How to charge for your quotes

Your clients want an accurate quotation for their renovation. They want to know how much it is going to cost. And rightly so! However, they have no idea how much of your time and expertise it actually costs to get everything together for their quote. What’s more, many builders don’t know how much it costs them either! In this article, business coach Graeme Owen explains how you can capture and charge the time you take to prepare quotes  

Many clients perceive quotes as simple, quick estimates that you can provide by simply taking a walk-through. After all, you are a builder – you of all people should know! In reality, creating a comprehensive quote involves significant time, expertise and resources. You need to make site visits, determine the scope of work, and guess what lies behind the surface of the existing structure.  Then you need to source materials and estimate labour costs.

The average builder puts a substantial effort into this process, but rarely includes it in the cost of the project. This hidden cost, if left uncompensated, can seriously impact the overall profitability and sustainability of your business. So, to address this, you need to charge out the time you spend preparing quotations. But how to do so? Here are eight things you can do.

1. Change the perception

One reason your clients expect you to provide a free quotation is because that’s what tradespeople do! However, they don’t expect professionals, such as their accountant, lawyer or architect, to do the same. Your clients expect these professionals to charge from the first phone call, even if just for a few minutes! So, become a professional! Quit thinking of yourself as a builder. Rather, reinvent yourself as a professional building advisor. When you do so, you will be able to charge for the time you spend providing your clients with professional advice. That’s what a quotation is really – costing advice on, say, a renovation proposal.

Check out all the ways in which you currently show your client that you are a tradesperson and make the changes necessary, so they see you as a professional building advisor. Sharpen up your appearance, improve your sales tools, clean up your vehicle and work on your sales script!

2.  Educate your clients  

No one else will. So, it’s up to you to teach them! Make clients aware of the time, expertise and resources required to prepare a comprehensive and accurate project proposal. Highlight the benefits of a detailed quotation, such as better project planning and cost transparency, and show how your preliminary work can minimise the risk of unexpected expenses. Put all of this together into a project planning brochure and hand it to them during your first meeting. Additionally, you could create blogs or videos that explain the quotation process and show the value of a thorough project proposal.

3. Offer a free initial consultation

In spite of what I’ve said above, it’s always a good idea to provide a free initial consultation. In it, you can introduce yourself fully and discuss your client’s needs. You can assess the project scope and demonstrate your expertise. Use this meeting to build trust and showcase your professionalism.  

Explain that this initial consultation is complimentary and that any further professional advice (such as preparing a detailed, written pricing plan or structure) requires significant effort and will be charged accordingly.  

At the end of your complimentary consultation, ask your client if they would like to proceed to the next step. 

4. Introduce your quotation fee structure

If your client agrees to proceed, then outline the next steps. Explain what you will need to do, such as site visits, the introduction of subcontractors to the project, work with designers and architects, development of materials schedules and contacting suppliers, detailed planning and calculating labour requirements. 

Then, develop a fee structure based on the project size and complexity. Remember to clearly outline what the fee covers in each case. You may want to prepare a template of fee structures for typical projects, such as a typical bathroom renovation.  

Remember, do not leave your first meeting without gaining agreement on your fee before doing any quoting.

5. Gift your quotation fees  

As an incentive, you may offer to deduct the quotation fee from the final project cost if the client proceeds to build with you. This can incentivise your client to commit to your business, while ensuring that your time spent on the quote is, at least, compensated.

6. Provide a detailed quotation

As well as ensuring that your quotation is professionally presented, ensure that it includes a detailed scope of work – the more detailed, the better. Remember: most clients know nothing about building. Show project timelines and details of costs.  

This level of detail not only justifies the fee but also sets clear expectations for the project. Investing in good digital tools will help you here.

7. Highlight your expertise and experience 

Use your marketing materials, your website and your client interactions to emphasise your experience, qualifications and the quality of your workmanship.  

Some builders use a folder (digital or hard copy) to showcase previous successful projects that are similar to the client’s plans. Doing this will raise your client’s confidence in you,  especially if you can show previous jobs where finished costs were in line with your quotation.

8. Use a contract for quotation services 

Develop a short agreement specifically for quotation services as detailed above. This document should outline the scope of the quotation work, the fee and the terms of payment. As above, ensure that clients sign this agreement before you begin the quotation process.  

Implementing these strategies can help you transition to charging for the time you spend on preparing quotations and being fairly compensated for your expertise and effort.

 

Graeme Owen is a builders’ business coach at thesuccessfulbuilder.com. Since 2006, he has helped builders throughout New Zealand get off the tools, make decent money, and get more time in their lives. Grab a copy of his free book: The 15 Minute Sales Call Guaranteed To Increase Your Conversion Rate or join Trademates and connect with builders who are scaling too.