Update To Charging For Estimates

Mike Finley

It's been about 10 days

fez-head

SuperiorBuilt

That's great your close ratio has gone up. Curious how much have you saved on fuel since you started? What are you doing with any of the extra time you might have from the price collecting HO?

Celtic

Have you perfected your explanation?

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Cole

Exactly my question, do tell!

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ruskent

Could you please recite the scrip you read when customers call regarding the estimate fee.

Mike Finley

There is no script

concretemasonry

Mike -

It appears that due to reputation and image creation, you have put yourself in the good position of using that to qualify clients and not waste time on shoppers. - Great job!!!

Nobody will ever really make money by charging for estimates and the cost savings of fuel in miniscule. Your time and pricing it the key. If someone quibbles about the price, they probably will be difficult to deal with and treat the shopping process and a win or lose at all costs

What you have done is improve your image and put yourself in a position to chose how much and what kind of work you do. This allows you to determine how, when and if you should expand if the market will accept it.

You have created a situation where you and the client are now working together to get what is needed. As long as you are striaght with the customer and perform you will have guaranteed referals since the customer is a part of the process.

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Dick

Engineer, designer and consultant recently active domestically and internationally on construction and design in about 35 countries.

SuperiorBuilt

Hey Mike,
Curious do you give them the estimate on the spot or do you e-mail them the estimate within a day or two?
I am serious considering changing to an estimate fee myself. I am getting tired of the tire kickers and price shoppers who hand my estimate to the next guy.
Thanks
Steve

fez-head

Here is the jist of what we say after receiving all of the information from them - there is no canned dialog so to speak:

I casually let them know that we have a $35 service fee that is due upon the initial consultation and that fee defers some of the direct cost involved in providing them with a consultation and upfront cost for their projects.

If they tell me that no one else is charging a service fee I politely respond that in order fulfill our family and social obligations we can only work 8 hours a day like everyone else. By the end of the week all that time not working during the 8 hour periods really ads up.

Also 99% of the time we will only provide consultations between the hours of 8am -3pm. IMHO our time off work is just as valuable as our time working.

Jesse

LeonApel

Good job, this is actually a really good idea. It prevents people from price shopping and you spend your time on clients who are serious.

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ApgarNJ

I've always wondered if I should start charging for certain estimates. say i have an addition or renovation project that will take many hours, site visits and meetings for a customer that may or may not hire me, what should i charge for that, over someone who just wants a much smaller bathroom remodel. i know that mike only really does bathroom remodels and so 49 dollars seems ok to pay. but some of these larger jobs, i may have 8 hours or more of just figuring and doing the actual printed estimate in the office, money for fuel for at least one, but sometimes multiple meetings with homeowner or architect for the job. because of the way i am referred i normally just pad the estimate with enough money to pay myself for doing the estimate. the problem with that is if you don't get the job. most of my jobs I get because they are personal recommendations and i'm not really bidding against a lot of other people. if it's a totally new customer, i'm not really sure what to charge for an estimate. what are you guys who do additions and renovations charging(if any) for these detailed estimates where it's more than just giving them a sq ft price. most of my estimates can be several pages or more in length and take quite a lot of time to figure.
i am thinking of something like say for a 200k addition, the estimate price should be 200 bucks or something like that. anyone think that is crazy? please remember i'm in NJ and the cost of living here is high, so take that into account if you are in a totally different pricing area than me.

Cole

I don't think that is crazy of a price at all.

If someone is going to add on a $200k addition to there house, $250-$1000 for an estimate is nothing.

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Tiger

Not really my line, but I'd consider it a non-issue on a $200k job. It's more important to me because it's a 2 hour travel, conversation, and bid on a 2-8 hour job. As an example for you, if you want $1,000 for your time & trouble and you land 1 in 4 of these, you add $4,000 to the one you get.

Dave

silvertree

Sounds very positive to me. As I said in a previous post on charging, those that are willing to pay take us more seriously. I have started to tell people I will give them a ballpark on the first visit for larger jobs that would need drawings. To get a bid from me I need to get 4% of that ballpark price to do drawings and a scope of work. To date I have asked this of 2 people and both said yes. It goes into the final price. 2 out of 2 is a good way to start, but I don't expect that to happen all the time. For smaller jobs it's $35 and I tell them it's the fairest price I could come up with for covering my travel expenses. $49 sounds better and I think I will copy that. I know this won't work in every market, but here in Minneapolis nobody but the price shoppers have a problem with it. Home Depot charges for home visit estimates in this area, I heard they charge $50.

Mike Finley

[quote=ApgarNJ;324946]I've always wondered

silvertree

Yes Mike, I agree with all you said. Lots of different fees, but it makes sense to me. In a less sophisticated way I am doing something similar. For now I charge what I think I can get. This is not a profit center for me, but I have read where it is for some contractors.There is some resistance to this from HO's, but the more of us that do it the better. Eventually free estimates will come to stand for less professional or more high pressure sales. Todays consumers tend to prefer consultive sales and everyone knows consultants get paid for their area of expertise. I don't miss the old days of homeowners telling us to sharpen our pencils.

Floordude

What ever you can get for doing an estimate, be it $5 or $1000, it is much better then doing it for free, like you are now.

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ApgarNJ

i was just always thinking that i'd start losing work if i started charging for estimates. i just don't think the average homeowner knows how much time we spend to give htem an estimate only to pick the lowest guy or just say, oh, well. we can't afford that, so thank you for coming out. i know it's part of the job, but if i know i have job even before i am estimating it, i always put in for my time, fuel etc for doing the estimate.

mahlere

so at this point in your business career, you punish the people who buy from you?

if you charged $50 for an estimate, the only people who you will lose (for the most part) are people who would probably waste your time and not hire you anyway...you are just saving the headache....