Estimates.

 
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Old 11-01-2009, 01:58 PM   #1
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Estimates.


This may have been covered already in the years you guys have been members and if it has please direct me as to where to look.

In my line of work, it seems everyone gives free estimates. The problem I have with this is that it costs money to drive to the house, takes time to measure the home, takes time to type the estimate up then takes time to go over it the homeowner. This is usually around 2 hours of my time. Whenever I receive a call to do an estimate and tell them that I don't do free estimates they reply with shock. I offer the price of the estimate to be reduced from the contract price if they choose to use us. Often I hear that I will get a call back after they think about it and usually never do. This has happened so much that there are only certain situations (i.e. a realtor) I bring it up in.

My question is how many of you charge for estimates? If you do, how do you bring it up to the homeowner in conversation? Why do so many homeowners expect an estimate to be free? What happened there?

Thanks Guys.
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Old 11-01-2009, 02:13 PM   #2
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Re: Estimates.


We still do free estimates only because our competitors do, BUT

We started charging estimates for anyone that does NOT own or occupy the property they want us to look at. We charge $75 for those estimates and it gets applied to the job if they have us do it.

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Old 11-01-2009, 04:13 PM   #3
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Re: Estimates.


I charge thanks to Mike & a few others, hasn't hurt me in the least
just a few quick threads

http://www.contractortalk.com/f16/ch...timates-60231/
http://www.contractortalk.com/f11/fr...ow-norm-64271/
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Old 11-01-2009, 05:05 PM   #4
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Re: Estimates.


Thanks. I should have searched a little harder!
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Old 11-01-2009, 06:18 PM   #5
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Re: Estimates.


i had to have some plumbing work done and what they did was charge a trip charge which was added to the final bill now if i said their price was to much i still had to pay the trip charge - i think this is what i'am going to start doing
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Old 11-01-2009, 08:03 PM   #6
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Re: Estimates.


I give free estimates , I will do a preliminary plan and proposal for free . I do multiple visits to the house . All for free . Every one in my area gives free estimates . A lot of guys here are working for free all so ,
I'm still getting a fair price . John
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Old 11-01-2009, 09:11 PM   #7
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Re: Estimates.


I give free estimates, but with new customer's I ask for a small deposit if they want me to proceed from there. If the customer wants a bid, specifications, drawings, (hopefully a contract!), etc... I'll ask for 1-2% of the estimate rounded up to the nearest $100. The idea being, that when I take a closer look, if my price is way higher than the original estimate I'll refund the deposit. If my bid is close to the estimate and they turn down the job, I keep the deposit. I've heard that within 10% is the accuracy you want in your initial estimate, and that's what I use.

I've done this maybe a dozen times, mostly with customers who I suspect may be tire-kicking me. A few didn't go along, and I remember going ahead with the drawings anyway with one. All the one's who payed the deposit, I ended up doing the Job for. Once they sign a bid contract, I generally get 1/3 up front, and I take the small deposit off that first payment.

I started doing this last fall after I ran into a couple customers, where I spent a lot of time putting a tight estimate together only to have the project shelved after I did a lot of leg work on it.

One last note, by doing this, I've grown a little looser with the first estimate, knowing that if the customer is serious, I can put the serious thought into the bid, to arrive at an accurate price. You can easily stay within your price range by choosing your specifications. If they want to upgrade the specifications, that's a change in scope, so your covered.

In the last year, I haven't quoted any jobs were the customer had the specifications in hand. If that were the case, I'd have to do the initial estimate a lot more carefully (like the older days).

Last edited by NormW; 11-01-2009 at 09:14 PM. Reason: garbled...
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Old 11-02-2009, 06:16 AM   #9
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Re: Estimates.


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Originally Posted by ampman View Post
i had to have some plumbing work done and what they did was charge a trip charge which was added to the final bill now if i said their price was to much i still had to pay the trip charge - i think this is what i'am going to start doing
I am curious to know what will happen if the HO refuses to pay the trip charge after the fact?

Is this something you would collect before looking at the job or something you would bill them for?

Do you give on site estimates or something more detailed in a day or so?

In other words, you inform them of the charge, they agree to it, you make the trip and submit an estimate. Now they don't have you do the work but also say 'screw paying that trip charge'.

How will you assure you get paid?
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Old 11-02-2009, 07:57 AM   #10
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Re: Estimates.


I must first say that I agree, we should get paid for our time involved with meeting, proposing, designing, drafting etc.

BUT, I believe the majority of these "charge for estimate" discussions are misguided.

Is the $25, $50, $75 estimate fee going to keep you in business or out of the poor house? Of course not.

Why risk a sale for such a small amount of money? Sure you get compensated for your time. But why not take a different approach and focus your attention on providing a "slam dunk" presentation/estimate to ensure the sale.

There will always be those tire kickers out there. But in most areas, at least currently, I would imagine most are not charging for estimates and probably never will. Therefore, it makes it very difficult for those of us to justify this initial expense to the HO. You will waste your time on occasion but even tire kickers talk and possibly refer.

Some have such a lock on their market that they can charge for estimates. BRAVO to you.

But for those of us who operate in very competitive areas/markets, the same probably won't apply.

Focus on the sale and the long term gain by establishing a new customer! Forget the instant compensation.
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Old 11-02-2009, 02:55 PM   #11
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Re: Estimates.


I'm gonna take a stab and suggest the reason you're frustrated is because these estimates aren't turning into business which would absorb the cost of the expenses to give the estimates.

I would focus less on charging for estimates. (Almost EVERYONE gives free estimates anymore--I don't even know why it's stated really) I would ask myself "What can I be doing during my estimate process to ensure that I will be getting the customer's business?" Establishing three things is usually the most important for me.

The Law of Authority: The HO needs to feel you're highly skilled in your trade. Your a consummate professional. You know what you're talking about without question. You can't actually state this. The homeowner needs to feel this in your presence and personality. this establishes trust and people only but if they trust you. Are you accomplishing this as well as you can?

The Law of Scarcity: "I am only able to take on a certain number of jobs each year so depending on your project and timing I may not be able to take it on." It's okay to tell a homeowner this once you've determined what his schedule is. Then just "happen" to have that slot if you can get in on the calendar. They have to have a valid reason to move forward and move now. Alot of HO's really don't WANT to get other bids and sit through a lengthy process. They just want someone they can trust, that's going to give then what they want, at a price they can afford...period. But they don't want to get screwed and have someone ask them "How many other bids did you get?" and then look like an idiot! Also this creates a sense that you're in demand. You're a busy guy and people want your service but you can't give it to everyone. Most everyone wants to align with successful people and so do HO's.

The Law of Reciprocity: "I'd be willing to take this job on if I can fit this within a certain timeline. If you're willing to do that I'd be willing to make a concession on the pricing. Otherwise, this is what we're looking at assuming I'll have the availability. This is the old "I'll scratch your back if you'll scratch mine." HO's want to feel like you're bending over for them. I'm willing to do this for you if you do this for me. "I'll cut the price if you can fill this slot in my calendar...otherwise I'm taking the kids camping that week and this is the price instead. I know it's a little higher but I'll have to give up a job elsewhere and lose that money...I'm sure you understand Joe. You want to get this scheduled and get it out of the way while we're all together?"

Work on closing more and closing quicker and soon you'll forget about how much time and gas you're spending because you'll be making a ton more money!
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Old 11-02-2009, 03:36 PM   #12
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Re: Estimates.


Truthfully, I am not frustrated with it, I just can't understand why certain trades you know the cost is coming as soon you call them. Plumbers and Electricians charge just for showing up before they even tell you the cost of the fix or the job. Why is it that the one trade that protects (your roof) the plumbers work, electricians work, the 80000 dollar kitchen some of you guys get to install is the one trade that everyone automatically assumes does not have a cost attached to it until you agree on a price and sign a contract?

I have a good idea of why that is but when I spend a day of going on estimates and meeting with homeowners it would be nice to make money off of the people who just want to waste my time for a price. That is one reason I say there is a charge, to determine how legitimate the customer is on getting the requested work completed. There are jobs going on while this estimating is being done though so in that way, at least its not a total wash.

I do however appreciate your advice and ways of looking at it.
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Old 11-02-2009, 03:49 PM   #13
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Re: Estimates.


Quote:
Originally Posted by BamBamm5144 View Post
Truthfully, I am not frustrated with it, I just can't understand why certain trades you know the cost is coming as soon you call them. Plumbers and Electricians charge just for showing up before they even tell you the cost of the fix or the job. Why is it that the one trade that protects (your roof) the plumbers work, electricians work, the 80000 dollar kitchen some of you guys get to install is the one trade that everyone automatically assumes does not have a cost attached to it until you agree on a price and sign a contract?

I have a good idea of why that is but when I spend a day of going on estimates and meeting with homeowners it would be nice to make money off of the people who just want to waste my time for a price. That is one reason I say there is a charge, to determine how legitimate the customer is on getting the requested work completed. There are jobs going on while this estimating is being done though so in that way, at least its not a total wash.

I do however appreciate your advice and ways of looking at it.
Do like leo does and charge $1....then ya know for sure there is absolutely no value to your time in the eyes of your prospects, if they don't want to pay $1.
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Old 11-03-2009, 03:52 PM   #14
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Re: Estimates.


Quote:
Originally Posted by bert0168 View Post
I am curious to know what will happen if the HO refuses to pay the trip charge after the fact?

Is this something you would collect before looking at the job or something you would bill them for?

Do you give on site estimates or something more detailed in a day or so?

In other words, you inform them of the charge, they agree to it, you make the trip and submit an estimate. Now they don't have you do the work but also say 'screw paying that trip charge'.

How will you assure you get paid?
they could refuse to pay after work is completed most of the time if a cust agrees to pay a trip charge they will
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Old 11-03-2009, 09:31 PM   #15
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Re: Estimates.


Quote:
Originally Posted by BDiamond View Post
I'm gonna take a stab and suggest the reason you're frustrated is because these estimates aren't turning into business which would absorb the cost of the expenses to give the estimates.

I would focus less on charging for estimates. (Almost EVERYONE gives free estimates anymore--I don't even know why it's stated really) I would ask myself "What can I be doing during my estimate process to ensure that I will be getting the customer's business?" Establishing three things is usually the most important for me.

The Law of Authority: The HO needs to feel you're highly skilled in your trade. Your a consummate professional. You know what you're talking about without question. You can't actually state this. The homeowner needs to feel this in your presence and personality. this establishes trust and people only but if they trust you. Are you accomplishing this as well as you can?

The Law of Scarcity: "I am only able to take on a certain number of jobs each year so depending on your project and timing I may not be able to take it on." It's okay to tell a homeowner this once you've determined what his schedule is. Then just "happen" to have that slot if you can get in on the calendar. They have to have a valid reason to move forward and move now. Alot of HO's really don't WANT to get other bids and sit through a lengthy process. They just want someone they can trust, that's going to give then what they want, at a price they can afford...period. But they don't want to get screwed and have someone ask them "How many other bids did you get?" and then look like an idiot! Also this creates a sense that you're in demand. You're a busy guy and people want your service but you can't give it to everyone. Most everyone wants to align with successful people and so do HO's.

The Law of Reciprocity: "I'd be willing to take this job on if I can fit this within a certain timeline. If you're willing to do that I'd be willing to make a concession on the pricing. Otherwise, this is what we're looking at assuming I'll have the availability. This is the old "I'll scratch your back if you'll scratch mine." HO's want to feel like you're bending over for them. I'm willing to do this for you if you do this for me. "I'll cut the price if you can fill this slot in my calendar...otherwise I'm taking the kids camping that week and this is the price instead. I know it's a little higher but I'll have to give up a job elsewhere and lose that money...I'm sure you understand Joe. You want to get this scheduled and get it out of the way while we're all together?"

Work on closing more and closing quicker and soon you'll forget about how much time and gas you're spending because you'll be making a ton more money!
Good suggestions.
Anytime the customer asks for something, get them to reciprocate on something. A customer may ask me to lower my price and even though I knew I could and be ok, I would ask them for a higher down payment or something else like pick up the scraps every day. It always worked for me.
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Old 11-03-2009, 09:44 PM   #16
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Re: Estimates.


During the past couple of years of my adventure in the construction business I did this on following up leads.

First, I'd make an appointment for a walk through. This visit would serve to see what they wanted to do and give me a chance to take measurements.
I'd work up a loose estimate base on that walkthrough.
I'd give them the number telling them it was a barn yard figure based on doing things with material bought from a local lumber yard if they wanted it..
Then if they were interested in me following through with them I'd ask for a fifty dollar deposit that would be applied to the job once they decided to go with it.
Then I'd work up my material lists, my costs and time frames and draw up the plans. I'd get my subs like the plumbers and electricians to give me figures based on the plans.
Then I'd write out the contract in great detail and give the owner the contract and the material lists after I got the 50 bucks. I never had anyone not want to give me the deposit. I didn't call it a estimate fee.
The fifty was just a show of faith on their part. I recooped the rest of my expense off doing the estimate in the job.
Of course, any deviation off the work and material list would have to be charged to the job.
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Old 11-03-2009, 10:25 PM   #17
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Re: Estimates.


I dont have to give estimates we are locked into a price.
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Old 11-03-2009, 10:29 PM   #18
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Re: Estimates.


4.46 for internals., and 2.25 for exteriors
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Old 11-04-2009, 09:05 AM   #19
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Re: Estimates.


I have done it both ways. If I get the impression the HO is kicking tires I will ask for a small amount before I hand off any paperwork. Sometimes it works and sometimes not.

I handed off an estimate yesterday for a church vestibule demo and rebuild and knowing that a church is usually tight when it comes to spending, I tried this tactic:

" I usually charge a processing fee for the leg work and research time on an estimate. That amount is taken directly off the top should we close the deal and sign a contract. However, I'm going to waive the fee for you since this is a church which basically runs off of its members donations and tithes. Plus I'd like to get the job and be able to keep the costs to a minimum for blaa blaa blaa.

I almost didn't bring it up at all because I didn't want to sound desperate to work, but I slid it in at what seemed like the right time and the men I was meeting with seemed to appreciate the gesture.

We'll see.
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Old 11-04-2009, 10:15 AM   #20
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Re: Estimates.


"Why risk a sale for such a small amount of money? Sure you get compensated for your time. But why not take a different approach and focus your attention on providing a "slam dunk" presentation/estimate to ensure the sale."

Never seemed like a risk to me. Site traffic hasn't changed much. Calls are fewer. I'd get 10-15 calls, and sell one job.
Now, I get 2 to 5 calls and 4 of 5 are 'pre' sold before I go look at the job. Saves a lot of riding around, imho.
No, I don't have a sales pitch. I just offer a good service, and solid workmanship.

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