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Another Charging For Estimates Thread

 
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Old 01-09-2011, 10:02 AM   #1
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Another Charging For Estimates Thread


I have read with interest the posts on the reasons for charging for estimates and have learned and implemented some of the ideas.

I always charge a fee for any estimate or quote that is requested in reponse to a real estate inspection report.

Any potential new customer that will require electrical design/load calcs prior to being able to price the job. As I have learned on here, I will estimate free, but if they want a firm quote, pony up my fee for design first.

Here is my question to the GC's on here - You are asked to submit a quote to build/remodel. You explain to client your time is valuable and that you require a fee for the bid. Collect your money then you contact your subs for a bid for their portion of the work. Are you willing to pay them for their time? If they told you they needed a fee would you look for another sub?

Question to subs - Have you tried to or currently charge GC's for bids when design work is required?

TIA for responses.
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Old 01-09-2011, 10:24 AM   #2
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Re: Another Charging For Estimates Thread


Quote:
Originally Posted by TxElectrician View Post
I have read with interest the posts on the reasons for charging for estimates and have learned and implemented some of the ideas.

I always charge a fee for any estimate or quote that is requested in reponse to a real estate inspection report.

Any potential new customer that will require electrical design/load calcs prior to being able to price the job. As I have learned on here, I will estimate free, but if they want a firm quote, pony up my fee for design first.

Here is my question to the GC's on here - You are asked to submit a quote to build/remodel. You explain to client your time is valuable and that you require a fee for the bid. Collect your money then you contact your subs for a bid for their portion of the work. Are you willing to pay them for their time? If they told you they needed a fee would you look for another sub?

Question to subs - Have you tried to or currently charge GC's for bids when design work is required?

TIA for responses.
Good question. Never heard that one before. The GC is doing alot more work to get the job compared to a sub giving an estimate. GC calls me in as a framer to quote framing, I don't have to meet with every single sub to get estimates from. There is a lot more time involved for the GC to estimate the job compared to me just giving him a framing estimate. Some GC's I know don't even call in any subs because they just know the numbers and estimate the job.

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Old 01-09-2011, 10:27 AM   #3
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Re: Another Charging For Estimates Thread


I agree with your fees for design/inspection related work. If you can recover costs for an estimate or proposal under that umbella than all the power to you.

As a GC, If a sub charged me for a estimate that would be the last time I called em. Estimating is a cost of doing business, or overhead if you will.
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Old 01-09-2011, 01:05 PM   #4
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Re: Another Charging For Estimates Thread


Will not pay a sub for quote As a GC I should be veiwed as a repeat source of income - not a one timer or tire kicker. We also don't take competitive bids. If I get the job, so do my trades.
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Old 01-09-2011, 02:00 PM   #5
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Re: Another Charging For Estimates Thread


I have spent as much as two days on one bid with drawings and such. As a subcontractor I have never charged for my time but I would only spend that kind of time for a GC I had a relationship with that I knew the job was mine.
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Old 01-15-2011, 12:24 AM   #6
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Re: Another Charging For Estimates Thread


Do any of you guys ask the homeowner How many bids they will be gathering before making a decision?
I sometimes feel people take advantage on companies offering "free estimates".

Things have been so tight lately, I need to spend more time with my bags on. I have def lost out on some smaller jobs because I had too much on my plate.
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Old 01-15-2011, 12:34 AM   #7
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Re: Another Charging For Estimates Thread


I only charge realators for bids & that fee is waved with a signed contract. It has ben my experience that they are only concerned with using contractors to help make a sale well I want a piece of the pie to.
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Old 01-15-2011, 07:55 AM   #8
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Re: Another Charging For Estimates Thread


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Originally Posted by kcremodeling View Post
Do any of you guys ask the homeowner How many bids they will be gathering before making a decision?
I sometimes feel people take advantage on companies offering "free estimates".
Had a caller tell me on the initial phone call that she was "calling everyone in the book".

My next words were. "Well then you are going to waste a lot of peoples time. And you will not waste anymore of mine. Good bye" Click!!

Some people just don't get it...............

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Old 01-15-2011, 09:09 AM   #9
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Re: Another Charging For Estimates Thread


I rarely have to call my subs out to help me with bids.. I usually prepare my estimate and call them out to review the site after the contract was closed..

IF there was a situation that required me to call a sub out to the site before hand so I could complete my estimate, I would not have a problem compensating them for their time..

Yes I have paid a sub for his time or estimate before.
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Old 01-15-2011, 11:51 AM   #10
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Re: Another Charging For Estimates Thread


A guy in town that does basement finishing will not give an exact price. Instead he will go out to meet the homeowner and give them a rough sf price. I always give them an exact price and then end up eating all the extras that they added along the way. If you could afford to lose a few bids, this would not be a bad approach.
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Old 01-15-2011, 12:17 PM   #11
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Re: Another Charging For Estimates Thread


Quote:
Originally Posted by kcremodeling View Post
A guy in town that does basement finishing will not give an exact price. Instead he will go out to meet the homeowner and give them a rough sf price. I always give them an exact price and then end up eating all the extras that they added along the way. If you could afford to lose a few bids, this would not be a bad approach.
I give an exact price on my contracts with a change order clause if the home owner wants something thats not in our contract they have already agreed to pay for it. This works really well for me & when they do add things I write a change order and bill them for the work separately.this way the H/O nows what the change is going to cost before its too late. Its a little more paper work for me but its better than loosing money on the little changes & if your doing them for free the H/O keeps thinking of new ones.
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Old 01-15-2011, 12:37 PM   #12
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Re: Another Charging For Estimates Thread


Quote:
Originally Posted by kcremodeling View Post
A guy in town that does basement finishing will not give an exact price. Instead he will go out to meet the homeowner and give them a rough sf price. I always give them an exact price and then end up eating all the extras that they added along the way. If you could afford to lose a few bids, this would not be a bad approach.
Why would you or do you eat the extras along the way?
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Old 01-15-2011, 01:26 PM   #13
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Re: Another Charging For Estimates Thread


Quote:
Originally Posted by TxElectrician View Post
Are you willing to pay them for their time? If they told you they needed a fee would you look for another sub?

.
Never in a million years would I pay a sub for their time to estimate a job.

If they asked, yes, I would find another sub.

Yes, I charge for estimates and Design/pre-construction.

Why the hypocricy? Because I know what I'm doing, and everything I do along way is done to PROTECT the sub.

A) Before I have a signed commitment and a deposit the client gets nothing but rough numbers. That's my numbers, subs, materials and supplies.

Ergo...the sub is not involved yet at this point. If he is, it's just a phone call to confirm my suspicion on a rough number.

B) Client hires me, pays a deposit to begin design or pre-construction. Whether they have full plans yet or not is irrelevant...everything goes through pre-construction. This is where we firm up all the numbers. This is where I will call the subs. On small jobs, all you have to do as a sub is meet me at the house, we go over the plans, you inspect the site and the next time I see you I want your firm price, we sign the contract and you get your deposit (if necessary). On small jobs I'll only call one guy for each trade. If I call you...you know you already got the job. Just give me a number (unless you're trying to gouge me)...and that number is sold.

On big jobs, I am at the mercy of procedures and we have to proceed text-book. Which probably means I need 3 quotes for each job. That's because of the nature of my contract with the client, as it's usually a PM or cost-plus contract. I'll only contact 3 subs...I'll give you the plans and scope of work, next time I hear from you I want a written proposal for the work along with insurance, wsib clearance and license info. If you don't get this one, you're on the list of 3 for the next one and the one after that, so on.

Benefits to you:
-You have a 33% chance of getting this one, or any one. If we do 3 bids and you don't get any of them then you and I will sit down to discuss it. Why didn't you get the job? Let's go over you numbers, etc.
-You know I already signed the job and it's sitting there waiting for you to win it. There's no smoke and mirrors. The job is sold. One of you will get it.
-If you do get it, you know a few things: You're always getting paid on time when I run a job, the site will always be ready for you, I always have your back.

What I HATE, are GC's that call in subs on EVERYTHING, before they have ANY commitment from the client. They keep a revolving door of subs, wasting their time just so they can come up with some bs. proposal. These contractors don't know what they are doing, are abusing the subs, misleading them, they don't have their regular subs, and are like parasites that don't have their chit together.
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Old 01-15-2011, 05:30 PM   #14
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Re: Another Charging For Estimates Thread


Quote:
Originally Posted by SAW.co View Post
I give an exact price on my contracts with a change order clause if the home owner wants something thats not in our contract they have already agreed to pay for it. This works really well for me & when they do add things I write a change order and bill them for the work separately.this way the H/O nows what the change is going to cost before its too late. Its a little more paper work for me but its better than loosing money on the little changes & if your doing them for free the H/O keeps thinking of new ones.
I just need to do a better job of staying on top of the extras. The larger the project, the more difficult. Design changes along the way can really make pricing complicated. Lots of paperwork to keep up with for somebody who carries the lead carpenter role. If they have unexpected expenses, all the sudden i'm the bad guy. I just have to learn to be okay with that.

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Old 01-15-2011, 05:37 PM   #15
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Re: Another Charging For Estimates Thread


Are you asking for a design? When I think design I am thinking intellectual property. As a GC I usually buy this from a designer and provide it to my subs.

I have never done a large commercial job, but I would expect some costs associated with this.

I too echo the sentiment that I have relationships with specific trades. When I get something that needs their trade I call them. I'm not on the phone to every electrical contractor in the phone book. I use one guy. If his crews are busy I will get someone else, but it is always a second choice for me. We know each others rates and billing philosophy If one of these guys told me that they were charging for bids to me...... I wouldn't be receptive.

REALTORS: I have a couple that I trust will call me only if there really is work. I will give an estimate to the realtor for seller once for free if they are referred by one of the ones I trust. I quit giving estimates to buyers under any circumstances as I have NEVER gotten a job from one of these.
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Old 01-20-2011, 11:28 AM   #16
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Re: Another Charging For Estimates Thread


Quote:
Originally Posted by TxElectrician
I have read with interest the posts on the reasons for charging for estimates and have learned and implemented some of the ideas.

I always charge a fee for any estimate or quote that is requested in reponse to a real estate inspection report.

Any potential new customer that will require electrical design/load calcs prior to being able to price the job. As I have learned on here, I will estimate free, but if they want a firm quote, pony up my fee for design first.

Here is my question to the GC's on here - You are asked to submit a quote to build/remodel. You explain to client your time is valuable and that you require a fee for the bid. Collect your money then you contact your subs for a bid for their portion of the work. Are you willing to pay them for their time? If they told you they needed a fee would you look for another sub?

Question to subs - Have you tried to or currently charge GC's for bids when design work is required?

TIA for responses.
Crazy world isn't it. UK was 5 years behind USA who started quoting for free, now no main contractor or subcontractor in the UK would consider charging for any quotes even for contracts worth millions£, and USA is charging again, ah well let's hope history repeats itself, I'll be a happy man in five years time!!!
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Old 01-20-2011, 01:05 PM   #17
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Re: Another Charging For Estimates Thread


Okay. So I'm going to start charging for estimates. I'm sure I will still do some free estimates on larger projects in nicer areas. I am going to be more selective about who gets a free estimate. Bathroom remodeling bids have always had a very low conversion rate for me. How much is fair? I would be happy with $35 just to cover my gas.

Plus I need to make sure I don't have anything posted on my website or around the web that says "free estimates"
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Old 01-20-2011, 08:17 PM   #18
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Re: Another Charging For Estimates Thread


two entirely different services.

A customer calls on the phone. Do you want a free estimate or do you want me to design your project, because if you want me to create the design we need to charge to cover the time and labor. I think this is a nice way to explain to the customer so they don't get upset and they understand that they should pay for your service. We always want to advertise that we give free estimates because people will call you much less without free estimates. At least, with the free estimate you have a shot at getting more work. Estimates are free and design is not. It is not that hard to make the customer understand.

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Old 02-21-2011, 09:33 PM   #19
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Re: Another Charging For Estimates Thread


I was going to start a new thread, but found this one and thought I would bring it back.

What do you guys think of adding an estimate charge only for jobs that are accepted?

What I mean by that is, going out and pricing a regular sized job (a few days at most for me) requires time and fuel on my dime for a free estimate. Is there anything wrong with tacking on an hour or two for estimate time to the pricing?

If you get the job great, you just made your time back. But if not, you eat those hours half the time.

I understand that charging up front for an estimate is more likely to get you serious customers, but it seems it would also drive away those people with potential one day, or slow day jobs for a few hundred bucks.
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Old 02-21-2011, 09:55 PM   #20
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Re: Another Charging For Estimates Thread


Here's my deal: Pricing is free. If you want a detailed report on measurements, how I got them, and exactly what I'll do, that'll cost extra. I used to give clients exact measurements on my free estimates until I realized how many people used me for free window measuring services. That being said, in this industry and this market, I cannot charge for my initial appt. I don't have any problem for others that do nationwide, I just cant do it.

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