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Discussion Starter · #1 ·
Hey guys I've got a couple of questions, I'm sure some of you would like to share some of your earned knowledge. I'm still somewhat new to the ownership side of a remodeling company. I'm swamped with Proposals right now, and I seem to get the tire kickers quite a bit. My question is how do you screen callers while avoiding discouraging potential callers. Also what does your normal "Design Consultation" or estimate look like. Is it free? Is it thorough to the point you would write a proposal for a home addition for free? And while I'm at it I've been thinking about a "Welcome Package" folder containing information on some things to expect during remodeling just to keep the client happy. Any thoughts on that? The best marketing avenue for serious customers? Is it common for most people to be oblivious to the cost of remodeling? I appreciate any answers in advance. Also I'm doing a proposal for a home addition, customer is getting a loan from wells Fargo against the value of the proposed addition. The bank will not pay any upfront costs. All material and labor costs for around the first month will be out of my pocket. How common is this?
 

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SL,

Welcome to Contractor Talk!

I haven't gotten good at screening callers yet. I've tried it a couple of times by asking what their budget was for the project or if they even had one and it felt pretty awkward to say the least.

How I typically handle the design consulation and estimate is I go look at the job for free and come home and figure up an estimated price and give them that. I let them know that this price could be low or high and that it could change when I do the actually bid. I get back with them over the phone but also via email stating the estimated price and what it includes, also mentioning again that my price could easily change but will more than likely go down because in estimates I figure the worst case scenario.

Then if they are happy with my estimate and my company and have verbally chosen me for the job I will charge them a fee to start the bid. Maybe 10% of the job. Once I get that payment I will do the exact bid and get my subs involved to come look at the job (I don't get my subs involved until I get the confirmation that I'm doing the job as I don't like to waste my subs time). Then I send the customer the final price for the job via email and let them know that I can bring the contract by whenever they would like.

So my estimate looks like a phone call and an email that has the round about price for the job.

I think a welcome package would be a good idea, something I've been wanting to incorporate into my system.

Word of mouth I think is the best way to find serious customers.

Yes, I find it very common for people to be shocked when they find out the actual costs of remodeling. When I meet with people for the first time I let them know that it costs a fair amount of money to do things.

Depending on the size of the addition I don't like the thought of no money being there for the first month of the job. That could be nearly the entire job depending on how extensive the addition is. In my contract I have it setup where I get progress payments at different stages of the job. For a small job it could be (10% at proposal acceptance, 30% at startup, 30% at a midpoint, %30 upon completion)

I think if the bank will not hand out any money for that long then I would expect the customer to front the money for that first month.
 

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Discussion Starter · #3 ·
Thanks for the info. I agree with the payment options in reference to the bank. I just put quite a bit of time in with them before they even told me the bank was different in regards to payment. I restructured the bid so some draws are due in the beginning stages of work after some necessary demo that is actually quite extensive and then the foundation, so that the first draw will be a bit higher and pay for materials for the following states of the project. But I still am wondering if I should bend over backwards to accommodate this customer. My business is still young and I don't want to be turning jobs down, but I'm considering it. Also I've been around a little bit of design(not too much) but for the customers that don't want to pay for an architect or designer how should I go about the design I'm building off of? Should I show them some general looks(contemporary, rustic,etc) and help them select items that fit, and what's the best starting point for design? Or should I just let them pick out items they like? I want to grow to the point where I can have an in house designer and architect but for the time being what are my options? And what works for you guys?
 

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how many bids are you getting?
what is your budget?
when do you plan on starting?


if they are getting more than 3 bids===dont bother bidding, move on
if their budget is 1/2 what it needs to be===give them a rough budget---move on
if they plan on doing the project 1 year from now==== odds are they will change 20x in a year...your odds are low

qualify your owner...use advertising to screen things for you....i added 'do it right the first time' to my old phone book ads....my price shoppers dropped to almost 0...i got very few phone calls, but the ones who called typically became customers.......its an example of using key words to attract the right customer and discourage the bad customer...its one way to choose your customer.

if your not winning 33% of your bids you need to change something....when i started out i would win 10% of my jobs w/ homeowners...i was spending all my time driving around and bidding on jobs where i knew they would end up hiring a side jobber..

from my experience people go into a project with a fixed budget....when they find out a pro is 2x that cost they keep dropping their expectations until they find a side jobber or a guy next to them on a bar stool to do their project.....they arent going to wait another 2 years and double their budget....they make what they have work....these are the customers you need to see ahead of time and skip...

i have a flat rate pricing sheet...i can bid on most projects in less than 5 minutes......the faster you can bid the better

listen for keywords when your talking with customers.....when they start talking about price in the first sentence you need to throw them a rough price...most of the time these customers will be silent for a few seconds...they are in shock....get rid of them asap and move onto real customers

referrals are the best customers...they typically have already decided on YOU before they pick up the phone
 
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