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Old 02-04-2012, 10:47 PM   #1
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Charging For Quotes..... An In Depth Discussion.


My intention for this thread is not to debate whether or not you should charge for quoting a job…..But rather an open discussion for those that already charge.

I had decided last year that we needed to start charging for quotes but waited till the beginning of the year to change our policy. After looking through the stack of quotes for jobs we did not get for 2010 and adding up the man hours and overhead involved I DID NOT like the number I came up with.

We changed our policy as of Jan 1st of this year and started charging for all quotes. The minimum charge is $70. The charges get higher if it is a larger project that involves a lot of planning. (Example: Quoting the installation of 10 windows would be a minimum charge. But quoting a deck when the customer has not planned the deck or decided on the type of decking, well that quote would be higher). If the customer awards the project to us, then the quote charge shows as a credit towards project payments.

There are some exceptions…..
Previous client – No charge
Direct referral from previous client – No charge

I can honestly say that I was worried about how this would affect business. But after 1 month I have been very pleased so far. January is our slowest month of the year so the phone doesn’t ring much when we see temperatures like -50 below zero. Out of 24 calls I only had 3 that didn’t want to pay the fee. I view that as saving a minimum of 3-6 hours of lost time and the additional cost involved.

The way I see it, there are certain “types” of customers that won’t want to pay…… Here are a few.....
The “I am curious about how much it will cost but I don’t have any money customer”.
The “I don’t appreciate your time or your efforts customer”.
The “I am looking for the cheapest contractor customer”.

We all know there are several other types as well. The point is that these are the kind of customers that we do not want. So if you can omit the majority of these customers by charging for quotes, I feel like it is a nice added bonus.

I would really like to see more companies jump on board with charging for your time. When you are supplying the time and cost involved,… There is no such thing as a FREE Estimate. Estimates cost YOU MONEY!

I would like to hear what others that are currently charging or thinking about charging thoughts are…… Please feel free to chime in!
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Old 02-04-2012, 10:53 PM   #2
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Re: Charging For Quotes..... An In Depth Discussion.


I still dont charge for estimates but I wish I did. Everyone is different. For me our largest project to date started on the phone with the words "do you offer free estimates?","yes", "oh good when can you come out?"

Every time after that I wish I had charged. I even wrote the policy out how we were going to charge, but every time I go to instate it I think about that one job. Hopefully I get over that soon. I look forward to reading this thread. Nice job op!

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Old 02-04-2012, 10:58 PM   #3
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Re: Charging For Quotes..... An In Depth Discussion.


Hmm. Interesting. As a customer, I wouldn't pay for any kind of estimate. However, as a customer, I fall into a 4th category you didn't list...I'm just a general pain in the ass.

But really, charging seems like a good idea. But if you were the only one out of your competition that does it, you might end up getting less work overall but you paid yourself for the time you spent writing estimates....

Is the intent to be compensated for all of your preconstruction time? Or is so you don't have to make multiple trips? Maybe a policy could be the first estimate is free....but subsequent revisions come with a price tag. I'd think as long as you were up front about that, they would respect your time in the same fashion they respect their bank account balance.....

My goal is closing on the estimate. After that, I'm happy to provide value engineering options and tweaks to the design based on the hourly rate of my designer. If I feel the client could be a handful on the design end, I will suggest they go and contract with a designer directly and have them act as the owner's representative....After they figure out design and that service could run them 10 grand, my price will look pretty good.

I don't really think I've said anything useful here. Going back to compiling my general conditions estimate template.

Last edited by rdr8887; 02-04-2012 at 11:02 PM.
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Old 02-04-2012, 11:00 PM   #4
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Re: Charging For Quotes..... An In Depth Discussion.


I don't presently charge for quotes. Almost all my work is referral, and am rarely bidding against anyone.

But I really like the whole idea about " I am a quality contractor who doesn't wish to waste his time on go nowhere quotes "

Tells people that you're not going to be the cheapest guy out there. This must weed out a lot of the bargain hunters.

I should add that if I'm asked to work up a price for a project, I'm on the clock. So I guess in reality I do charge for quotes.

Last edited by katoman; 02-04-2012 at 11:02 PM.
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Old 02-04-2012, 11:06 PM   #5
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Re: Charging For Quotes..... An In Depth Discussion.


Ohio, you still charge for it, it just comes out of your profit.

Estimates are FREE. I will go to your house and give you a range based on our first visit.

I also explain during that first visit, that if the range is within budget we can sign an contract of intent that states they are hiring me to design and quote out their project. It is then that I also ensure them that the design fee will be deducted from their final contract price if they decide to hire us to complete it. Everyone wins!

I know that it is frowned upon, but I charge $250 for the initial design phase which includes a second visit to the home, a set of drawing and renderings (that are my property until final signing), that helps keep people from stealing the design..at least it deters most, and a categorized pricing list. I don't have the time or money to sue someone for stealing my design.

But I remodel, I am sure that every trade is different.
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Old 02-04-2012, 11:14 PM   #6
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Re: Charging For Quotes..... An In Depth Discussion.


I think it also depends on what you're quoting. If someone wants a price to install a new screen door that's one thing, but it they want an addition built, that's a whole different ball game.

Generaly speaking, I charge for my time. Unless, like I said it's a tiny job.
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Old 02-04-2012, 11:16 PM   #7
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Re: Charging For Quotes..... An In Depth Discussion.


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Originally Posted by TNTSERVICES
Ohio, you still charge for it, it just comes out of your profit.

Estimates are FREE. I will go to your house and give you a range based on our first visit.

I also explain during that first visit, that if the range is within budget we can sign an contract of intent that states they are hiring me to design and quote out their project. It is then that I also ensure them that the design fee will be deducted from their final contract price if they decide to hire us to complete it. Everyone wins!

I know that it is frowned upon, but I charge $250 for the initial design phase which includes a second visit to the home, a set of drawing and renderings (that are my property until final signing), that helps keep people from stealing the design..at least it deters most, and a categorized pricing list. I don't have the time or money to sue someone for stealing my design.

But I remodel, I am sure that every trade is different.
Oh I understand who is paying for it and I understand your approach which I like. I just take a little different approach. I always aim for the one call close. When I show up I have my laptop with me. I shoot the measurements enter them into sketchup, or show them similar projects to theirs, type the contract in my truck, print, knock on the door and close. I have one call closed $50,000 basements in 3 hours. For me I want to leave with a deposit check not $250.
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Old 02-04-2012, 11:18 PM   #8
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Re: Charging For Quotes..... An In Depth Discussion.


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Originally Posted by katoman View Post
I think it also depends on what you're quoting. If someone wants a price to install a new screen door that's one thing, but it they want an addition built, that's a whole different ball game.

Generaly speaking, I charge for my time. Unless, like I said it's a tiny job.
Can't argue with that.
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Old 02-04-2012, 11:20 PM   #9
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Re: Charging For Quotes..... An In Depth Discussion.


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Oh I understand who is paying for it and I understand your approach which I like. I just take a little different approach. I always aim for the one call close. When I show up I have my laptop with me. I shoot the measurements enter them into sketchup, or show them similar projects to theirs, type the contract in my truck, print, knock on the door and close. I have one call closed $50,000 basements in 3 hours. For me I want to leave with a deposit check not $250.
OMG I'm still in the stone age.
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Old 02-04-2012, 11:25 PM   #10
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Re: Charging For Quotes..... An In Depth Discussion.


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Originally Posted by ohiohomedoctor View Post
Oh I understand who is paying for it and I understand your approach which I like. I just take a little different approach. I always aim for the one call close. When I show up I have my laptop with me. I shoot the measurements enter them into sketchup, or show them similar projects to theirs, type the contract in my truck, print, knock on the door and close. I have one call closed $50,000 basements in 3 hours. For me I want to leave with a deposit check not $250.
Kind of reminds me of a guy that tried to sell me new gutter guards. 120lf = $15,000.... I laughed....He wouldn't go away....had contract ready to sign.....kinda wish I would have bought black now.....

What?! I got to keep the model he put in my sink to demonstrate their effectiveness......
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Old 02-04-2012, 11:28 PM   #11
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Re: Charging For Quotes..... An In Depth Discussion.


Quote:
Originally Posted by rdr8887

Kind of reminds me of a guy that tried to sell me new gutter guards. 120lf = $15,000.... I laughed....He wouldn't go away....had contract ready to sign.....kinda wish I would have bought black now.....
The gutter guys ARE crazy! I am selling a high quality product at a value, its the reason I dont have time to screw around. When your the best you have to let people know it, or they dont..
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Old 02-04-2012, 11:29 PM   #12
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Re: Charging For Quotes..... An In Depth Discussion.


For the smaller items.....Like a screen door, we treat that as a service call. Service calls are strictly by the hour and the clock starts when the truck is dispatched and ends when the tech hands you a bill. Anything that can be knocked out in just a couple hours I just treat as a service call.


I appreciate the comments thus far! keep em coming!!
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Old 02-04-2012, 11:29 PM   #13
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Re: Charging For Quotes..... An In Depth Discussion.


Quote:
Originally Posted by rdr8887

Kind of reminds me of a guy that tried to sell me new gutter guards. 120lf = $15,000.... I laughed....He wouldn't go away....had contract ready to sign.....kinda wish I would have bought black now.....

What?! I got to keep the model he put in my sink to demonstrate their effectiveness......
What trade are you in. Seems kind of ho'y to me that you would of even called a gutter guard company you didnt know. I have 2 gutter guys at all times just in case one is drunk when I need him. :
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Old 02-04-2012, 11:29 PM   #14
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Re: Charging For Quotes..... An In Depth Discussion.


I've got to go sell gutter guards.
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Old 02-04-2012, 11:31 PM   #15
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Re: Charging For Quotes..... An In Depth Discussion.


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Oh I understand who is paying for it and I understand your approach which I like. I just take a little different approach. I always aim for the one call close. When I show up I have my laptop with me. I shoot the measurements enter them into sketchup, or show them similar projects to theirs, type the contract in my truck, print, knock on the door and close. I have one call closed $50,000 basements in 3 hours. For me I want to leave with a deposit check not $250.
I cannot imagine closing a kitchen remodel on the first visit. There just are too many decisions that have to be made.

I would rather get $250 than nothing like so many do. The $50,000 basement is an exception, not the rule. If they have a bar in the basement, a granite top can vary by thousands of dollars. I can't even imagine all the options that have to be considered before giving a number on a $50,000 job.
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Old 02-04-2012, 11:32 PM   #16
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Re: Charging For Quotes..... An In Depth Discussion.


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I've got to go sell gutter guards.
I have a buddy that works for leaf filter, they are all over the country. It is a racket for sure. Greasy sales methods, and huge profits...
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Old 02-04-2012, 11:42 PM   #17
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Re: Charging For Quotes..... An In Depth Discussion.


The way I work a kitchen remodel is the customer gets charged $70 for the initial visit/consult and they get 2 hrs of my time to discuss the project. Once I have an idea of what they are trying to accomplish, then I work up a "planning fee". The size and scope of work dictates this charge. Once the kitchen has been planned, I now have something to quote.
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Old 02-04-2012, 11:43 PM   #18
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Re: Charging For Quotes..... An In Depth Discussion.


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Originally Posted by TNTSERVICES

I cannot imagine closing a kitchen remodel on the first visit. There just are too many decisions that have to be made.

I would rather get $250 than nothing like so many do. The $50,000 basement is an exception, not the rule. If they have a bar in the basement, a granite top can vary by thousands of dollars. I can't even imagine all the options that have to be considered before giving a number on a $50,000 job.
I can, and I have an itemized list. We have done so many basement I can bid them in my sleep. I have prices from my suppliers for everything you can imagine in a database. I have several samples of granite along with prices because I know what Im pay a slab and for lineal feet of different edge profiles. Cabinets are easy because the design gives you exactly how much space you will have which is quickly converted into layout then price off of our cabinet price sheets. Carpet is always pretty consistent and I always have samples.

What I have done is analyzed how much it costs us to build a lineal foot of wall, and a square foot of ceiling, and a can light, and a half bathroom, and a lineal foot of cabinets, ect. Once you have trial and errored enough to get your price it is just a matter of keeping the database up to date with pricing, measuring, and selling. I sell alot of jobs on one call. People like it when you know your chit and dont waste there time.
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Old 02-04-2012, 11:45 PM   #19
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Re: Charging For Quotes..... An In Depth Discussion.


Quote:
Originally Posted by Chasing Dreams
The way I work a kitchen remodel is the customer gets charged $70 for the initial visit/consult and they get 2 hrs of my time to discuss the project. Once I have an idea of what they are trying to accomplish, then I work up a "planning fee". The size and scope of work dictates this charge. Once the kitchen has been planned, I now have something to quote.
Everybody is different, and Im not saying my way is better but I sit down at the table and lay out the kitchen on the spot. It gives me a chance to show them the options and start talking about cabinets, tops, flooring, and mainly how much money they have.
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Old 02-04-2012, 11:52 PM   #20
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Re: Charging For Quotes..... An In Depth Discussion.


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I can, and I have an itemized list. We have done so many basement I can bid them in my sleep. I have prices from my suppliers for everything you can imagine in a database. I have several samples of granite along with prices because I know what Im pay a slab and for lineal feet of different edge profiles. Cabinets are easy because the design gives you exactly how much space you will have which is quickly converted into layout then price off of our cabinet price sheets. Carpet is always pretty consistent and I always have samples.

What I have done is analyzed how much it costs us to build a lineal foot of wall, and a square foot of ceiling, and a can light, and a half bathroom, and a lineal foot of cabinets, ect. Once you have trial and errored enough to get your price it is just a matter of keeping the database up to date with pricing, measuring, and selling. I sell alot of jobs on one call. People like it when you know your chit and dont waste there time.
I guess our areas are different. People want to see and feel the cabinets. They want to take paint samples to the countertop guy along with a door sample of their cabinets. They like to feel the difference in drawer slides. There is no way that I could think of showing them tile samples for backsplashes, floors or showers.

Like I said, too many decisions for them to just say nice to meet and talk with you for 3 hours, here's a check for $20,000.

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