Charging for estimates can be a big plus, but when’s the best time to pull the trigger and jump into the ‘charging for estimates’ pool and not go down like a Kamikaze. Oddly enough, Kamikaze translated means divine wind, which you may need to get you started doing this. Before you click out and move to the next screen though, why don’t you watch the video below and then make up your mind.
I know too many remodelers, some quite experienced with more than 15 years on the job, that still chase every lead that comes in. I think their motto must be, “I’ve got plenty of time to spare. Would you like to use it?” Better pre-qualification methods will cut down on the amount of “false” sales calls you make, and charging for estimates will do it even better and faster.
Watch the short video below and then read on to learn how to start charging for estimates, rather than just giving them away.
How many of the leads you receive become actual projects? Is your closing ratio 1:3 or is it 1:10? If it is the latter, and let’s say you spent just 10 hours on an estimate, then you spent 100 hours on estimating to get one job. At a rate of $50/hour, that’s $5,000 you just spent to get one job, not to mention the two weeks of your time that you spent on bad leads, that you could have used to advance your business in other ways. And be honest about your time. Add up the time it takes to receive the call, research the prospective client, set up the appointment, drive to their house, meet with them, photograph and measure, go back to the office, prepare the estimate, prepare the proposal, go back to their house and present it to them. I seriously doubt you can do that in 10 hours or less.
And if you do it in a lot less time than that, what short cuts are you taking? Are you calling them up and giving them the quote over the phone? Or worse yet, emailing it to them? That’s a good way to ensure you don’t get the job. There are lots of ways to reduce the estimating time, but that is not our topic right now. The point is, you spend a lot of time going on sales calls, many that are dead ends, and you don’t get paid a dime for your time.
There’s a simple, pain-free way to start charging for estimates, and I think once you get your feet wet, it get’s easier and easier. You may start out charging a token amount for an estimate, such as $200. You might even refund the fee if they choose you to build their project. If you are a design-then-build firm, include the estimate in the design fee. As you gain more confidence in this procedure, you can raise your prices and keep the fee. (Learn more about the Sales Process in Module 1 of the Scientific Remodeling System)
You have to really believe in yourself and your worth, so your prospective clients can feel that when you talk to them. When you get a call and tell them you do charge for estimates, make sure that they understand the benefits they’ll receive when they hire you to quote their job. Tell them what they can expect when they pay you to estimate their project. If you don’t convey the value they’ll receive, it will be hard to convince them to move forward. You might tell them about the visit procedure, how detailed your measurement procedure is, that you photograph the area thoroughly, and that they can expect a well-written scope of work, laying out exactly what is included in the quote (use the word “quote”, never “bid”). In this all-important first call, you have one chance to, not only tell them the benefits of hiring you to estimate their project, you have the opportunity to demonstrate how well organized and professional you are.
I remember one contractor who took a different tack on charging for estimates. He charges them to write the scope of work – the estimate is free. He explained to them that he couldn’t give them an accurate quote without a well-written scope of work. Once he explained how much work goes into the scope of work, they gladly paid him to detail their project. We took the same approach, except that, being a design-then-build company, we sold the design and threw the estimate in with the design.
One way to ease a prospective client into this new experience, is to offer them an hour of free consultation at your home office or office. This gives you an additional chance to prove your worth without spending a lot of time going to their home. This was always the first option we presented to a new prospective client. And I know several other contractors who have used this method successfully. To put this in perspective, ask your attorney to come out to your home for the first consultation. Good luck with that one. Well, you are no different. If you think you are, it’s only in your mind.
Prospective clients, especially today, are looking very critically at how professional you appear to them. If your impress them with your absolutely organized procedures, they will consider paying you for your estimate. If, after all of your best efforts to show them the benefits that they’ll receive, they refuse to hire you, then there is a very good chance that they aren’t going to hire you to build their project anyway. In fact, in my experience, they won’t even hang around long enough to listen to your whole spiel before hanging up. They’ll call the next poor guy, who will spend his precious time, give them a price, and then hear the fateful line, “We really need to think about this. We’ll call you.” He satisfied their curiosity (for free). They got what they wanted. End of story.
There is a place to comment below. Tell us whether you charge for estimates, and how it’s working for you. Or why this just doesn’t work for you.
Wishing you the best of fortune, Randall
This article was written by Randall Soules, remodeling coach, adviser, educator, and creator of the Scientific Remodeling System, showing you better ways to advance your business, raise your profits, and improve your life, through the use of superior remodeling processes. If you would like to discover better ways to run your business, click here. He also provides his uniquely customized one-on-one coaching to a select group of contractors. Feel free to contact Randall at Randall@scientificremodelingsystem.com.
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