ? or do you front-load the bid ?Mike Hussein Smith Rhode Island : Design / Build / Repair / Restore
The average roof is about 8000, so the ten percent is actually an 800 discount. That ain't exactly chump change.
We gave away ten percent on a 15k roof today. Thats a healthy 1500 in the pocket of the homeowner but we walked away with nice roof to build. I had to chuckle to myself when the guy said "Yeah, I'll sign your non-binding piece of paper" in order to preserve his ten percent discount.
The wife chirped in from the couch "I figured you were going to sign because this is the longest you've talked to any of the roofers so far. " It turns out that he had already shopped at least three or four contractors. She said he had ushered some of them out quite quickly.
So, why did he choose to sign our piece of non binding paper? The answer is simple....he wants us to do his roof! And, we want to do it!
So, why would we give away ten percent? Because we want to do at least one roof every day and this was our only lead for the day. Simple economics dictate that we pull out all the stops to get that one job. So we did and we'll deliver the exact same quality roof installation as if we had gotten full price.
That begs the question: are we worried about losing him to a friendly cancellation? Absolutely not! He's interviewed a few contractors and didn't like any of them. Now he's found us. I highly doubt that he is going to sit through anothe 45 minute presenation.
What's your target net profit per job?
Jon Blakemore RappahannockINC.com Fredericksburg, VA
We mark up all hard costs by the .67 factor. That produces a 40% gross profit before sales and overhead. I've been doing that for a couple of years now and, for a small operation, it works. Of course, the discounting will affect the bottom line but I'd rather be booked solid rather than have holes in the schedule.
I forgot to answer your "net profit" question. I don't have enough history and data to answer that question.
I'd at least put a mandatory reach-a-round in that deal.
I gotta put one of those in myself.
I agree the 10% no risk only commits Blue but not the client really. My contracts ask for a 5-10% scheduling fee. If they back out after 3 days they may lose the fee. If they follow through and we start the project the fee comes out of the contract. They risk only if they change their mind.
I have offerred this year a $100 discout for projects over $500 and $25 for projects under $100. This has brought quit a bit of work.
You are offering a much heftier discount than ten percent!!! I don't know how you do that. Are you front loading the offer?
I considered a reduction in my hourly rate of 20% to get work then looked at how this discount might compare. It looked better and I wouldn't have to justify raising my rate later.
At 100 or $500 the discount is strong but most of my jobs run over a grand. Most that run 100 or less I sometimes just do it for the good will and future work.
I was in CA and regietered under my real name. Now that I'm home I can't seem to log on as Bob, just if your wondering.
Bob
Mike ,
I send quotes by e mail all the time . After I've met with the clients and discussed the work needed .
Usually someone has referred me to them so I don't need to sell me , just tell them what the job will cost them .
Works well and you both have a record of what was quoted and how much .
Walter
Do you just use the e-mail or create a PDF attachment?For me it depends on how much money involved and whether new customer or old relationship with trust. Either way, creating a 'paper' trail is good. Right now, I am in the middle of a $200,000 job that has gradually grown for a $2000 design for permit. The lady is kind of flaky, but very nice. I make sure to get everything we discuss on phone confirmed by email because of her quirks. Old money. Methinks she needs help and guidance how to spend and invest it. She looses focus easily. If I ask four questions, she answers one or two of them. I'm a third of the way thru the job and will meet her first time end of this week.
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text and pics -- no pdf needed for my roofing quotes .
I have done quite a few lately. I started doing them because one of my clients was in LA and neede a bid quickly. I convert the MS Word file to a PDF and send it out.My thought is with a PDF they can't mess with the wording and price.
It's a new day and one has to be flexible to the clients needs.
I always convert to pdfs too for the same reason.For those without Adobe Writer, you can use the free program PDFill to convert almost anything into a pdf. (pdfill.com)
There are several free PDF writers, and newer versions of word programs can save as PDF or write to PDF.pdf995 is another.I have a six year old Adobe pdf writer
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
I've also used pdf995. I was quite tempted to send in the $9.95 to eliminate the minor anoyance but then I found pdfill. Either one is great for FREE!
"My thought is with a PDF they can't mess with the wording and price."Absolutely! it is more easily recognized as a legal document"It's a new day and one has to be flexible to the clients needs."Most of my clients are from away and I only see them for 2-3 months in summer. Even then, they like E-comms for docs
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
I have a few that are always gone. They like that they can trust something gets done while their away and they're spared the daily mess. I like that they are gone.I appreciate the trust. I have found that when I made the contract formal and nice looking in the PDF format I have yet to not close a bid.I started offering to e-mail to all my prospects their paper work. I say, if this bid is agreeable, I can bring over thier papers and pick up a scheduling advance at their convenience. If a project offer were to fail it saves me another drive to find out.
On "relatively" small project quotes, yes, I'll email...otherwise probably not. Also depends on if it's for a previous client, etc...
Nicely done! I find that when I can make a good presentation with the financial details clear, and the proportional 'art' work understandable, the client is impressed with the professionalism and forgets anyone else was in the running.lots of little things like that add up to reputation, and like someone else said already, Trust!Trust is a big thing with me. I guess I must have earned it, because I have had clients hand me a deposit check for anywhere from 20K to 50K with no contract and no drawing yet.
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
Thanks Pau...er, piffin...it's because of you, m.smith and sonny that I've traveled down the road that I have...it's still a little rocky (actually very rocky at this point), but I try to learn where I can.J
"
I find that when I can make a good presentation with the financial details clear, and the proportional 'art' work understandable, the client is impressed with the professionalism and forgets anyone else was in the running."
There really isn't anything more difficult that that is there Piff? It's so basic, yet so many want to complicate it.
so basicLet me say how basic I had in mind on the professionalism when I was writing that post.Think we've discussed this in other threads about how clean is the jobsite...I like mine clean.
Not fanatical, but compared to some where they grow a mound of debris as big as a truck and you are up to your ankles in sawdust and shavings all week long, I have had new customers tell me that one reason they chose me was the appearance of the job we were doing for so and so.
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jjf1 - the website address shown on your proposal is misspelled.
Thanks Ben...I was looking at the bbb, the lic. verification...then my own...doh....I do so much copying and pasting, wonder how long it's been like that...2004?
That looks very nice jjf1. How long does it take you to generate those 3d models? Is that time well spent? Do you generate those drawings for all quotes?
Hey JimI usually do some design in chief for any quote, but normally don't do "free" estimates, which as we all know can be interesting. "You DON'T do FREE estimates, oh the humanity!!!" lolThe baseboard quote above was the first "free" estimate I've done in a few years and that one didn't turn into anything, it was much more than they were expecting...guess I shouldn't be surprised as I was giving away my time to them already for "free"...Here's the ceiling drawings/almost finished pics...http://picasaweb.google.com/jjfwoodworks/CofferedCeiling?feat=directlinkNormally I'll just email the clients pdf files during the design stage to get their feed back and make any necessary changes(this is after being paid, of course).I'm currently working on this basement plan and in addition to the pfd files, I uploaded the drawings to a picassa web. I think the pics are a little better quality on the web as opposed to the pdf which suffers some photo/pic clarity due to compression.http://picasaweb.google.com/jjfwoodworks/PremierBasementsAlbumP1?feat=directlink
And as far as time Jim, as you know with chief (and piffin with softplan), you can go into as much or little detail as you wish.The baseboard quote I probably had 10-15 minutes in chief. I can have 20-60 hours into a full basement plan with multiple revisions, and tons of 3-d "shots", which I charge anywhere from $800-$2,500 depending on sq. ft. and amount of detail (or used to, when there was work to be had).The one I'm currently working on I charged $1,200 for as it's fairly small and about 75% of the basement was finished and won't need a ton of tweaking.
jj,
That ceiling looks awesome! Nice work
Mike
Thanks Mike, it was the first time trying gary katz's method and worked out really well.J
I do everything I can via email. Why waste your time with an extra trip. Also I tend to find customers who use email regularly are better customers.
BD,
I have found that as well. I start a separate folder in Outlook for each client and I can essentially track the job in it.
Mike
In this day and age of people complaining business is at an all time low, why would anyone even consider taking a short cut, such as emailing something that should be hand delivered.
I can't say for certain, but I'm pretty sure I've read threads about bad business that you've started. I could be wrong there, as I don't always keep all the players in order. But with every other thread talking about the poor ecomony, nonringing phones and closing the doors, why take the chance. At the very least, if it is becoming common place, hand deliver to stand above the crowd. Vic
Is your profile correct or just a gag ? Says you work in Government !
I pay my taxes, we all work for the government. Vic
I e-mail some particularly for smaller projects that are fairly simple. I prefer to meet but and insist on meeting for anything larger or complicated. Past clients are an exception if I know I have the job and there is a legit reason we simply can't hook up together in a timely manner.