Charge For An Estimate?

hauoli63

Hello everyone,

I just found this forum and am very pleased with what I've read! My husband and I own a plumbing/remodeling business in Northern Virginia and we do not currently charge potential customers to do an estimate for things such as basement baths, bathroom remodels, running a gas line, etc. But, we are starting to feel like my husband spends so much time doing these estimates, that we of course don't get all of the jobs for, and are considering starting to charge. It also seems as if people just want to know approximately how much something will cost before they decide to add a bathroom or a gas fireplace ... and so on.

So, my question is .... what do most contractors charge (if anything) for an estimate? I've thought of calling around to other companies in the area, but I don't think that would be right!!

Thank you in advance,
Lisa

Edit: Added a poll!!

Grumpy

I try to close estimates for repair work at time and material (T&M) over the phone. Most repair estimates I won't even run unless I have something going on real near bye.

I'd love to charge for estimates but it just doesn't work that way in my business. There are so many guys willing to give their expertise away for free in my industries. NOW take the hvac or plumbing industries, in my area unless you are planning on abuying a new system you are paying for someone to ring your door bell. They don't even do estimates, they send out a repair man. They're onto something.

Mike Finley

We have a very successful company in our area that charges $29.95 for a trip charge. They have obviously spent a lot of money hiring marketing people because in their ads they just about have you convinced that anybody who isn't charging a trip charge is not worth having come out to give you an estimate.

hauoli63

We are a plumbing contractor and have switched to Flat Rate Pricing which includes a "trip charge" of $49 ... which we actually call an assesment fee. If they decide to have us do the repairs right then, we waive the fee ... if not, we charge the fee to cover a portion of our expenses for going to their house.

But, my concern was more with the estimates that we give for larger jobs such as remodeling where we go look at their project, discuss their needs, and then give them a proposal. We haven't been charging for this, but there is a lot of time involved and it seems as if a lot of people are just price shopping. So, do others charge for these types of estimates? One call I had just today asked if we charged for estimates and said another company charged them $85.

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~~ Lisa ~~

www.chantillyplumbing.com

Mike Finley

Lisa, that is easy. No way, no how would I advise you to charge for an estimate for anything that is not repair work.

Not only have I faced this situation myself but I have discussed it many times with others and the perception when it comes to jobs ranging to several thousand dollars is that customers do not like paying you to do what they consider and more importantly percieve to be part of the process you need to go through in order to tell them what something is going to cost them if you are to do it.

When I needed a new electrical service and about $6000 worth of new wiring circuits installed I refused to pay somebody a trip charge for the priviledge of them coming out and telling me what they would charge.

hauoli63

I know as a homeowner I wouldn't want to pay for an estimate ... just hate spending all that time and lost revenue for estimates that never pan out ... but, I suppose that is all part of the process.

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~~ Lisa ~~

www.chantillyplumbing.com

Floorwizard

In my industry, I would never charge for an estimate.
The big box store's do, and they will credit the invoice if you buy from them.
But there is no need for me to do it, because I can tell a tire kicker from a person who is interested and is a buyer.
Although I usually do not go on BLIND measures. I always encourage them to visit the store, or else my estimate will be anywhere from 500 to 5000.
How am I supposed to know unless you visit my store and select flooring?!

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"in 20 years you will regret more what you did not do than what you did"

Grumpy

Lost revenue nothing... First off know your numbers. How many estimates does it take to equal a job? How much time does it take per estimate on average? How much would you bill out for that time? Now mark up all your jobs that number.

There you just broke even. All estimates are paid for, the reality is that the customers who choose to buy pay for those who do not buy. Your money comes from the installation of the service, not from the time it takes to estimate the service.

Hell I agree, I'd love to charge too! I just can't do it because if I did I'd be broke. I play the hand I was dealt because there are no draws and my only other option is folding.

hauoli63

Good point!

__________________
~~ Lisa ~~

www.chantillyplumbing.com

Teetorbilt

I have a min. charge of $50 within a 5 mile radius. It really helps weed out the tire kickers.

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You can't solve you're problems with the same level of thinking that created the problems.

Albert Einstein

mdshunk

I wish that I could vote "sometimes".

I don't charge for regular people and contractors. I have started to charge for insurance estimates and estimates for REA's.

hauoli63

What's an REA?

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~~ Lisa ~~

www.chantillyplumbing.com

Teetorbilt

Real Estate Agent

__________________
You can't solve you're problems with the same level of thinking that created the problems.

Albert Einstein

Leo G

I have found a very simple way to weed out people just price shopping and wasting my time. I charge them $1.00 for an estimate. You would be surprised at how many people think that it is outrageous that I could possibly think to charge them a dollar for what they think should be free. Heck, I have to spend more than that in gas just to get to there place let alone the hours I usually have to spend to get them an accurate and reasonably estimate. It seems to be a very effective way to find the real buyers and people just looking. I usually don't even collect the dollar, just have to ask for it over the phone and you'll find out who is really interested in starting a job and who is really just willing to waste my time.

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Sawdust Follows Me Everywhere

http://lrgwood.com
Custom Cabinets in Hartford County Connecticut

Teetorbilt

Leo, My time is much more valuable than that and, after seeing your work, your's is too. Early on I learned that free ests. were a losing proposition.
A dollar may work for you but I want my customers to think harder. The majority of my customers understand business and aren't insulted.

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You can't solve you're problems with the same level of thinking that created the problems.

Albert Einstein

Leo G

Thanks for looking at my website. This trick seems to work pretty good for me. I get yes answers to 90% of my calls that I use the dollar bit on. I'm going to have to start raising my prices soon, I am getting a very long backlog. Or the second option is to stop working solo and get me some help.

__________________
Sawdust Follows Me Everywhere

http://lrgwood.com
Custom Cabinets in Hartford County Connecticut

Teetorbilt

Leo, my woodworking is out almost 2 yrs. and I have a 7 man shop. I am more eclectic and use exotic woods.
I'm composing a letter for my bread and butter businesses due to fuel prices alone. I've also been stagnant for 3 yrs, I'm just too lazy to revamp everything.

__________________
You can't solve you're problems with the same level of thinking that created the problems.

Albert Einstein

ProWallGuy

Ditto. :Thumbs:

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Wallpaper Hanger St. Louis
Digital Murals Installation

Glasshousebltr

I didn't see a link for charging flower chic for the vote.

Bob

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Bob

PipeGuy

All that is fair enough Mike, and I think the same way, BUT....

What do you do if someone wants a proposal for work that isn't yet financed (they need estimates to document a loan application). What if the work may not even actually go forward with the current owner? Do you walk? If not, do you limit the extent of the time you'll put into the process? Do you tell them the price could be more? or less?

I'm really pissed off these last couple days about what I perceive to be the widespread expectation that contractors (in my trade) are estimating houses for fence sitting customers. Why on earth, if your product is considered a commodity (which our services often are) should a buyer be affored the opportunity to purchase the product at the quoted price at any time other than that moment when the quote is published? My costs can go up daily (and do). Why do contractor's put up with this sh*t?! Car salesmen have it better and their products are rigidly specified and produced in factories.

I realize that Grumpy's right when he observes "All estimates are paid for, the reality is that the customers who choose to buy pay for those who do not buy." Somehow it still seems a bitter pill to swallow. Somehow it seems there ought to be more Teetorbilts amongst us -requiring the piper to pay for the dance.