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Charging For Estimates

 
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Old 11-12-2014, 07:15 AM   #21
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Re: Charging For Estimates


Log home maybe in a different category with his speciality.. It seems a bid on his end is very time intensive and since he does very specialized restoration he probably has some leeway that someone pricing a two room paint job for less than 1k doesn't have. His sounds more like an inspection fee. My husband is working on getting into a home inspection course now so he can add that to his business and a home inspection would be about 500 or more then he would also be able to offer services for repairs if needed but that would not be counted as a bid.
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Old 11-12-2014, 05:09 PM   #22
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Re: Charging For Estimates


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Log home maybe in a different category with his speciality.. It seems a bid on his end is very time intensive and since he does very specialized restoration he probably has some leeway that someone pricing a two room paint job for less than 1k doesn't have. His sounds more like an inspection fee. My husband is working on getting into a home inspection course now so he can add that to his business and a home inspection would be about 500 or more then he would also be able to offer services for repairs if needed but that would not be counted as a bid.
Where in the world do you charge 500$ for a home inspection?
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Old 11-12-2014, 05:39 PM   #23
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Re: Charging For Estimates


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I appreciate all the feedback it defiantly gives us some thought in both directions.. My husband is a liscensed handyman so he can't do any jobs over 10 k with out getting a general contractors liscense with the state which is going to take him some time and school while working to pay bills. So when I say a big job that is about 3-6 k his average job is about 500 or so. I like the idea of a questionnaire before bidding any job and maybe giving a ballpark "unofficial bid" before driving to look at a job and a customer thinking that they are going to get a bathroom remodel for $400. And we were considering charging like 20-25 a bid not hundreds. So if he spends half his day driving to 3 bids he would at least cover his gas for the day. We are new to this he just got out of the army and worked with another guy for a yr before branching out on his own back in January so any ideas and guidance that you did not figure out right away would be great
Even a small charge will weed out almost all of the tire kickers and time wasters. The ones who accept it will be far more likely to commit to the project and to you.
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Old 11-12-2014, 06:34 PM   #24
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Re: Charging For Estimates


I really like the idea.
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Old 11-12-2014, 07:29 PM   #25
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Re: Charging For Estimates


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If you are offering to work for free then it's not work, it's volunteering. You would be volunteering for a week for free not working at your new company. No real company would have you work for free because you could come at them in the future through that State's Dept. of Labor and Employment and sue for unpaid hours of work. The biggest mistake that new companies make is not paying employees for work and getting sued in the future. If you offered to work for me for free I would think you're crazy and a danger to my business and I'd tell you to beat it. Read the thread I started yesterday here:
http://www.contractortalk.com/f16/ch...2014-a-154518/
Your way doesn't mean the only way. To me if you have to charge for an estimate every time it simply means you haven't a clue how to qualify your leads with a simple conversation over the phone.

There is also a thing called overhead. If you know how to run your business, with true costs calculated, you can easily determine the amount of time and money you spend giving "free" estimates and add that into your overhead.

I am with John on this one. I will go to any lead, that I have qualified, and give them an estimate (budget range) for the project for "free". If they want designs, detailed plans, detailed quote/bid...they get the privilege of paying me for that. I will also offer to credit that back to the contract if they chose to use us. It's simply them paying for a service in advance of the entire project.
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You ask for your money frequently, and you collect it quickly, else you stop working immediately.
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Old 11-12-2014, 07:33 PM   #26
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Re: Charging For Estimates


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Where in the world do you charge 500$ for a home inspection?
Here.
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You ask for your money frequently, and you collect it quickly, else you stop working immediately.
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Old 11-15-2014, 10:20 AM   #27
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Re: Charging For Estimates


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Even a small charge will weed out almost all of the tire kickers and time wasters. The ones who accept it will be far more likely to commit to the project and to you.
Agreed, I charge $75 for a site visit. It cuts down on the time wasters immensely.

The goal is not to make money off the site visit fee, it's to help insure that the people I do visit aren't wasting my time.

My time is my most valuable commodity, and I'll do whatever I can not to give it away to someone.
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Old 11-15-2014, 06:59 PM   #28
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Re: Charging For Estimates


Psychologically, there may actually be another advantage to charging a fee for estimates. In theory, once your customer pays for your estimate, that expense becomes a sunk cost and should no lover factor into their decision making process. In reality, that's not quite how people work.

By paying for an estimate, your customer becomes invested in you. In their mind, if they don't buy from you, that fee they paid for the estimate is wasted. But if they do buy from you, they can justify it to themselves as just part of the sale. This could lead to your customers favouring your bid over those of other contractors.

I'm not sure how often this is used in the construction industry, but in other businesses, these principles (loss aversion, escalation of commitment, sunk cost fallacy) are common marketing techniques that have generated billions of dollars.

And if what you're selling truly great work for a price that isn't outrageous, I don't think it's unethical at all.
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Old 11-15-2014, 07:11 PM   #29
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Re: Charging For Estimates


For those that are charging residential clients, how would you propose charging for a commercial bid or government work? Let's test the logic.
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You ask for your money frequently, and you collect it quickly, else you stop working immediately.
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Old 11-15-2014, 07:40 PM   #30
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Re: Charging For Estimates


I charge for any estimate that is more than 45 minutes to an hour away from my shop. I charge $65 and people usually don't have a problem with it. Also after any major storm I charge for all estimates because most people want the highest estimate to get more money from the insurance company. Than they will hire the cheapest contractor and pocket the rest of the money.
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Old 11-15-2014, 07:42 PM   #31
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Re: Charging For Estimates


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I charge for any estimate that is more than 45 minutes to an hour away from my shop. I charge $65 and people usually don't have a problem with it. Also after any major storm I charge for all estimates because most people want the highest estimate to get more money from the insurance company. Than they will hire the cheapest contractor and pocket the rest of the money.
Do you do commercial?
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You ask for your money frequently, and you collect it quickly, else you stop working immediately.
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Old 11-15-2014, 07:56 PM   #32
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Re: Charging For Estimates


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For those that are charging residential clients, how would you propose charging for a commercial bid or government work? Let's test the logic.
I dont charge to bid commercial TIs. I do and have charged to write a scope of work for them so I can bid it.

My two main commercial/industrial clients have an inhouse person ( like an owners rep) who writes a scope and gives us plans to bid. No charge there.

I wouldnt charge a residential client either, if they had those things. Never had one with a solid scope of work though.
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Old 11-15-2014, 08:08 PM   #33
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Re: Charging For Estimates


I get a lot of calls from people that are buying a house and want me to give them numbers on small to large remodels. We don't charge for estimates, but if you don't own the house its $450. Got burned to many times by people just wanting estimated to drive down the sale price on the house
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Old 11-15-2014, 09:39 PM   #34
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Re: Charging For Estimates


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I dont charge to bid commercial TIs. I do and have charged to write a scope of work for them so I can bid it.

My two main commercial/industrial clients have an inhouse person ( like an owners rep) who writes a scope and gives us plans to bid. No charge there.

I wouldnt charge a residential client either, if they had those things. Never had one with a solid scope of work though.
My point was to the ones that charge for estimates. Trying to see if they charge to bid commercial projects.
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You ask for your money frequently, and you collect it quickly, else you stop working immediately.
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Old 11-15-2014, 11:34 PM   #35
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Re: Charging For Estimates


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I get a lot of calls from people that are buying a house and want me to give them numbers on small to large remodels. We don't charge for estimates, but if you don't own the house its $450. Got burned to many times by people just wanting estimated to drive down the sale price on the house
I'm with you on that one!

I don't do a lot of qualifying on the phone because I have a lot of problems with customers complaining that I am probing them. Then, I spend a few hours diagnosing problems, writing estimates and find that they are only prospective home buyers.

I try to get enough to cover a little gas and an hour of labor.
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Old 11-15-2014, 11:49 PM   #36
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Re: Charging For Estimates


Sorry, this was supposed to be a new thread!

Last edited by pcplumber; 11-15-2014 at 11:54 PM.
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Old 11-16-2014, 11:38 AM   #37
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Re: Charging For Estimates


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I'm with you on that one!

I don't do a lot of qualifying on the phone because I have a lot of problems with customers complaining that I am probing them. Then, I spend a few hours diagnosing problems, writing estimates and find that they are only prospective home buyers.

I try to get enough to cover a little gas and an hour of labor.
It's not that you are asking questions, it's the questions you ask and how you ask them.
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You ask for your money frequently, and you collect it quickly, else you stop working immediately.
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Old 11-16-2014, 04:12 PM   #38
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Re: Charging For Estimates


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Do you do commercial?
Yes I do commercial. But only in my local area.
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Old 11-16-2014, 05:08 PM   #39
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Re: Charging For Estimates


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Yes I do commercial. But only in my local area.
How much do you charge them for an estimate?
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Old 11-16-2014, 05:13 PM   #40
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Re: Charging For Estimates


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How much do you charge them for an estimate?
$125.00 for commercial. Also I charged investors who want prices and rehabilitation projects. That weeds them out real quick because they always looking for the cheapest price.

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