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charging for estimates
Comments
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Interesting
how on so many posts one item is taken out and discussed where the rest of the note is forgotten or ignored.
Sure the lawyer analogy is poor but not apples to oranges. How about Macs to Delicious?
I tried to make the point that there should be a way of contractors to weed out the shoppers and the initial contact with some general questions should be able to do that.
I have estimated $ 250,000,000.00 in the last 14 years and received about 30% of that. How much of the 30% would we have missed if we started a fee structure for estimates.
Again, this is a poor analogy as the company I work for does 10 to 15 million per year and we have to crank out the esttimates. The point is where do you draw the line and what is the fee structure? Are we telling just HO they have to pay? How about the small commercial and industrial? How about the small contractors?
It still comes down to the quality of the presentation and PRICE.
Does everyone who does mechanical just hire their electricians, insulators, control folks, etc., etc. without estimates. Do we pay them?
Great discussion without rancor. Have to love it.0 -
No free lunch
I think Eric hits it here. Build the cost of your "free estimate" into the price of EVERY job you quote.
At some point we as contractors must learn to qualify customers just as they are qualifying us. I know it isn't easy.
Our industry created this monster and "free estimates" appears on nearly EVERY advertisement I see along with "24 hr. service".
Our industry has trained people to expect this.
Why would a homeowner agree to pay ME money for something I haven't done? My overhead is not their concern. The way they see it is that THEY are providing US with an opportunity to make a living, not that WE are providing THEM with an opportunity to see how smart we are.
The good contractors will get their share of the work for higher prices.
It stinks when you drive to an appointment, do the calcs, and present yourself as someone that is very good at whjat you do, then lose it to "BUBBA". But it also stinks when you order equipment for a job and the supplier or manufacturer screws up and costs you BIG money for a lost days work. How many of us backcharge them? We, the paying customers, are expected to eat it.
I will expect customers to pay me for estimates when suppliers expect to pay me for their screw-ups.
JMHO.
Mark H
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you said
it all, Mark.
"Estimates" could be free, but design and engineering is built into the price of the job.
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YES!! HotRod
What if several contractors show up to bid on my job and only ONE proves to me that he can give me what I want as far as the job, not the price. Should I pay the other guys for a lousy design/quote? I'm not talking about piddly stuff here. I mean a larger job like an addition or a gut rehab or something that will run into some real money. Isn't it worth YOUR while to put in a bit of effort to land a big job? Should you get paid if you are not selected to do the job because someone else gave a better soloution?
As far as what I do for a living........Well I'm between jobs right now, but what I do is a bad word around here that starts with the letter E. I'm not your typical one though. I work with my hands as well as my noodle. I've done everything from cleaning out storm drains to pulling wrenches on fusion reactors. I have also hired contractors from many disciplines for numerous jobs. If one ever asked for money for an estimate I would laugh myself silly. It has never happened to me. I have also reviewed corporate bids from large firms on facility installs. These firms spend thousands of dollars preparing these bids for multi-million-dollar installs without a cent in return if they don't get the job.
Eric0 -
little bit easier to bury
The time on multi million dollar jobs than some home heating systems. sure is the way they do it at government facilities and large corporations where they will expect return on investment and dip into taxpayer's pockets. But what you guys are talking could be possibly 10-15% of time spent doing estimates to total time spent doing the actual job itself. how many of these large cos. really do residential replacements. consolidators do not seem to last very long, too top heavy for the going rate!! And at what cost would the systems be with all the bells and whistles of "free design fees and consultations" trust me ,they would still not give up thier specs as proposed by some here.
keep in mind that all the sales people and and designers are top heavy in the world of big buisiness, no matter how you get there, someone is paying. You just may not be aware of who, nor care. Are we collecting paychecks here?? Cause i'm thinkin most smaller shops (is what we'are talkin here correct)is where you will find the best of the bunch, and of course the worst!! I would not consider going to a commercial contractor for a home heating system nor would i expect to get the royal treatment from a guy that bids 300k projects for my piddely home project. What I see is wanting and wishing for the whole nine yards, and getting insulted when they do not get it, yah me too!! I tend to deal locally and use references when i purchase also, but i do not expect people to work countless hours for how i percieve the market to work!! And who the heck is Rancor?? I thought hector was making the trouble!!
Murph'
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Reputation Sells!
I had the opportunity earlier this year to go with a firm as a lead technician/plumber in the northshore area of Milwaukee. All the tricks about advertising, marketing etc. are not needed by this firm. They rely almost entirely on word of mouth and referrals. We do free estimates as a courtesy and due to our low advertising costs have no problem doing this.We average around a 85-90% sucess rate on these quotes.
This firm also does hvac and drain cleaning. We have a client base that is now over 13,000 customers. As of yesterday we were at over 7,000 calls for the year. This firm should be teaching the seminars on how to be sucessful in our industry. Honest,fair priced and highly profitable.
All this without using flat-rate, in fact we get many requests from customers who have received a flat-rate bid, and we easily are lower than our high overhead proponents of flat rate.
Our only problem is keeping up with mechanics due to our heavy work load. Any plumbers/ wetheads looking for work in the Milwaukee area?
for further details email: richk@nconnect.net0 -
Too bad You can't see it from our perspective
Much like the best lawyers and doctors, the best contractors don't have to do free consultations..why should we? Would you? Mad Dog
To Learn More About This Contractor, Click Here to Visit Their Ad in "Find A Contractor"0 -
I see it.
I just don't want to pay for it. I'm John Q. Homeowner remember?
I really do feel for your situation though. It must be frustrating to say the least to lose jobs to Bubba when you know that he isn't even in the same league as you. I'm starting to think that screening the customer over the phone is a better way to go than charging for estimates. Try to make sure that the customer is not looking for a lowballer. Ask the right questions. Use a checklist if you have to.
If you loose lots of jobs to contractors that ARE in the same league as you then something else is wrong. Either with your numbers or the presentation.
If I call the three best contractors in my area to bid a job and all three of them want money up front, then I will pay. I already know that I am going with one of them because I have already figured out that Bubba will NOT give me what I want regardless of his price, so I don't want to waste MY time. Maybe charging for estimates is a good way to screen customers, but only if your competition is doing the same thing.
I'm in for at least a nickel now.
Eric0 -
Referrals
Eric,
I am pretty sure that Maddog waves the fee for repeat customers and he may also wave it for referrals(?).
As I said in my post, our industry created this monster and it is doing NOTHING to kill it.
Look at commercial and industrial companies. They have estimating departments where people sit hunched over in front of spec sheets, prints, and CAD drawings day in and day out. They put together bid packages for work they want to get. Who pays for that if they do not get the job? Ultimately it is another customer, so let's all stop calling estimates "free". They aren't really free.
So here is another question for the consumers that visit here. Would you object to a contractor adding an "estimate fee" to the cost of your proposed work? You pay it ONLY if you accept the bid.
You're paying it already, but would it bother you to see it in black and white?
Mark H
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Sell, sell, and more sell
Paul:
Do you deliver to Cleveland? Very good point. Don't for get the ferquent buyer extra service. Got any boilers?
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I know its in there
If "estimate fee" appeared as part of a detailed parts and labor estimate I doubt it would bother me. You could roll it into "design" or "engineering" or even "misc". I know its in there even if I don't see it. You are in business to make money. Your overhead MUST be accounted for in every single quote you make or you won't be profitable. If your business is having trouble because of all the work you do for the jobs that you don't get then your doing something wrong.
As a home owner I wouldn't want to pay several outfits just to give me estimates. I expect the folks I HIRE to make money from me and NOT the ones I don't. If I had to pay for all estimates then I'm open to schiesters who could make a living giving bogus estimates and collecting their fee. How many estimates could you do in a day if that is all you do?
I also don't think that $45-75 would cover the work required to prepare an accurate estimate so to me it would be a meaningless charge. Are you good enough to rough out a heat loss and size things properly and add it all up in an hour or two counting travel time? Some how I doubt it. $1000 seems to be the number going around for a full blown analysis. You could probably get in the ballpark for a few hundred. I'm just shooting from the hip here though.
Eric0 -
Thanks Eric
I wish more homeowners would chime in.
Lots of pros come here to learn about systems and technical stuff, but the pulse of the consumer is just as important.
Your input is GREATLY appreciated!!!!
Mark H
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Awwww Shucks
Thanks for the kind words.
This site is advancing the industry by leaps and bounds.
Cheers to all.
Eric0 -
Eric,
> Thanks for the kind words.
>
> This site is
> advancing the industry by leaps and
> bounds.
>
> Cheers to all.
>
> Eric
0 -
Say, Eric......
Thanks for the compliment above. Little things like that can really make your month!
BTW E's aren't all that bad, I've worked for some in Chicago. Oh course I may be a bit biased since I took some enginneering courses in college while getting an Architect's degree. Now if we could only do something about those rediculous designs some are trying to get the engineers to stand up and heat and cool!
Boilerpro0 -
As I stated before as a homeowner I am ok with paying the estimate. I would much rather pay for a quality service provider then some hack. Do you know what charging for an estimate does? It sets you apart from the rest of the crowd. As a buyer I have to sit back and think this guy does it different from the rest!!! Why is that? He is probably very good at what he does. He also will still be going out for his Fish Fry on friday night even if I don't buy from him. He also has probably been around for 15 years or more and will still be around in 10 to 15 years after I buy from him.
You wouldn't be sitting at my table giving me my estimate if I hadn't already done my homework. In my house you must be referred to me to even get in the door. I do not shop around for 10 different estimates. I may get 1 more just to be sure everything is in line. As an example I had a water softener installed last fall. I got 2 estimates. Both very reputable places with similar softeners. I bought from the one I felt was more knowledgeable about my needs and I paid them $200 more then the other place. In my opinion it was the best money I could have spent. I just looked in the phone book and found 9 oil companies in my area. Do you know how many I called when I moved to the area? Just 1 and that is the one I had referred to me. Am I paying more then I could find elsewhere? I am sure I am. But they take very good care of me and if I have a problem they fix it very quickly. That is whats important to me.
I live in the real world and understand how people work and price will always be an issue. But there are people out there that don't care as much about price as much as they do about service. Find those people and take care of them and everybody wins.
Bryan0 -
Consumers and prosumers
These days more and more I find homeowners researching their home building or improvement projects a lot more. Generally a good thing, depending on which "radiant" website they end up at:)
Regardless the process shows homeowners a bit of what is involved with radiant heat, or any HVAC, project that is done with a loss and design as the first step. Hard to do a real good job of that design over the wires without seeing the home, I feel. Hense the number of under or over designed systems that seem to go via mail. The picture and drawing on the fax sheet often times does not mirror the job when you pull in the driveway! Again my opinion!
One last thought on estimates and the cost to present them, from a contractor. Yes, somewhere this "cost" has to be accounted for. Let the cucstomer know upfront and apply the charge before a contract is signed, or put that cost into you overhead "cost of business" column, to be spread among the years income. Regardless, it has to be covered SOMEWHERE.
Putting it as a budget figure when calculating you labor hour rate, for instance, can create a large per hour figure. Now when someone asks why you cost per hour is high, you end up explaining the figures that go into that column.
In Joels case would he budget 100, 200,1000 "free estimates" per year? This is why I feel a design, trip, service call, whatever you want to call it, covers this legimate "cost" in a way that if fair to all parties.
What ever a contractor decides, the bottom line is you have to make more than your cost of running your business, or guess what! Next year you may be working for your competitor.
hot rod
To Learn More About This Contractor, Click Here to Visit Their Ad in "Find A Contractor"Bob "hot rod" Rohr
trainer for Caleffi NA
Living the hydronic dream0 -
Your work speaks for itself!
The pictures that I have seen here of the quality installs that you folks do has really opened my eyes. I used to think ALL plumbers were Bubbas, then I came here and now I think lots of you are engineers! You start with a blank sheet of paper, take some data and crunch some numbers. Then you design a system, size the equipment, install, test, and troubleshoot. All on a budget too! You learn control theory, know what you expect the system to do for you, and make sure that it does just that after it is built.
I love this site.
Eric
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Murph,
Nope no bias. Just my point of view. I have to agree the Wall has had a strange feeling to it the last couple of days. Seems there has been a lot of the insults thrown around latley. Its kinda funny and kinda sad that one poster had to be given a time out.
Bryan0 -
Another HO's $0.02
Guys,
Excellent discussion here...and done in a gentlemenly manner as usual. Bryan, I am glad (not "sad") about the "time-out" because it sets an example to the rest of us to behave in a certain manner. That's what makes this place special. I say "us" because I'm here too, and have done an occasional boo-boo myself.
My take on this matter is this; How about a three minute phone conversation that states your basic philosophy regarding estimates...a fee for a detailed estimate is charged and is part of the price if the job is done by you...if you like the potential customer after this phone call (and can afford the overhead) then you do an inital visit for a max. of fifteen minutes and present the (already phone interviewed) customer with your basic "package".
This "package" contains a breakdown of what you do and the range of prices from your initial look at the job. If they are still interested, you provide your specific estimate with all the bells and whistles for $XXX as previously agreed.
This would both help to weed out the low-bid seekers on the phone, get an initial face to face meeting with the rest, and still get some money back for estimate time (previously "pure" overhead). The key IMHO would be to limit the initial phone and visit times, and if the customer looks like a strong potential, he/she has agreed to pay the estimate cost so you're even...at least with this one :-)
If I knew ahead of time, I wouldn't mind this a bit as a homeowner. If I have another trade coming to my house (GC, carpenter, sparky) they give free estimates, so this suggestion is a hybrid of sorts due to the extra complications of heatloss calcs and layout for the quality systems I see on this site.
Take Care, PJO
0 -
PJO,
When I said its kinda sad about the timeout. I meant that it is sad that a good lively discusion has to come down to insults and name calling. That guy deserved to get booted no doubt about it.
Bryan0 -
I Hear ya ERIC, BUT
we've tried to weed 'em out with the whole spiel - believe me! They say things like: "Of course I want the highest quality work....Well! Im sure the other guy has comp too!" Trust me bro, I've been there. The only thing that weeds them out is a fee. You'd be amazed at some ho's - they won't pay $25 bucks. Its' not about the money, its about their mentality. I could care less what the rest of the guys are doing in my area 99% don't charge for a n estimaTE, BUT THAT IS THEIR OWN FAULT. We operate out of a dense, suburban area, we got 50 licensed contarctors in the 3 mile radius. Over the years, and after seeing most of there work, I realize that we have onl;y one competitor out of 50, and they are even more expensive than we are BUT WE DO EVEN NICER WORK THAN THEY DO. I REFUSE TO BE USED ANYMORE>>>WE CHARGE FOR ESTIMATES< BECAUSE WE CAN!!!!!!! Mad Dog
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It seems that the answer is......
It depends....
Everyone's situation is different.
Do what works for you.
And have a nice day.
Eric0
This discussion has been closed.
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