I did a new house a while ago and this year they asked about some other work which I was happy to do for them, including a deck. While we were spec’ing it out he encouraged me to just go ahead and build it without a specific cost estimate – they were happy with the work I had done for them and with the price and they asked to skip the cost estimate part and just build the thing.
So I did.
Now they have a nice new deck. Everything just as it should be with a few tweaks and upgrades.
When it came time for billing they were surprised at how high it was.
They paid, we’re all good. But a really great project and a fantastic customer relationship ended off on a bit of a sour note because I didn’t insist on following through with the initial numbers.
Note to self – give them the numbers.
Note to customers – lots of nice ways to compliment your builder, but let him give you the numbers.
j
Replies
Just did the same thing last week.. And now I am intent on getting proper estimate worksheets going, along with contracts.
“Good work costs much more than poor imitation or factory productâ€â€“ Charles Greene
<Good work costs much more than poor imitation or factory product>So true. It's just nice if everyone's aware from the start that's going to be the case. j
When it came time for billing they were surprised at how high it was.
Been there, done that. Never again.
I hate negotiating after the work is done. They hold all the cards. They have all the leverage.
I have a lot of repeat customers that do the same thing. I always caution them by saying, "you know that's going to cost somewhere around $XX, depending on the details and materials you want". I don't need to do a specific estimate. Experience has taught me what most things cost, enough for a ball park price. If that shocks them, we can sit down, get specific and look for ways to meet their budget and wants. Over the long term, it's the repeat customers, their extended families and friends that keep the jobs coming in. You don't want to alienate a good customer or do a job that's beyond their means. Losing one customer may mean losing ten.
Beat it to fit / Paint it to match
Your strategy is sound, assuming that your final figure ALWAYS COMES IN LOWER!
<or do a job that's beyond their means>that's true but I have also UNDERsold a customer or two in the past. People who were, looking back on it, eager to spend more money for a more elaborate project than I gave them credit for. I'm getting better at that balance but ...j
I brag all the time about equipment I sold with nothing more than a phone call.. However as soon as I'm back into the office I wiped up a quote and sent/ brought it to them..
Never had anyone back out because of exactly the reason you said.. Respect for me and the way I conducted business.
Are you saying you only bill once; at the completion of the job?
My estimates are almost always irrelevant in the long run, partly because I'm optimistic, but mostly because clients always, always add to the program. The only way I stay ahead of the sticker shock is by billing frequently, with commentary about actual versus estimated cost, and initial versus revised scope.
I find that if you bill frequently, you're forced to communicate frequently about cost. While that can be a drag, it is better in the long run.
Not that no one ever looks back at the total and says something, but there's never that one terrible moment- "It cost HOW much?!!?".
k
<Are you saying you only bill once; at the completion of the job?>On small jobs - let's say below 5K total cost - I usually bill on completion unless there are red flags during the spec'ing process, in which case I'll take a deposit before start, 50% at some defined point along the process, and balance on completion. Bigger jobs - over 10K total or so - progress payments are set up at whatever stages make sense to me for that project. Work stops and I start working for other people if a payment is delayed. Doesn't happen often but every now and then. I haven't been completely burned yet, although I have held my breath and wondered a couple of times. j