The Truth About Free Estimates
It’s not uncommon to see remodelers advertise free estimates as part of their marketing. Many contractors see this as a way to generate leads and build trust with potential clients, especially in more competitive areas.
Still, many seasoned contractors refuse to give out free estimates. Here are some of the reasons why.
Time & Expertise
Writing up an accurate, detailed estimate can take hours even for smaller jobs. From the site visit, to reviewing plans and determining material + labor costs, estimating a job can be time consuming and labor intensive.
Your skills, expertise and experience aren’t free. Your time is valuable, and working unpaid hours adds up over time. Plus, your profit margins will take a hit if you’re only winning a small percentage of the jobs you spend these hours bidding.
"A free quote can actually cost a business more than $200 "
According to Freshbooks, “a free quote can actually cost a business more than $200,” especially for larger projects. See the full article on free estimates from Freshbooks here.
Reaching the Right Clients
Some contractors find that giving away a free estimate draws in the wrong kind of client.
We’ve all heard tales of homeowners who request multiple quotes from different contractors, prioritizing price over the quality of the workmanship. Handing these types of clients a highly detailed estimate comes with risks.
Some clients could take your work and shop it around to other contractors looking for a cheaper price, while others may nitpick the estimate and negotiate each line item. Some may even use your estimate to purchase the materials themselves, which can cut into your profit.
Seek out clients who value your time and the quality of your workmanship. These kinds of clients won’t mind paying for your time, if it means the work will be done right.
“Free only attracts people who are looking for something for nothing ”
"Free only attracts people who are looking for something for nothing," According to markupandprofit.com’s Michael Stone.
“That's not why you're in business. You're in business to provide a service and make a profit doing it. If anybody tries to derail that, walk away from them,” Michael says.
Michael breaks down the concept of free estimates in our Calculating your Markup webinar, see the full presentation from Michael Stone here.
Paid Consultations
At the end of the day, you don’t want to spend more of your energy writing free quotes than closing on bids. This cuts into your time and profit.
It takes time and energy to visit the client’s home, measure, draw up plans, review options and compare costs. Charging for the work and time spent in this process makes sense.
Some contractors actually build a consultation fee or pre-construction planning costs into their price. This covers the time and energy spent on design, planning and writing up the scope of work.
Other contractors may even offer a credit towards the consultation fee should the client move forward with the project.
The Bottom Line
For certain smaller jobs, some contractors have success offering free consultations or ballparking a preliminary quote for a potential client. Some remodelers see this as a branding strategy that can help build their reputation with leads.
That said, larger projects requiring detailed estimates may cost you more in the long run if you’re giving these out for free.
Next Steps
Clear Estimates saves countless hours on estimates. You can easily create a detailed quote with a lump sum total, inclusive of your markup. This avoids clients shopping your estimate around, while still being detailed and professional.
Plus, with a variety of report options, you can include line item costing or even export detailed breakdowns of your project costs.
With time saving features like saving projects as templates and electronic invoicing, you can streamline your bidding process and spend your time focusing on the project itself.
