Reasons For Not Giving Free Estimates
- Thread starter Sparky555
- Start date
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Rewire
Senior Member
- Location
- Lake of the Ozarks
try this math we both get the same 100 calls,I get the 50 that wont pay you,then out of the remaining 50 you get 40 and I get the other 10 . that makes 60 calls for me and 40 calls for you.emahler said:
60 x 500.00 = 30,000.00
40 x 500.00 = 20,000.00 + 300.00 =20300.00
60/5 = 10/3 = 4 techs
40/5 = 8/3 = 2.6 techs
20300/3 = 6766.66 per tech earned
30000/4 = 7500.00 per tech earned
Last edited:
big john
Senior Member
- Location
- Portland, ME
I've always thought this seemed like a good method of doing estimates. Maybe even telling the customer right up front: "We charge XYZ for an estimate alone, but will refund the estimate charge on completion of the work."Sparky555 said:
How many people use a system like that? How well does it work?
-John
So is advertising, insurance, licensing, code update classes.... but who pays for it? The customers you do get. When it comes to what it costs, is there any difference between "Free Estimate" and bidding a large job? You still do the work, scan the prints, do item counts, read the specs, get prices from the supply houses, etc. etc. But that's still no guarantee you'll get the job. You think everyone who bids a new school gets the contract?Sparky555 said:
Giving free estimates is not an automatic death knoll. Other factors may be to blame, such as not knowing their true costs of running a business....Sparky555 said:
Learn to shortcut. If it's a simple job, don't try to count every wire nut and every connector. Let's say it's a one-day job for two guys. You should know your overhead for the 2-person crew. Guesstimate the materials and add the two. Takes about 4 seconds. And usually can be done while the caller is still on the line.Sparky555 said:
Then take some sales classes. Learn to improve your closing skills. It's part of what you need to know and apply in order to survive out there these days.Sparky555 said:
"Free Estimate" ECs usually aren't the really big shops. They're pretty well established with an existing client base, and can keep busy with them. Not too many $100-million-plus builders look to build hospitals, nuclear power plants and shopping centers by looking in the yellow pages and looking for "Free Estimates!"Sparky555 said:
Rewire
Senior Member
- Location
- Lake of the Ozarks
I was just playing the numbers game to show you that with pure math I would be making an additional $734.00 per tech. All costs of the techs are deducted from the amount earned so by making more per tach I am making more profit.emahler said:
Rewire
Senior Member
- Location
- Lake of the Ozarks
this is how good I am even with the mistake my final tally was correct.I am not using the wrong # or immpossible% I am just not using unsubstantiated variables. What I gave you was a pure mathematical equation.emahler said:
tyha
Senior Member
- Location
- central nc
The problem I see it not your math but the fact that once you tell the customer you are charging a fee for an estimate it is going to take you 5 years to get 100 calls.
Dont take that the wrong way because that type of work is not part of our core business so my experience is limited but upon reading all the posts on the subject I do think it is worth some more examination. I would absolutely be in favor of charging some sort of fee based on that type of situation and then possibly crediting a partial or all back. But we all know that we not really giving anything back.
Dont take that the wrong way because that type of work is not part of our core business so my experience is limited but upon reading all the posts on the subject I do think it is worth some more examination. I would absolutely be in favor of charging some sort of fee based on that type of situation and then possibly crediting a partial or all back. But we all know that we not really giving anything back.
As a member of the free estimate club I would like to say, it's what I have to do to survive. Too many others offer it for me not too. However, I do enjoy the challenge of selling myself and I do a hell of a job! "Since I'm already hear and it's free are u sure u don't have anything else I could take a look at?" or "wow, that's a beautiful countertop...BS etc." This may not get u more work although it has gotten me quite a bit, but it gives u the chance to BUILD RAPPORT or a relationship and the more you talk and relate with ur customer, the more likely they will go with u (on average I spend 45 min with them, once I sat down and talked about conspiracys for three hours, haha, which only got me a $120 labor job, but he has called me once a month for the past 6 months with steady work). After I sell myself I give them two time options of when I can do the work and SHUT UP! This eliminates babble and 9 times out of 10 I get the job. Being an avid poker player and learning how to read people has helped me with this as well. Free estimate advertising will surely get u more calls than work, but if u know ur area codes u know when to do a phone quote, haha...ghetto...catch my drift. Its like fishing..."ITS ALL ABOUT THE PRESENTATION"
This applys to residential! Commercial jobs u should always charge and let them know it is reemberssed in the job b/c they are usually looking at the numbers (cheapest) and it tends to take me longer to estimate these.
This applys to residential! Commercial jobs u should always charge and let them know it is reemberssed in the job b/c they are usually looking at the numbers (cheapest) and it tends to take me longer to estimate these.
My numbers and experience have been similar to emahler's. I estimate my time and vehicle at over $100 per call, and my closing rate under 50% when responding to all calls, so I see those numbers as very conservative. When charging a dispatch fee my closing rate increased substantially. My average invoice has increased, but for now I'll call that due to special circumstances (two clients bought everything on the menu this year at $20,000 each). I don't always discount the dispatch fee, so that's an addition to the second set of figures.
The bottom line is my gross sales are similar with & without giving free bids. The most noticeable change is the time factor. At 2 hours each, those 50 bids I'm not running are 100 hours to do other things, some of which are billable.
Dave
The bottom line is my gross sales are similar with & without giving free bids. The most noticeable change is the time factor. At 2 hours each, those 50 bids I'm not running are 100 hours to do other things, some of which are billable.
Dave
lbwireman
Senior Member
- Location
- Long Beach, CA
Rewire said:
Amen, Brother. 30+ years in business and still standing.:smile:
lbwireman
Senior Member
- Location
- Long Beach, CA
Sparky555 said:
This sums up my philosophy re: "Free Estimates" nicely. We offer them but not for service calls, upgrades, retrofits, etc. Too many variables.
lbwireman said:
The typical time waster is the call, I am buying a home and i need an estimate for replacing the what ever, (pool wiring, feed to garage, or outbuilding), they want a free estimate, because they just want the estimate to get the money from the seller, they will either do the work themself after they move in or shop for the cheapest area hacker.
If you as for a small dispatch fee, you can filter out most of these calls, if they accept your estimate you will apply it to the work.
satcom said:
Bids for real estate closings are a big red flag, although I recently had a guy pay a dispatch fee for a bid on a service upgrade that he figured would be negotiated out of his selling price. All the years I ran real estate closing bids I might have got one job in 100.
Dave
weressl
Esteemed Member
emahler said:
Nope, you trying to deny the basic premise of free market enterprise.
Before I commit a couple of thou$ I would like to know what am I getting for my money. Since I (the average HO) do not have in-depth knowledge of what I am buying, I need to have some comparitive idea of what price range is reasonable. With the estimate, I would also ask for an explanation of what is going to be done.
So I think every honest businessmen would try to give me a fairly detailed explanation to make me comfortable with the offering, that I get value for my money.
Fair and open competititon is the essence of free market, the foundation of the US economy. Participation in this system is voluntary. If you don't like it feel free to move somewhere else, or introduce your own system. Wish you luck in that.No better system exist on the world, yet.
The concept of the buyer have to pay for the information of what he wants to buy seems utterly ridicoulus.
weressl said:
So...in this system you imagine I can call several Staff Engineers to look at my $2,000 project. I can also expect them to drive to my home with their own vehicle, and spend an hour discussing their qualifications and how they intend to engineer my project. Then I'll decide which Staff Engineer I want to hire.
Dave
Sparky555 said:
30 or $40 to cover a visit that costs $200 is a good deal, just about every contractor i call for an estimate had a charge, the roofer being the best example, they have to errect ladders and inspect the roof, after bringing the truck here, only one roofer offered free extimates, he had a beater truck with ladders missing rungs, and looked at the roof, from acroos the street, sears charged me $90 to look at the washer and give estimate, talking about a free market is nonsense, the practice of charging service fees is not a new trend.
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