Free estimates, I think they’re dumb!
The arguments for free estimates has been around forever:
Buyers expect them- my competition gives them- its good for business- its ridiculous to charge for them- no one will pay for an estimate- its the cost of doing business- my Mother told me to give free estimates, these and any argument you would like to dream up are reasons to give free estimates but, are these really good reasons?
This week I got 4 calls………
Starting on Monday I got 4 contacts for quotes from my website , I think that’s pretty good and on a positive note I called them all back.
1. Whole house remodel for a rehab loan project 40 miles away. I told the homeowner I would give a clear and concise quote for $200, he said he already had gotten 2 free quotes and figured he would get a few more. “Oh, thank you for that” I was thinking!
2. Second call was a small kitchen which I ball parked over the phone and they will think about it. I consider this one closed.
3. A kitchen that I visited for free, this ended up turning into a $30,000 to $40,000 plus kitchen gut and remodel. They had a kitchen layout from Home Depot which I took and I will give them a target budget and scope of work and if they are interested I will have them sign a design agreement for $500 and I’m going to sell this job.
4. Another rehab for probably $60,000 worth of work. Told this contact I charge $200 for a quote, she agreed it was a reasonable fee but the night before we are to meet her husband calls and cancels our appointment saying “We are all set thank you”. I’m guessing this guy thinks “FREE” is better than accurate.
That’s this past week and I’m glad I qualify and charge for visits. Let the other companies fight over the scraps.
In the last 2 weeks I have been paid $200 per visit for 3 people. I won’t get rich on $200 estimates but at least I am not driving around desperately hoping my professional bids aren’t being compared to the 4 line bid that says something like “Remodel Kitchen to include cabinets, flooring, countertop and sink $15,000.
Who pays for free?
The people that hire us pay for all the free bids we give out, they just don’t think about that, don’t want to think about that. Maybe we should give this free estimate business some thought. We are still one of the few professions I know that spend time and money to understand and sell a complex service and then turn around and offer our services for free. Maybe one problem is anyone with a pulse and cell phone can go into business with little to no accountability, hell, after all the years I have been in business and the thousands of hours I spent honing my craft I still run into people who think they could do exactly what I do after watching an episode of “Flip this House” or simply just Googling something like installing crown molding.
Ain’t goin ta happen!
Free bids are embedded in our culture and although they don’t make sense for a business as far as profits go they are expected and for now were probably stuck giving out the silly things, but some of us just won’t accept this foolishness and we charge for our time. Maybe a shift to understanding buyers might help our industry move from this pointless exercise.
A little story
I got a call a year ago from a woman who had called Home Depot to come out and measure for new kitchen cabinets. she angrily told me Home Depot had the nerve to tell her there would be a $99 fee to have a designer come out and measure, she was no fool as she knew estimates are always free, she was upset because she thought Home Depot was trying to rip her off. I simply told her I was booked out for the next 6 months, she sounded dissappointed but probably figured I was busy giving free estimates. After I got this conversation I was more determined than ever to get paid for my time.
Do I still give free estimates?
Yes, for smaller jobs, jobs that are close by, people that have a voice or demeanor I like. For line item bids I charge and unless this puts me out of business I have no intention of competing with the free bid companies.
Who gives free bids?
Mostly all contractors do in some form or another but unless your going for a one shot close like roofing, siding, windows and other one trade services I feel you should be getting paid for putting a project together. I used to think no one will pay for a quote and that turned out to be a false assumption, if your eager to be free buyers will pick up on it and you have somewhat reduced yourself to a price qualified service, and when you go down that road your going to have a hard time leaving it. Life is better for me because I strongly qualify and never sound eager, there is a world of difference between interested and eager, be strong and proudly believe your knowledge and time are special and worth a fee.
Next week I will offer alternatives to free bids other contractors find useful.
Paul LesieurTags: cost, estimating, pricing