Charging for estimates is not working!

[powerslave]

This is really getting far afield. Bidding and estimating on actual (and substantial) jobs is a whole other issue from the once in 5 years homeowner call about a 2 hour service job for a ceiling fan added or a tripped breaker.

Even a largish resi service call isn't likely to be more than one days work for a well equipped service truck.

Agreed. It's apples to oranges. And as such there will be alot more estimates to be performed in the course of a year for that resi service company than for construction.

 

[aline]

The last estimate I just did cost me $7K.

You think I'll have any luck telling them I need to charge them for this, and if they use my services I will credit them for the estimate.

And you think they'll only get three estimates from now on?

Sounds like all you guys complaining have the same thing in common.

You just don't understand the market your in, and why you're in it.

I guess I don't bid on big enough jobs to relate to an estimate costing $7K to provide.

How does the cost of this estimate break down?

What's involved in providing this estimate that would make it cost $7k just to provide this estimate to the customer?

I'd really like to know.

 

[celtic]

how to find out at a moment's notice if huntington seacliffs is breaking
high enough to merit a reschedule of the day's work.

You can...

http://www.surfline.com/surfline/forecasts4/forecast.cfm?alias=socal

 

[satcom]

We have one area where home owners call 5 or more contractors to to get a quote on a ceiling fan or motion light, then to make things worse, they schedule them to come at the same time, then when they come they stand at the door, and say ok which one of you guys has the best price, things like this,helps, bring about trip charges, and charges for small jobs, estimate charges are usually dropped if they contract for the services, but to avoid abuse, you need some protection, or why not just leave a pile of twenties on the counter and let the costomers help themself, when your in business, you need to manage it so it makes you money, not costing you money.

 

[Dnkldorf]

What's involved in providing this estimate that would make it cost $7k just to provide this estimate to the customer?

I'd really like to know.

Actually the estimate was more than that.

What's 2.5 weeks of your time worth............$
Printing and binding costs........................$ 950
Software they require.............................$500


I understand my market, work within it, and find oppurtunities that exist within my market.

I don't complain about what others in my market should or shouldn't do, I don't scare anyone about how the sky is falling on our industry, nor believe there is only one or two ways to operate a business.



But hey, I'm just a hobbiest.

 

[celtic]

Actually the estimate was more than that.

What's 2.5 weeks of your time worth............$
Printing and binding costs........................$ 950
Software they require.............................$500


I understand my market, work within it, and find oppurtunities that exist within my market.

I don't complain about what others in my market should or shouldn't do, I don't scare anyone about how the sky is falling on our industry, nor believe there is only one or two ways to operate a business.



But hey, I'm just a hobbiest.

What was that for... 18 CFs in a ranch w/o basement or attic access?

 

[powerslave]

Actually the estimate was more than that.

What's 2.5 weeks of your time worth............$
Printing and binding costs........................$ 950
Software they require.............................$500


I understand my market, work within it, and find oppurtunities that exist within my market.

I don't complain about what others in my market should or shouldn't do, I don't scare anyone about how the sky is falling on our industry, nor believe there is only one or two ways to operate a business.



But hey, I'm just a hobbiest.

I would guess you deal in relatively large commercial construction. How many sidejobbers are you up against? How many unlicensed guys go after your share of the market? Probably not many because it's very regulated at your level. Guys working illegally aren't bidding against you. Shops at your level are professional because they wouldn't be there if they weren't. They are educated in business.

 

[stars13bars2]

This real estate guy calls for an estimate. Tells me he has to get three quotes for his boss and already has two. After looking at the job, I figure the job is worth about $3500. Then he offers to show me his two quotes which were $ 2500 from a licensed and insured contractor that was just trying to cover part of the cost of his idle crew, and $ 1800 from an unlicensed crew of illegals. When he asked what my price would be I told him $ 3800. He asked me how I expected to get the job with a price like that, and I told him $1000 for him, $1000 for me and we would sub it out to the illegals for 1800. You know that guy was not looking for the lowest price after all.

 

[Dnkldorf]

How many sidejobbers are you up against? How many unlicensed guys go after your share of the market? Probably not many because it's very regulated at your level. Guys working illegally aren't bidding against you. Shops at your level are professional because they wouldn't be there if they weren't. They are educated in business.

You think so huh?

 

[Dnkldorf]

This real estate guy calls for an estimate. Tells me he has to get three quotes for his boss and already has two. After looking at the job, I figure the job is worth about $3500. Then he offers to show me his two quotes which were $ 2500 from a licensed and insured contractor that was just trying to cover part of the cost of his idle crew, and $ 1800 from an unlicensed crew of illegals. When he asked what my price would be I told him $ 3800. He asked me how I expected to get the job with a price like that, and I told him $1000 for him, $1000 for me and we would sub it out to the illegals for 1800. You know that guy was not looking for the lowest price after all.

Yup, it's called selling the job on the technical approach.

 

[powerslave]

I didn't mean any offense. I don't know what you go up against. But at the same time I have to tell you it's frustrating to lose a job to a second year apprentice that is doing side work.

 

[tonyou812]

To each there own.:smile:

I personally wouldn't let them take their shoes off. Just because we carry workman's comp. doesn't mean we want to use it in place of safety procedures. My boots have saved my feet more than once.

I guess my point is we always put on shoe covers over boots. The plumber commercial you have described seems to imply that they never wear shoe covers and instead always take off their shoes. I can see certain tasks that could be performed without wearing shoes but not the majority of them let alone all of them. Again, my personal viewpoint.

I would have to ask my insurance agent what they would think of the practice also.

same here if I was maybe looking at a job I might take my shoes off but not if I was working there. And if you have that written in your employee manual I would remove it myself. That's just asking for problems IMO. What would Workman's comp think if your men were not wearing shoes? and whats up with sneakers? is that OSHA kosher? I personally dont like guys wearing sneakers, Ive seen a few guys get stuck with nails and that's no exaggeration. I was a sneaker guy when I started out and after I rolled my ankles a few times I wised up quick.

 

[aline]

I think the whole contracting industry would benefit by charging for estimates. If everyone charged for them people would pay. They just might only get three estimates instead of ten. They might not have you come out just so they can get an idea of how much they will save if they do it themslevles or have their brother in-law do it.

The last estimate I just did cost me $7K.

Actually the estimate was more than that.

What's 2.5 weeks of your time worth............$
Printing and binding costs........................$ 950
Software they require.............................$500

This is why I beleive the contracting industry would benefit by charging for estimates.

Why should you have to pay printing $950 in printing costs and $500 for software that they require just so you can bid their project?

For a project of this size I would think they could afford to at least pay the $1450 for this.
If they get three bids thats $4350 and if they get a credit back from the guy thats awarded the job thats $2900. This seems reasonable to me.

I'm not necessarily saying contactors need to charge for every penny it costs them to complete an estimate but spending 2.5 weeks of your time and forking out $1450 to bid a job against who kows how many others seems a bit crazy to me. What if they decide they don't have it their budget to complete this project and they don't award the bid to anyone.

On a project this large the people wanting to get bids for this need to factor the expense of getting these bids into their budget. If every contractor charged for this what choice would they have?

I worked with a guy that wanted to open a gym. He spent a lot of money just to find out how much it was going to cost. He spent quite a bit having prints drawn up and getting copies made. Everyone seemed to want to charge him a fee for their service except the contractors giving him a bid to build the gym. After he got all these free estimates from contractors he decided it wasn't feasible for him to build the gym so he never went through with it. He was out a fair amount of money because of his decision not to have the gym built but so were the contractors that bid on it and they didn't have any say in it.

My point is that I just think contractors should at least charge some kind of fee for their trouble and if everyone did people would pay. What choice would they have? I know in reality it's not going to happen but if it did it sure would benefit everyone in the contracting industry in my opinion.

 

[aline]

I understand my market, work within it, and find oppurtunities that exist within my market.

I don't complain about what others in my market should or shouldn't do, I don't scare anyone about how the sky is falling on our industry, nor believe there is only one or two ways to operate a business.

So we should all just keep our mouths shut and not voice our opinions on this forum?
It sure wouldn't be much of a forum.

I voice my opinion. You voice your opinion. I don't see a problem with it.

Some are open to changes in our industry and think changes are a good thing.
Some figure nothing's ever going to change and your just going to have to deal with the way things are.

The thing is it's all up to us. Each indivdual has to want things to change for the better and actually do something to make it happen.

I'm not always successful getting a dispatch fee to go out and give an estimate but I don't just throw in the towel and quit trying. I have hopes that things will change.
Maybe I'm just a dreamer.

 

[Ohmy]

When you spend money on advertising hopfully you're tracking the return on that investment so that you know what the return on that investment is. You want to spend your money on advertising that gives you the best return for your investment.

The same thing applies to giving estimates. You should track how much it costs you to give free estimates and what the return on those costs. How much money are you getting back compared to how much you are spending giving free estimates?

When you charge for estimates you need to track your costs for providing these estimates and track the return on these costs. You may find that by charging for estimates you will spend less money giving estimates, close more jobs and have a higher return on your investment.

Unless you track things like this you really don't have any idea what's giving you the biggest bang for your buck. A lot of contractors don't bother to track their advertising or other expenses and don't know what the return on these investments are. I'm sure some have advertising that's not even paying for itself but they don't track it and they don't know.

It's all about getting the most from your investments. If you're getting a higher return on your investment with free estimates than keep doing it. If you're getting a higher return on you're investment by charging for estimates why would you keep giving free estimates? Unless you've tried both how, do you know which one is going to give your the best return on your investment?

Try it both ways. Track the expenses and the results then decide.

I always keep track of how much time I spend giving estimates and then figure what that would cost me if I was paying an employee to do it.

I am a lurker, but I just have to respond to this thread. Especially, the idea of tracking. We had doubts about the economy and our $29 estimate fee so we checked. I personally called every person that call our company but did not schedule because of the estimate fee (you can only do this if you track your calls). 100% of the miss leads had gotten multiple estimates (average 4) and over 50% of the callers never got the work done BY ANYONE! Those are leads we can all afford to lose! Stick with it Zappy!

 

[growler]

This is why I beleive the contracting industry would benefit by charging for estimates.

Why should you have to pay printing $950 in printing costs and $500 for software that they require just so you can bid their project?

If you are are bidding the size jobs that require you to spend $950 printing and $500 for software then you want there to be a few obstacles that will keep every fly by night contractor in the country from bidding on the job.

If it was free then many contractors even without the financial resources to complete the job would be bidding even if they didn't have a clue. The $1400 is nothing compared to the size bond that you would have to put up to do this job ( just to show you are bonafied and can complete said work).

If Dnkldorf is bidding those jobs that cost $7K just to bid he is playing with the big boys where you either win big or lose big. A company near me lost two million in a short time in 1998, they do know what they are doing and they did make a come back but things were rough for awhile. The owners had their homes and everything else they owned mortgaged there for awhile just to cover the lose. Do you think they were worried about the few grand it would cost to bid a job? One of the owners told me he didn't get a good nights sleep for about 8 month until things started to turn around. They really could have lost everything.

It's like high stakes gambling, if you are going to play that game you had better have some serious money behind you.

 

[aline]

If it was free then many contractors even without the financial resources to complete the job would be bidding even if they didn't have a clue. The $1400 is nothing compared to the size bond that you would have to put up to do this job ( just to show you are bonafied and can complete said work).

Shouldn't this be up to the people wanting the bids to verify that only contractors that have the financial recources to complete the job and have a clue be given the opportunity to bid the project?

Would a bonding company even bond a contractor that doesn't have the financial resources to complete the job?

$1450 doesn't sound like it would be to hard for a lot of contractors to come up with.
They could just put this on one of their many almost maxed out credit cards and bid the job.
Many don't really worry about their time spent estimating. Especially when they don't have any work at the moment.

 

[bradleyelectric]

Shouldn't this be up to the people wanting the bids to verify that only contractors that have the financial recources to complete the job and have a clue be given the opportunity to bid the project?

That's what the bond proves.

Would a bonding company even bond a contractor that doesn't have the financial resources to complete the job?.

No, That's why the bond proves they can, and it they are wrong the bond company is responsible for paying to have it completed. That is why when a company is sinking they will pay their bonded jobs first. In case they pull out they can still get bonded.

$1450 doesn't sound like it would be to hard for a lot of contractors to come up with.
They could just put this on one of their many almost maxed out credit cards and bid the job.
Many don't really worry about their time spent estimating. Especially when they don't have any work at the moment.

Look. He didn't have to turn over the software after he used it for this bid. It's a tool that didn't wear out yet. He just wanted to stir the pot that he's not involved in. His salary is overhead. It's a whole different industry than residential service. My business is set up as 3 different divisions. They are all tracked and run very differently.

 

[aline]

That's what the bond proves.



No, That's why the bond proves they can, and it they are wrong the bond company is responsible for paying to have it completed. That is why when a company is sinking they will pay their bonded jobs first. In case they pull out they can still get bonded.

I thought you would get the bond after you were awarded the job, not during the bidding process, so they wouldn't find out you couldn't get bonded until they awarded you the job.

So you would need to get the bond before you bid the job?

 

[bradleyelectric]

I thought you would get the bond after you were awarded the job, not during the bidding process, so they wouldn't find out you couldn't get bonded until they awarded you the job.

So you would need to get the bond before you bid the job?

It would depend on the job, but if you were awarded the job but couldn't get the bond, you would loose the job and it reawarded. Often with public jobs the bond has to be submitted with the bid documents.