Mastering the Estimate
A “Free Estimate” isn’t really free. When you provide a free estimate to a customer, your time costs money to your business. The resources you use to visit that prospective client aren’t free. It’s an investment in earning that customer’s business.
Do you offer free estimates or consultations? Have you been burned by prospective customers who won’t show respect for your time with so much as a ‘thank you’?
People often fail to understand that when a contractor takes the time to inspect a problem for them, then write a proposal to fix the issue – it adds to the business’ cost to fix the customer’s problem. This can present a problem for small business owners.
This week, I’d like to offer a few options to curb the actual cost of the ‘free estimate’:
1. Pre-qualify on the phone when someone is requesting your services.
2. Set your expectations up front, what you will do, the time it will take.
3. Charge for an estimate and what is an acceptable estimate fee.
4. Offer a refund on the estimate fee if they accept your bid.
4. Keep them committed without giving everything away.
As an example, imagine that you own a home remodeling company: Before you do anything, ask how many bids they are getting and what their selection process looks like. Before you agree to provide an estimate, factor in the time it will take for you and your business. You also need to know how you are going to recoup your cost. Keep that extra cost in mind when you’re writing the bid to make sure that you are paid for your work.
You must gain a clear understanding of what the customer needs before you try to sell them on a product or service. Interview the client, that first consultation should be you learning about their needs. It is vital that you understand their point of view. Before putting any work into the bid, you need to do an honest analysis and be willing to walk away if your services aren’t a good ‘fit’.
Take the time to evaluate your bid processes. Protect yourself and your business from giving too much away without any commitment.
Remember to tune in to Wright Stuff Radio Saturdays at 2, for tips on how to better your small business!