Reasons For Not Giving Free Estimates

[emahler]

Why not just include the cost of doing your bid in your estimate and if you win the job thats great.

why not read the entire thread, and see the issues with this....

 

[tonyou812]

ive listened to both sides and I have definately come to a conclusion that I personally cant afford to do free estimates. I work alone so I can only do so much, I loose enough time working out bids at home, I hate going to someones home and waste time, How would you recover the time spent? I am planning to charge 95 to trouble shoot something hopefully no more than 1/2 hour - 45 min. And I like the idea of a 75- 100 dollar estimate that is given back if the bid is accepted.

 

[tmbrk]

I too have recently started charging for estimates. I should have started a long time ago.

Truth be told there is no such thing as a free estimate. Someone is going to pay for it somewhere down the line. The time and expense of going out and giving an estimate must be recovered one way or another. It's just plain math. You can either charge a fee upfront for each and every estimate or put it into your overhead and make only the people who accept your bid pay for it.

The idea that we lowly tradesmen somehow owe it to people to go out and help them with their home for free is not only wrong it's insulting.

 

[teco]

why not read the entire thread, and see the issues with this....

You know, you really don't have to be so wise with your remarks. You don't know me and I read the thread but maybe I missed something. I'm not perfect. I am just trying to give this person some input on how I have done it for 23 years. Isn't that what this forum is for?

 

[petersonra]

ive listened to both sides and I have definately come to a conclusion that I personally cant afford to do free estimates. I work alone so I can only do so much, I loose enough time working out bids at home, I hate going to someones home and waste time, How would you recover the time spent? I am planning to charge 95 to trouble shoot something hopefully no more than 1/2 hour - 45 min. And I like the idea of a 75- 100 dollar estimate that is given back if the bid is accepted.

How do you ever recover the $100 estimating fee if you only do a few hours work?

 

[aline]

None of them charged or even mentioned of charging for a 'bid'. Nor would I have paid for one, even if it is deducted from the final price.

Wether you realize it or not, if the contractor you hired is covering all of his expenses and making a profit, you not only paid for his time to give you an estimate but also for the time he spent giving 5 other "free" estimates he did not get.

So yes. You not only paid for one. You paid for six.

If a contractor only gets one in six estimates guess who pays for the other five?

 

[teco]

How do you ever recover the $100 estimating fee if you only do a few hours work?

I see what you mean. I can't speak for the residential market because I'm not in it . We only do commerical and industrial but I am well aware that none of the outfits I bid against charge for the estimate process. Its in the job as part of the overall estimate.

 

[tmbrk]

Wether you realize it or not, if the contractor you hired is covering all of his expenses and making a profit, you not only paid for his time to give you an estimate but also for the time he spent giving 5 other "free" estimates he did not get.

So yes. You not only paid for one. You paid for six.

If a contractor only gets one in six estimates guess who pays for the other five?

This is exactly the case. Someone is going to pay for it. Who can afford to work for free?

 

[Rewire]

unsubstantiated? there are thousands of contractors across the country who can substantiate it....patrick kennedy comes to mind....i believe his closing ratio went over 80 percent when he instituted a dispatch fee...

If I get 10 calls and give free estimates to all ten and only close 5 that is 50 % now you get 10 calls and only 5 want a charge so you do 5 calls close 3 thats 60% your closing rate looks better but I have 5 jobs and you only have three,if you look at it from the # of calls to the # of sales that would be 5 of 10 for me or 50% and 3 of ten for you or 30 %. I also heard of a device that could save you 25% on your electric,it is all in how you place the #s.

 

[aline]

If I get 10 calls and give free estimates to all ten and only close 5 that is 50 % now you get 10 calls and only 5 want a charge so you do 5 calls close 3 thats 60% your closing rate looks better but I have 5 jobs and you only have three,if you look at it from the # of calls to the # of sales that would be 5 of 10 for me or 50% and 3 of ten for you or 30 %. I also heard of a device that could save you 25% on your electric,it is all in how you place the #s.

While you're still out doing 10 free estimates, I've finished my 5 estimates, now I'm doing 5 more estimates and closing on 3 more so now I have been out giving 10 estimates, like you, but I got 6 jobs.

You went out and gave 10 free estimates and I went out and charged for 10 estimates. You got 5 jobs and I got 6.

If you look at it from the number of estimates to the number of sales that would be 6 of 10 for me and 5 of 10 for you.

 

[cadpoint]

Most of the calls of this type in our area are generated as the result of a home inspection. Typically, we're called by the buyer, seller or RE agent after a home inspection report has listed a number of "problems" (HVAC, electrical, plumbing, etc.). A few years ago we figured out a way to turn these "lemon" calls into lemonade. Since most of the home inspectors with whom we've come in contact have demonstrated a serious lack of knowledge of electrical practices, method, code or safety, (most of the reports I see have "corrections" listed that are not code violations, improper wiring method or safety issues, while missing things that are. When we get these calls, we offer to perform a review of the inspection report, survey of the property and provide a written report of findings with accompanying photos and code citations where appropriate and an estimate of the cost of making these corrections. We charge a reasonable fee for this service. Our experience has been that by the time we've finished the process, educating the customer all the while, the customer is sufficiently convinced of our professionalism and competence (not to mention the necessity of making the recommended corrections for reasons of safety, liability, convenience, etc.) that we, almost without exception, are hired to make the necessary corrections.

But what do you you do with the "just bad apples" ?

Great approach, great pitch ... Congrates !!!

 

[emahler]

While you're still out doing 10 free estimates, I've finished my 5 estimates, now I'm doing 5 more estimates and closing on 3 more so now I have been out giving 10 estimates, like you, but I got 6 jobs.

You went out and gave 10 free estimates and I went out and charged for 10 estimates. You got 5 jobs and I got 6.

If you look at it from the number of estimates to the number of sales that would be 6 of 10 for me and 5 of 10 for you.

and i'm doing it in less time, with less techs and lower operating expenses...

the gross looks pretty, but the bottom line is who puts out...

 

[emahler]

for the record, we do free estimates all the time...however, we call these quotes/bids...the average size of them is for projects in the $200,000 range...each one costs me about $500 in real money for the time to do the takeoff, shop prices, generate our pricing, visit the jobsite, etc...

the difference is, by the time I even begin spending time on these, the owner has already committed thousands of dollars in development fees to the engineers, architects, etc...in addition to the $150 they spend to fed-ex me a set of plans...

contrast this to the average residential job where there are no prints, just a lot of "we were thinking", and there is no real investment from the homeowner. They call 5 contractors and schedule them all to come out on Monday at 6pm (after they get home from work - don't want to inconvenience them)...and each contractor essentially designs the project for free, and gives them an apples to oranges price...

no thanks...

 

[cadpoint]

Originally Posted by Sparky555
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.

will you please stop letting facts get in the way of a good opinion....

There's alot of people that'd be happy to service that account, and yes I might have missed the related comment previously, sometimes its just business, frankly, I think, "my opinion" is that its fair for the thread!

If you want a professional then call them, why is someone calling anyone ?
Well usually cause there's a problem... maybe even a situation, what ever the underlining cause or effect might or might not be... "Tag your in the Game"

How one carries about their own business, well that's their business, NO ? ...

Someone mentioned earlier of other trades that gave away free esitimates. Are they Licensed ? :smile:

I Get IT ... 10-4 Dispatch

 

[boboelectric]

You just need to quit calling them estimates and start calling them "In Home Consultations" then charge $100.

Like these guys do.
http://www.bestbuy.com/site/olspage.jsp?id=pcmcat138100050026&type=category

I'll try that next month's ad

 

[tonyou812]

You could offer them a "complete system analysis" and give them info on how to cut their energy bills. Talk about dimmers, timers, solar, wind possibilities.
Sell them on energy efficient bulbs, you could even mail them a fancy looking service calculation spread sheet and all for a low low price of $295.00 . Maybe youll even get the work out of it.

 

[Sparky555]

I just got current on my closing rates for the year under my very limited free estimate system. I'm closing 80% of new clients & 85% of all clients. My average invoice has dropped to $1800 to give you a more accurate idea of the average ticket size for residential service. I estimate my free estimate cost at closer to $200, so a "free estimate" is over 10% of my average invoice. Often that would be the profit on the job & I'm getting too old to work at cost.

Dave

 

[Rewire]

for the record, we do free estimates all the time...however, we call these quotes/bids...the average size of them is for projects in the $200,000 range...each one costs me about $500 in real money for the time to do the takeoff, shop prices, generate our pricing, visit the jobsite, etc...

the difference is, by the time I even begin spending time on these, the owner has already committed thousands of dollars in development fees to the engineers, architects, etc...in addition to the $150 they spend to fed-ex me a set of plans...

contrast this to the average residential job where there are no prints, just a lot of "we were thinking", and there is no real investment from the homeowner. They call 5 contractors and schedule them all to come out on Monday at 6pm (after they get home from work - don't want to inconvenience them)...and each contractor essentially designs the project for free, and gives them an apples to oranges price...

no thanks...

One less contractor bidding in the market that I am in thank you very much. Not everyone is bidding 200,000.00 jobs my average job is closer to $2000.00 what I count on is everyone else wanting to be big shots and bid on the $200,000.00 jobs and leave me an open field for the $2000.00 jobs.I own this business and I stoped thinking like an hourly paid employee a long time ago, I draw a salary every week wether I am typing on this forum or out looking at will probably be our next $2000.00 job, my job is to keep six guys busy and I do that buy bidding every job that I get called to look at.

 

[emahler]

One less contractor bidding in the market that I am in thank you very much. Not everyone is bidding 200,000.00 jobs my average job is closer to $2000.00 what I count on is everyone else wanting to be big shots and bid on the $200,000.00 jobs and leave me an open field for the $2000.00 jobs.I own this business and I stoped thinking like an hourly paid employee a long time ago, I draw a salary every week wether I am typing on this forum or out looking at will probably be our next $2000.00 job, my job is to keep six guys busy and I do that buy bidding every job that I get called to look at.

ya just don't get it....

 

[Rewire]

ya just don't get it....

I do "get it" I just dont get flashy with it.