It’s Time to Stop Estimating for Free

The pressure to give free estimates is something that remodelers and custom home builders like you feel daily. Homeowners have this "built-in" notion that you should be providing free detailed estimates?as they believe 'it's the cost of doing business.'?

They expect that you'll get on a phone call with them and divulge an accurate fixed price for their home improvement project in 10-15 minutes. They figure that experienced contractors should know this.?

Since that practice has been the norm for so long in the remodeling industry, it can be hard to switch to a "paid estimate" mindset. This is true both for you as a professional remodeler and for your prospective client. It's also challenging when it seems like you need to do it to remain "competitive" in your market.?

But deciding that you are not going to provide free detailed estimates for every potential client is a great way to make your competition irrelevant and weed out the tire kickers.

The Problem

The problem is that most prospective clients aren't aware of this. Because they think they should just be looking for a remodeler/custom home builder to do the job for the price, they deem appropriate. This is based either on their available budget or?their (often uneducated) opinion of what home improvement projects cost.??

They expect that you - a professional business owner - will drop everything and race over to their home, talk with them for hours, and provide detailed estimates: for free.?This is your valuable time that you agree to devalue if you participate in this.

What a homeowner is thinking:

• My remodel outweighs your valuable time
• I'm using you as a measuring stick against other general contractors numbers I've heard
• This is entirely normal as remodelers and custom home builders should do this job site visit for free

The Reality

An accurate price for a remodel is way more than just a few numbers on a page.?It's hours of planning, researching, having conversations with clients, trades and designers to establish more than just a ballpark of what this remodel will cost. That time spent pricing a remodel could represent anywhere from a couple of hours to a couple of days of work. That's a lot of time that you're directing away from other paying projects.

And for what? To be judged based on your price against someone else who took 30 minutes to throw some numbers on a page? Because here is the truth:?You are not going to win the right projects for the right prospective clients if you're competing on price instead of working collaboratively towards what the remodel actually costs.

Your time, your knowledge and your expertise are valuable, and you should be paid for it just like design work.

You Are A Professional Business Owner

There is an inherent expectation from many homeowners that a remodeler or custom home builder will spend hours or even days doing valuable work - and not charge for it.?

But let me ask you this...

• Do Dentists give free check-ups?
• Do Lawyers give you legal advice for free?
• Do Accountants do your taxes for free?

If you went to a dentist who was doing a filling for free, how much effort and attention to detail do you think they would employ? Homeowners are like you and me, and?we only value what we pay for.?This is a lesson as old as time and an essential part of building a proper sales process for any remodeler, general contractor, or custom home builder.

Four Key Reasons

The first step in changing the narrative for you and your prospective clients is to convince yourself that you will not provide detailed estimates for free any longer. Let's look at four key reasons why this is the way you should be thinking.

Scope Of Work

I've spent 21+ years in this industry working on every size project out there (seriously, from one-off smaller jobs like kitchen remodels up to 25,000 sq. ft. "leisure" homes). Here's what I've learned: When we don't develop a detailed scope of work, then?it's never an apple to apple comparison.

You might hear from architects and designers that "everything is in the drawings." Sigh. We know this isn't the case as there can often be a lot of information. Still, the finer details are often missing. Those finer details help you determine a price range your prospective client should expect.

The types of details that deal with the sequence of operations, the items involved in preparing and maintaining the site and the people working within it. This type of detail takes a ballpark to a detailed estimate with an accurate fixed price based on the scope of work. As a side note, this is where operating in a design-build model can be very helpful in streamlining the design work, planning, and building process.

How Much Time Did The Other Remodeler Spend Pricing?

Like we discussed a moment ago, you might spend hours or even days working through a complex set of plans for a large build. That is a lot of time.?But have you stopped to think about how much time someone else you are "competing" against has spent determining their "accurate price"?

All of this valuable time is for not because you will look expensive next to someone else's price range who spent a lot less time preparing their 'accurate price.'

A client is judging you on price without the insight into what goes into a detailed estimate. When we don't have them pay for a proper process to go through and cost everything correctly,?their "evaluation" is as good as throwing darts against a wall.??Remember, pricing is based upon the scope of work, and building an accurate scope of work takes a lot of time, even for smaller jobs.

Please Don't Start The Relationship For Free (people value what they pay for)

Have you ever wondered why potential customers who turn into clients say things like this during the construction process:

"While you're here, would you mind doing _________?"

And of course, they are asking if you'll do this for free because "you're already there."

It comes down to this.?If you start the relationship with something for free - like building out their scope of work, then this will telegraph through the build process.?People like you and me only value the things they pay for.

Think about something you download for free. Do you find that it has the same amount of value to you as something you pay for? I can tell you that I've downloaded a ton of e-books that I've never read, yet, the books I buy - I read.

Suppose you start the relationship for free (like giving them a detailed estimate/feasibility study). In that case, you are giving your prospective client a signal that you will accept this.?You will continue to receive what you tolerate, so don't tolerate this in your contracting business.

You're Putting A Potential Client At A Disadvantage

There is an immense amount of awful information out there through mass media (TV, radio, the internet, etc.) telling homeowners what their remodel should cost.

And most of it is wrong.

Yet, you bear the brunt of trying to explain to a homeowner in the "bidding" phase of a project WHY HGTV or Uncle Bob's "accurate price" assessment isn't so accurate.

If you are doing free estimates, you are competing on price - and this is a race to the bottom.?

And when you do this, you are forcing a potential client to make an uninformed decision based on a number and nothing to do with the project's accurate price. And to compound this, a potential client also uses the remodelers mark-up as a selection criterion instead of the actual scope of work.?

Yet, by participating in a traditional bidding process, you are perpetuating this very broken system. It forces clients to make bad decisions that they WILL pay for - either now or in the future (most likely, the future).

Next Steps

Are you convinced yet? I certainly hope so.?

But I get it; it can be scary to move our mindset to a paid model. After all, the remodeling industry is full of competing general contractors doing this work for free.?

The reality is that it is critical to developing your contracting business - and a KEY DIFFERENTIATOR.?

It's key to develop a process for HOW to take a client through the steps of design work, build the proper scope of work, and determine the accurate price for the home improvement project.

It is a process that respects the homeowner's budget during the design process?and NOT treating the cost as an afterthought. Far too often with the traditional model, we see this inverted, leaving a homeowner with bad advice from design professionals. And so the homeowner now takes their overbuilt set of plans and has remodelers, and custom builders compete against each other until the client hears the number they want to hear.

This is the change that needs to happen in the remodeling industry and for your contracting business's health and growth as a professional business owner.?

If you want to learn more about HOW to get started with charging for your estimates, then check out this FREE 3-part training here>>