[Patty]

Mike Finley's post regarding website customer requesting "design only" made me think of something. This could be a real money-maker for those who have expertise in certain areas.

Here, in the Chicago area, many degreed electrical engineers will offer a new homebuilder consultation, much like an interior decorator does, for a fee.

You can actually contract a person, for a fee, to consult on such things as electrical outlet placement (indoors as well as outdoors). A friend of mine built a beautiful home in a town called Winnetka. For those of you who are unfamiliar with the Chicago area, Winnetka is a very upscale community where home values start upwards of a million dollars and climb to the $15 million mark, if they are on Lake Michigan....some might be even more.
Anyway, she doled out $600 to this "electrical consultant" and felt she got her money's worth, and then some. And, I guess the way she initially heard about this person was by attending a builder's new construction open house.
Apparently this person is used a lot by builders who build high-end houses and they allowed her to leave her business cards at the open house site.

Here's where I'm goign with this. What would prevent you from offering design and/or consultation for a fee? Are there educational or certification qualifications required to perform this type of work?

I see money in them there hills!

[Gordo]

Patty,
Excellent thread. For the last 2 months I have been wondering if there is a market for things like this. Follow my logic if you will. Homeowner calls and wants an estimate performed for a bathroom remodel. This person was referred by a client. Person says, "I am getting 3 estimates and you are the first person I called'. I say I can spec the entire job for $x so everybody knows exactly what to expect to bid on. The selling point will be there will be minimal surprises in the bidding process to give the home owner a better ballpark figure with which to work. (We all know how wide estimates can vary when the homeowner sometimes shows them to you). Some estimates include the bare minimum so the numbers look attractive, others are right on and are spec'd to the tee. This could be a way around the free estimate scenario. Another idea is to market via forms of advertising the same process above. The selling point is proper licencing (Class "A" BLD), knowlege (20 years), and a desire to do things right. Has anybody tried this before? I think it would take a while for people to realize it would do them some good. Kind of like the doctor prescribing the right medicine.

[Cole]

I think both of you are onto something.

I am going to do some more thinking on it.

[Gordo]

Just to reiterate farther.I do not how the market is in your parts, things are jamming here. I have all my regulars who do not ask for estimates (we have a good business relationship already). It is those second and third generation word of mouths that I would like to market to. It seems like a way to both streamline the estimating process into a profitable operation, while weeding out the dreamers (on the word of mouth side). On the advertising side you are building reputation while generating cash flow. Chime in. This site is full of opinions no doubt.

[IHI]

It's a great concept, but this area is far from booming economically and no matter what for 80% of jobs being bid low price wins the job. For quite some time since I learned of the low ball tactic performed by many bigger companies-going in with an outragiously low price than start tacking things on throughout the project to wind back up where I was at on my estimate-I've really tried to work on this aspect of educating customers of low ball bids.

Even after I explain they will almost always fall victim to "contractor problems" when they go with the low ball,l or that the larger "reputable" companies that have been around for years and years will do the low ball then add-on the price will almost always come out in the wash, I'm just presenting a solid number that you can fully expect pay for everything...I will not say everytime they go with low ball since I do get jobs, but I lose more than I get by trying to be honest and at this time I dont think I've buried my concious enough to blantly lie to people to win a job....kinda of the reason I'm been keeping my eye out for a salesman, let them do the dirty work.

Back to topic though, I do think in economically thriving areas this concept could be one that seriouos folks might take advantage of if the cost was right. Kinda hard to be an outside "rep" and get this kind of business based on figuring what it should cost if there is no hook of, "if you go with us then we'll wave the investigate fee".

[Aceinstaller]

I've found that most people in need of new construction will have bids that have already been "investigated." This is what makes it so easy for them to go to the bank and recieve a construction loan with the least amount of setbacks. The G/C and the homeowners will sit down and he will give them a price for bare minimum, they will have some time to make their upgrades. then return the changes to the contractor and come up with a final price to begin writing up a contract.

The problem with remodeling, is that there is no time or effort for this kind of scenario because generally homeowners are looking for "free estimates".

What contractor in his right mind is going to take the time to help design, quote, let homeowners make the upgrades, then return to the contractor forming a final bid. If some unlucky contractor goes through all of this consulting and designing, it would be almost garaunteed that the homeowners will receive other bids on the completed homework of the above stated contractor. Therefore it would be necessary to remove the "free estimate" hook in your advertising, and charge consulting fees.

With this bieng stated, one way that sounds reasonable is to give the bare estimate for free(as usual) stating in the estimate that this includes everything involved in the rough construction to our companies pre-engineered specs. Then include a sheet of your companies specs to the homeowner with your bid: basically a sheet describing all of your companies preferred building materials....pine trim base-colonial, laminated countertops, oak cabinets(any finish), and so forth.)

At the bottom of your bid, include a clause that: any changes to the included spec list for construction materials made by the customer can be changed at any time before construction commences, accompanied by a consulting fee and an adjusment of the cost in relationship with the difference from the stated spec material from the attached list. Changes can also be made during construction, bieng accompanied by a change order cost as well.

Adding this sheet to your estimates will give you the ability to charge for any consulting and change orders, as well as give you the ability to give fast accurate bids. The bids will also be very low compared to most competitors given the fact that you are using the materials that you are comfotable with.

Basically, you are doing what the big companies are doing by lowballing and tacking things on, but in more of an honest way by informing the customer thouroghly.

I had this idea on a kitchen remodel and used it recently. It worked quite well since I hate going to the kitchen supply and basically designing the kitchens with homeowners for free.

[Gordo]

Ace I see whay you are saying. The position I am coming from is being the first "bidder" to a new potential client. I do not like being the first bidder because they usually do not know what they want. I know what I would do as far as the "scope of work" because like most of you I can do this stuff in my sleep. I have found myself doing all the designing/pre-inspection of plumbing and electrical/ and consulting work (usually 3 hrs. per job.... bigger jobs sometimes 16 hrs.) (we remodel kitchens and baths) only to lose the job to the handyman or low baller using my ideas then finding "surprises" to jack the final price.What I am proposing is to set the bidding process on an even plane by providing a "spec list" for the homeowners to provide to all "bidders". This is an apples to apples approach we all like. I think the homeowner would like it as well from a simplicity stand point because knowledge is power. The knowledge will not be free and will come at a price in the form of a consulting fee. Now lets turn the tables and say you come in as the second bidder....would it not be nice to see a spec list while you are looking at the job. You would not be guessing what they want/what you are bidding against....takes most variables out of the equation. So you might be saying well the first bidder got his consult fee (hourly rate X hours) what about the second bidder? They charge a service charge fee to come look at the job (hourly rate) to give a ballpark price. Same for the third bidder and so on. This is what all professionals do (doctors, lawyers, architects,designers,engineers).Why should it be different for contractors dealing with homeowners? I think this idea would only create a sense of legitimacy/professionalism with prospective clients. I am waiting to try the idea on a new prospective client but have not had the opportunity because we are busy with our repeats. Keep the comments coming. Has anybody tried this ?

[Aceinstaller]

gordo,

you have establised that you know what is involved in your scope of work. by providing a sheet of basic installation materials that you are familiar with costs and labor hours, it will be a piece of cake to give an extremely accurate bid. meanwhile providing the customer as well as other contractors with the facts in writing(apple to apple).

This is just a standard of installation to be able to estimate jobs with new clients with a free estimate. If they call you to write a full contract and schedule and finished budget for their project, you will have the ability to charge a consulting fee for putting all of the final adjustments in to help meet their specific requests. I have run across many unsatisfied customers due to "allowances". If they had payed the small consulting fees to adjust their contracts with these contractors in the beginning, before construction, all of the guesswork is taken out of any given project. This means less downtime due to descisionmaking and change orders, as well as less confusion and dissapointment with the final price.

Bieng the first bidder or the last, you will have provided the standard of constuction that your company is bidding in your "spec sheet" and it is stated in writing that the customer has the ability to make any changes for their home to whatever they would like to if they have the budget to do so. And that you would be happy to work with them in making these descisions for a small consulting fee.

What i'm saying is, don't worry about a lowballer that gives the lowest bid, then jacks his price in the end. he will never have any repeat business, or referrals. soon enough he will be out of money due to all of the advertising necessary to stay busy and go under.

instead, I have been trying to come up with a fast, honest and accurate way to give bids that will make customers have more trust in our relationship, and sleep better at night knowing that they are fully informed. all of the while, getting paid for my time because I am not a charity......

[Paul Burns]

I think you all will be pleasently surprised.
I am a painting contractor and have been paid 100.00 for estimates.

We tried it when we moved but then backed away. We will try again soon. I was surprised at how most people that I have mentioned it to, don't seem to think it is out of line either.

Actually, we include an apples to apples low price guarantee with our proposals. So nobody should have a problem with it. The price for the estimate will either get credited to the job if we do it, OR we give a full refund if they find a better price anyway. When the client is in a no lose situation, the only reason for them to decline, is if they are tire kickers which none of us want anyway.

Also, always be different than the competition! What's not to like?

Thanks for reminding me.

Pawl

[Gordo]

Originally Posted by Paul Burns

I think you all will be pleasently surprised.
I am a painting contractor and have been paid 100.00 for estimates.

We tried it when we moved but then backed away. We will try again soon. I was surprised at how most people that I have mentioned it to, don't seem to think it is out of line either.

Actually, we include an apples to apples low price guarantee with our proposals. So nobody should have a problem with it. The price for the estimate will either get credited to the job if we do it, OR we give a full refund if they find a better price anyway. When the client is in a no lose situation, the only reason for them to decline, is if they are tire kickers which none of us want anyway.

Also, always be different than the competition! What's not to like?

Thanks for reminding me.

Pawl

Interesting. Do you provide a written spec'd proposal with the consult fee on the spot or do just give a verbal ballpark and say that will be $x for my time?

[i_plant_art]

WIth my landscape business we offer design only consultations at a per hourly basis. I have a computer program with design software on it where i can take a pic of the home or area upload into my laptop and then design on top of it putting plants in place brick, water features, change the color of the home etc etc all while doing so on my laptop right at THEIR kitchen table. I can even put an "aging" on it to show what it could look like 1, 3 , 5 ,10 years down the road. I would set an appointment with them, email over my contract for the to sign, pick it up when i got there ( it explained how it works time, charges etc etc. When i got the i would get the contract then "start the clock. I had 2 part "log forms " pre printed and designed by my advertising designer. fill them out with the time of begin , ending and notes of the job and then go to work. I would design their landscape. Usually (it changed somewhat based on the job) the first hour was $145 and then every hour after that was $70 billed in quarter hours (rounded down to the nearest.) if they wanted to get a copy of the file or for me to print it it was an additional $15 THey had no obligation to use us to install it or anything. It worked like magic. MOst of time i would do these at night after working all day, or even alot were done on the weekends. Sometimes some would want me to get the pics then we would go out to lunch and design it there or dinner. It worked out really well. I would recomend it to anyone to add to thier servuces. we called it "design consultation". If they decided to us us for the job i could even print out a detailed list of materials, and the total job cost broken down however i wanted it to. I worked for us and could work for many other fields out there as well with some thought.

[Aceinstaller]

Nice post iplantart,

We do have a lot of programs that have those capabilities, and i'm trying to become efficient enough with one to be able to do consultations with these in home with customers.

Usually, in construction, it is necessary to have an architect or engineer or both approve and stamp any plans that we would come up with.

saying this, it is usually easier to sub this work out to an architect,(bieng that it would take too much time from the construction end of our projects) or reccomend that the customer present the pre engineered plans.

I would like to use this software to copy these plans into a 3-d enviornment, to help show a walkthrough with my "spec sheet" products to aid in the descisionmaking of homeowners preferences during a consultation.

during this consultation, we will wrinkle out all of the variables concerning the project and come up with a rock solid budget and contract before construction commences.

I assume that it is the same in landscaping, but if you read mine and Gordos previous posts you will find that our main goal is to form a system to compete with the "lowballers". all the while informing the customer what this kind of price will bring along with it, and not spending too much unwanted time on each bid creating "tire-kickers". If a lowballer can give these people marble floors and granite countertops with the appliances included for our "spec" price, let him lose his a$# on the job.

I feel that this "spec" pricing will give us an efficient way to knock out many estimates to a lot of leads, and when they bite, we will charge a consulting fee to do a 3-d walkthrough and fine tune the project with extras. draw up the final contract, and start work.

I love the idea of giving them a consulting contract to ensure payment of time spent. that way, even if they decide to use another contractor after you've drawn out all of their needs, you still get paid for your time.

[Mike Finley]

Originally Posted by Aceinstaller

gordo,

What i'm saying is, don't worry about a lowballer that gives the lowest bid, then jacks his price in the end. he will never have any repeat business, or referrals. soon enough he will be out of money due to all of the advertising necessary to stay busy and go under.

This is with all due respect a naive theory. Maybe in a small town it holds true but is certainly not the case in any decent sized market. There are many, many, many companies that are extremely profitable that repeat and referrals are not even on their radar. They can feed their advertising budget quite well with fresh customers paying above average prices for their work. I see it and know of it personally. In a small town I would agree with you.

[Mike Finley]

Originally Posted by Aceinstaller

The problem with remodeling, is that there is no time or effort for this kind of scenario because generally homeowners are looking for "free estimates".

What contractor in his right mind is going to take the time to help design, quote, let homeowners make the upgrades, then return to the contractor forming a final bid. If some unlucky contractor goes through all of this consulting and designing, it would be almost garaunteed that the homeowners will receive other bids on the completed homework of the above stated contractor. Therefore it would be necessary to remove the "free estimate" hook in your advertising, and charge consulting fees.

Once again in theory this might sound logical but in practicality it is a bit far off of target.

If some unlucky contractor goes through all of this consulting and designing, it would be almost garaunteed that the homeowners will receive other bids on the completed homework of the above stated contractor.

actually with the proper person in place doing the process you are describing the customer has so much buy in and time invested that the costs in time alone is prohibitive enough to keep them from what they perceive as starting over again with somebody else. Establishing some basis of trust is all it takes for a customer in this position to weigh the opportunity costs involved in starting all over again vs the chances that the person they are dealing with isn't going to be far enough different in price to make it worth while.

What contractor in his right mind is going to take the time to help design, quote, let homeowners make the upgrades, then return to the contractor forming a final bid.

That process is exactly what continuously can set you apart from the herd in the remodeling biz. When you are able to transform you customers perception of your services from just being labor to install something to being a service that can solve their problems from point A to Z you will find the right customers extremely receptive to signing your contract. Granted the key is also understanding that not every potential customer qualifies to be your customer and you have to target your marketing to bringing in the right demographic that wants this type of service.

[Aceinstaller]

Quote mike finley:
That process is exactly what continuously can set you apart from the herd in the remodeling biz. When you are able to transform you customers perception of your services from just being labor to install something to being a service that can solve their problems from point A to Z you will find the right customers extremely receptive to signing your contract. Granted the key is also understanding that not every potential customer qualifies to be your customer and you have to target your marketing to bringing in the right demographic that wants this type of service.



This is the point that i'm trying to reach. I'm sorry if you read my post out of context. I would like to develop a system of presenting base estimates to a large number of my potential customers, while reeling in the leads that are in the market for this type of service. and already having them informed of the costs of the consultation. avoiding large amounts of time on non-potential customers.

I also feel that this service will make the construction process much more smoother, and give me the ability to write more accurate contracts.

All I'm saying is, that we shouldn't do all of this work for FREE.

[Paul Burns]

Originally Posted by Gordo

Interesting. Do you provide a written spec'd proposal with the consult fee on the spot or do just give a verbal ballpark and say that will be $x for my time?

Gordo,

We have been doing our proposals with mini laptops and desktop printers in our trucks since about 1995 or so. We have pre-packaged folders with all of the pertinent iformation already to go. So we just walk around homes with mini laptops and punch in hours for each piece.

Then when we get back to the truck, we just plug in the usb cable and have the proposal in full color within minutes. I can insert anything onto the proposals and have asked for deposits and received them. I think we will go to asking 100% of them soon. When we tried last time, it was just a test. Then I forgot about it. I do that a lot! LOL

With the low price guarantee, I really can't think of a good reason why they shouldn't pay us for them. And like the other person posted, then we are not really penalizing the people that DO take our bids. Instead, the people that Don't contract with us will be paying for them instead. Sure sounds like win-win-win to me. And whenever I hear that, I try to jump on it!

Later,
Paul