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Billing for estimates

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Mitch_5
Mitch_5 Member Posts: 102
I've received alot of calls from people searching the web. We are on FAP here and highly rated on several web referral sites (not of our own placement, straight customer referral).

The down side has been lots of calls for us to go and evaluate existing systems. Lots of site time and emails with free advice. Just to find out we were a cross check for their existing plumber or someone looking for the lowest bid but wanting information.

We now say a minimum charge of one hour to go out and evaluate a system (takes eight hours on and off site). No takers yet, even if we said $1.00 we would most likely not get any takers either.

Anyone out there, especially in the MA area, bill for estimates?

Mitch S.

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  • clammy
    clammy Member Posts: 3,111
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    wriiten estimates

    mitch i usually try not to waste to much time on the tire kickers not that a few have not yanked my chain what i do is give them a where about price and tell them that this is a ball park and if they are intersted i'll narrow it down but if there's a shakeness to there voice i'm outta there and if they want a heatlose and all that jazz well there's a charge,usually i show them some pics of work and give them a good idea i use a no pressure sales and i use refferences and refferels ,sorry to say that is why i don't have a FAP ad it's seems many want the gucci mint stuff but few have the sea shells or deniro that get you that and usually end up and settle for much less peace and good luck clammy
    R.A. Calmbacher L.L.C. HVAC
    NJ Master HVAC Lic.
    Mahwah, NJ
    Specializing in steam and hydronic heating
  • Glen
    Glen Member Posts: 855
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    I would treat it -

    like a regular service call and follow your company policy of invoicing on site or mailing an invoice later. The client does have to be aware of "billable" hours & travel charges - as we all could spend considerable hours just driving about and looking at systems - for no reward. Some clients accept this responsibility and others want it for free. So whether its a wrench in our hand or a pen - writing a report/recommendation is billable. But you're right some expect this for nothing (try getting away with free time from your neighbourhood solicitor) - billing for estimates is a bit more sensitive though. We have used different methods - none of which are foolproof. So it is now just added to the quotation -
  • I agree with you both,

    In my area running around looking is mostly a huge waste of my time, but hey, it gets me "in the door". If I tried charging for estimates in this so called "money town" I`d spend alot of time at the railway station.

    Dave
  • joel_19
    joel_19 Member Posts: 931
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    Charging

    Looking at work is my full time job. We have charged when we are busy typically a small fee say 25$-75$. I figure if your not willing to pay that then how serious can they be about giving us 10k-200k$. This works very well. Would you rather look at 25 jobs in a week or just 10 who are really serious. Since your not scrambling to look at 25 you can devote more time to the 10. This is good for the client as they get more of your time and you don't feel so rushed. It's good for you because your odds of closing the 10 go up dramatically. With the down turn in realestate we are currently not charging as we need more oppertunities.

    Keep in mind however i'm not doing Blower Door testing or heatlosses or anything like that for free that is consulting with the appropriate fees. Strictly estimates. There are also no estimates for free on screwed up systems, this is simply on replacements. Also your time should be built into your overhead even if you still run some repair calls yourself. We refund that charge if they choose to use us. The purpose of that fee is just a qualifier you shouldn't think of it as income.

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  • Ken_40
    Ken_40 Member Posts: 1,320
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    If you go on ten esitimates...

    And only get one or two contracts, the problem is NOT whether to charge for the estimate or not, bur rather why isn't your estimate as good as it should and could be!

    Having analyzed this data many times (number of estimates vs. number of closed deals) we found a "hit ratio" of ~50%.

    Using a NEBS form for a boiler replacement estimate is one problem. We had MSWord basic paragraphs with blanks and they numbered almost 50 in number. The estimate/agreement/contract took less than three minutes to write, since all possibilities were already written as specific paragraphs. Our contract had details and specific items few of our competitors even thought of. Hence, the price was reduced to merely one of many elements - not the only aspect viewed.

    We never charged for estimates. If we were asked to do "on-site consulting," we would immediately explain we were there to gather information, ask basic questions and offer options and relative cost/benefits so a detailed estimate could be written. If the conversation went into a Q&A session obviously an excercise in "learning how it should be done," we'd oblige with direct comments like, "I can freely discuss what you want and how to achieve it; but, we cannot run classes on how to do what must be done unless you feel comfortable paying our consulting rate, which may be worth your while, but is not part of our 'standard' estimating process."

    However, I always felt free to respond and explain why doing a steam boiler in copper near-boiler-piping was a no-no; knowing full well another contractor had told the HO he was going to do it that way, despite it obviously being the wrong way.

    If you aren't closing 50% of your estimates, the problem is in your approach, your estimate format or other things within your control. It is NOT your price. The 50% you do lose is because of price - typically price alone.

    And those customers are the one's you don't want or need anyhow!

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  • Mitch_5
    Mitch_5 Member Posts: 102
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    Just got a reply form a HO on a job I lost.

    I was one of three plumbers in the area to bid.
    I know we do not talk price here so I will give not description of work.

    Other to were 11,4 and 10.6 I have a range of 10-8 being a HO run project it is tough to tell what we have to do.

    HO. got a plumber that's a friend of the GC from the south shore to do it for 4.5 half the lowest price of local contractors.

    But he did say he wants to use us for service in the future.
    I would like to see how bad it comes out and split.

    Several projects people said how great my detail was but either they were not doing the project, it was changed to work I do not do, we were a price check for the G.C's plumber I can go on. Have had some people getting ten bids and no specifications, wonder how you compare pricing. One person buying a house wanted us to do see the house in a two hour walk through on Saturday then propose a heating system. They were removing the old but did not know if they wanted FHA, FHW, radiant hydro air or how many zones.

    I know going on a rant but the number of jobs lost that I really was not in the running for or projects that did not happen for anyone that I spent a lot of time on seems to be increasing.

    Mitch S.

    Mitch S.

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  • [Deleted User]
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    This is your opportunity to explain to the homeowner the benefit of using a licensed and insured contractor running a legitimate business. Obviously this low baller is doing the job on the side. As long as the homeowner is aware of the risks, I wouldn't press the issue. I'd tell them that I'd be happy to evaluate the job for a fee if they'd like. The bottom line is you don't get something for nothing. We all know that but sometimes need to be reminded of it. Good luck.
  • Ken_40
    Ken_40 Member Posts: 1,320
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    Perhaps...

    it would be good for us to bring a copy of our liability insurance to show the client? Perhaps it would be a good thing to assure the client we will take permits and await final payment until all is approved?

    The low-ball artists typically cannot and will not go there, Why not "take" the base left open?

    Word of mouth referals are most convincing. Drop a few neighbor's names around. It never ceases to amaze me how many people I know and work for are also known to the client. Home run every time IMO.

    Final note. If your overhead is so high your numbers are uncompetitive, or if your looking at every job being more than just reasonably profitable, you won't have to worry about lost estimates for long.

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