When and how do you get information on customer's budget? - Contractor Talk - Professional Construction and Remodeling Forum

Mike(VA) · 07-15-2009, 07:54 AM

Some people are afraid to ask what their customer's budget is and some ask too late. When do you ask and how do you ask? It is definitely more critical to ascertain a customer's budget early on for larger jobs, but do you ask for every job?

The way I do it is this: as soon as I find out the basic scope of the project at the first lead call, I suggest a meeting to go over their project ideas, look at the property, and discuss their budget constraints. At the meeting, I do address budget, but not until close to the end of the meeting. I just ask if they have a budget in mind for this project and I also ask what they based this number on. Too many times I hear that their budget number is based on what Joe down the street paid for a similar project 3 years ago, that's what they have in equity in their house, or they saw a project like their's on HGTV and it said the job only cost 'this' much.

Problem is when you get customers who will not tell you either because they are afraid of you taking advantage of them or they just plain have no clue how much a job might cost. What do you do with these people?

J F · 07-15-2009, 08:07 AM

During the first phone call at some point I would let them know part of the first meeting will be discussing budget. If someone won't discuss budget after meeting with you and discussing your qualifications etc (and seeing projects you've done similar to their's with some #'s for those projects)....probably not going to be a client of yours.

Mike Finley · 07-15-2009, 09:11 AM

Quote:

Originally Posted by Mike(VA)

Problem is when you get customers who will not tell you either because they are afraid of you taking advantage of them or they just plain have no clue how much a job might cost. What do you do with these people?

Ignore it, and repeat the question.

That isn't why you are asking so why would you validate it?

Repeat the question over and over again until the tell you.

BreyerConstruct · 07-15-2009, 10:36 AM

I've gotten a lot bolder about asking budget this year.
Last night they said they have no idea, but knew it would cost more than a few grand, but didn't want/need a 25k deck (even though that was closer to what they were talking about!).

So I said "Ok, so somewhere between 2k and 25k? I can work with that." They laughed, and we moved on to product selections.
I'll show them a few size and design options in the 6-15k range, and scale up or down from there based on their input.

Oh, and the 6k option might be "frame only".

~Matt

rbsremodeling · 07-15-2009, 10:45 AM

Charge for an estimate and design service like Mike has preached and I don't care what the budget is.

Mike(VA) · 07-15-2009, 10:58 AM

Sure, I could get some green folding money for the estimate, but it doesn't fully cover the cost. I want them to sign because the fit is right and I have designed a project that will work and is in their budget range. They don't tell me that all they have is $25K for a basement and I take their info and design one that costs $95K, there's a disconnect there big time. No way to salvage that one. Why waste the time?

rbsremodeling · 07-15-2009, 11:01 AM

50-75 bucks and I give them a ball park/reality check. After the get up of the fllor they give me a real budget.

Then the design and construction is based on reality. Detailed estimate and scope of work and specs $500 and up

Mike(VA) · 07-15-2009, 11:05 AM

Well, that's what I am asking for is how do people get the numbers. Thanks.

J F · 07-15-2009, 11:14 AM

Ask....if they won't tell after doing all in the above posts (and won't pay your for design/estimating)...walk. You can't be afraid to walk.

Mike Finley · 07-15-2009, 04:27 PM

Quote:

Originally Posted by Mike(VA)

Well, that's what I am asking for is how do people get the numbers. Thanks.

Ask them again. How hard is that? What are you scared of? I haven't ran into a customer yet who ever punched me in the face for asking them a question.

You ask them and anything they tell you other than their budget, just ask them again. You think that is hard or something?

So have you ever hired a professional remodeling company before?

No, we never have, you are the first person we have ever talked to ever.

Great, so you're in for a real treat. Now what type of budget have you guys considered for this project?

We have no idea, that's why we called you. We have never done this before and have no idea at all, not an inkling, not even a guess on where to start.

Great, you, what type of budget have you guys considered for this project?

Well, we were hoping to be around $10,000.00.

Great. Most of the projects like this that we do usually are in the range of $15,000-$25,000.00

Oh my! We had no idea.

No problem. $10,000 is certainly on the lower end of the scale. Should we see where we can cut corners as much as possible to see how close we can get to that number or is there some flexibility if it made sense.

Well, LOL, we were hoping to be around $10,000, but I told my husband he's a total idiot, tight wad and I'm spending whatever it takes.

Great!

silvertree · 07-15-2009, 04:34 PM

I feel strongly that asking for a budget is the smart and honest thing to do.

Now, I was at a remodeling site this week that had 10 things you never tell a contractor.
Like

1. How many bids you getting?
2. Have you talked to anyone else?
3. What is your budget? They went on to say if you give a budget then "we" know how much to charge you. Stupid-stupid-stupid!

Darwin · 07-15-2009, 04:37 PM

Mike Finley. This is where you shine at. Keep it coming, we're listenin'

.

rbsremodeling · 07-15-2009, 05:04 PM

What good does asking for a budget and they have no clue what it cost?

If they don't have any idea, what are they going to say?

I tell them what it will cost not the other way around unless they are seasoned consumers.

How much is you budget hmmm 10k well its 15K and up.

Well you asked us what our budget was.

I did 2 estimates this week they both had bank write ups that were off by 80-100K so their budgets were still off.

They need my price not an assumption or someone else's price.

So what does asking their budget do if they have no clue about your price?

silvertree · 07-15-2009, 05:09 PM

Rory, I disagree and will tell you why when I get back.

rbsremodeling · 07-15-2009, 05:11 PM

Quote:

Originally Posted by silvertree

Rory, I disagree and will tell you why when I get back.

Just opened another beer I be waiting.

Mike Finley · 07-15-2009, 05:18 PM

Quote:

Originally Posted by rbsremodeling

So what does asking their budget do if they have no clue about your price?

In a 12x12 room I can design a $10,000 bathroom or a $100,000 bathrooom.

BobsLandscaping · 07-15-2009, 05:21 PM

I find out when I run their credit how much I can finance them for. If it's a cash customer I ask. It's useless to do a landscape design they love, but can't afford.

rbsremodeling · 07-15-2009, 05:26 PM

Quote:

Originally Posted by Mike Finley

In a 12x12 room I can design a $10,000 bathroom or a $100,000 bathrooom.

Exactly my point so until they give me a scope of work and I price it, their budget is mute.

Budgets are a guideline yes but I exceed budgets daily. Budgets sets limits in their minds I am going to spend 3ok on a bath.

Yeah ok that Sounds good till I get you in the showroom and show you the Toto Neorest 5000

**Ed the Roofer** · 07-15-2009, 05:29 PM

Rory does bring up a good point though, for arguements sake, or at least to open the discussion further with the home owner.

How many people here have read about some public project that had a pre-determined budget created from the architect, engineer, or some other entity?

Then, when the open bidding was disclosed, not even the lowest "Bidder" was at or under the designated budget.

I am sure that most home owners have read about a local community project that had to be brought back to be redesigned to get to the budget amount designated, even if the firm creating the budget charges 25% of the amount of the entire contracted work amount.

So, getting "Their" budget at least opens up the wiggle room for discussion to get to the true final number, which is the contractors costs.

Use that opening to create a dialogue so that they drop down their guard and open up a bit. At least now you are making headway.

I'm going to try that tonight with my upcoming appointment to see how it goes over.

Ed

rbsremodeling · 07-15-2009, 05:33 PM

I have found that asking for budget puts most customers on their guard. Very few people can ask tactfully and correctly and get the true numbers.

They will never give you their actual numbers anyone. Take their spoken budget and at 30%

Let them drive the price and keep them informed and educated through out the process.