The Process

[Guest]

I started a thread here for "The Process" since it looks like there are a number of people interested in it.
We received Sonny's "Process" about 3 years ago and have been using it ever since! THANK YOU SONNY! It explains very simply that there is a process that goes into a project. We modified it to fit our company and it's been very successful.

How we use it and what we have learned....
1. The process is part of our initial sales package that goes out to every client we have scheduled an initial meeting with. We do explain our process on the phone as part of our pre-qualifying. (It's important that the potential client knows that there is a process and that you will have fees after the initial meeting)
2. Using the process and living by it required a change in the way we do business. Change is hard but worth it.
3. Clients appreciate the fact that we get rid of the cloudy gray areas that surround the mystery of remodeling. Face it most peoples reality of remodeling is no experience, a bad experience or someone elses horror story of their experience.
4. Positioning ourself as "different" and providing a process that is more tangible than any other contractor will present sets us apart from the "pick up truck guy".

Part of the Process was charging for proposals, design and other consultive work. I will admit that was the toughest change of all. Once we realized our enemy was us, we easily get paid for our design and costing time.

Our enemy is us.......When we didn't believe we could sell the extra services.... WE COULDN"T
When we elevated our own thinking to realize our "professional services" were worth the fee and didn't back down, it happened quite easily.

When we started with the process and fees no one here was doing that. Amazing now 3 years later many of our peers are doing just that. Now we have to figure out new ways to differentiate ourselves from the competition. But that's ok because now we are going against many "professionals" who employ fee based consulting (design, specs, costs etc) . Which means we are all playing in the same ballpark by the same rules. (fee for services, professional rates and mark up etc.)

With the initial meeting only including a Ballpark range of costs, the client then is determining who they can easily work with, who will fit thier vision for the project and possibly schedule availability. The price has been removed for the most part from the equation when all are using the same type of system.

We do still run up against the pick up truck guys. but it seems less and less these days in our area.

Have a great day! Take good care!
Candi

[Guest]

Re: The Process

There is also one other caveat using "The Process" and that is after sending it out, either by regular mail or email, it eliminates some people from continuing their quest for the proverbial free estimate and free consultation which is just picking the contractors brain. I have found that after a potential client reads the Process, they understand that they will receive limited advice and costing UNTIL they are ready to commit to some form of compensation for my time. The Process does not eliminate the possibility of a free site visit and/or consultation, but it establishes the awareness that we are in business to make money, just like any doctor, or architect, or body shop, or any business for that matter which sells a product expecting to make a profit on selling that item.
What this accomplishes is that the tirekickers are limited in what they can, if we want to allow it, receive in the amount of time and effort we dispense for nothing. This is not to scare away new business, but rather to control your own business and establish a reasonable compensation for a work week that could go on for many unpaid hours if left untethered.

If after reading the Process they don't call back or set up a meeting or even call back and cancel, you have gained valuable time for yourself, your business and your family.

Jim

[Guest]

Re: The Process

Jim...
You are absolutely correct in that some folks are not willing to pay a professional and will back down after recieving the information. I will say of all the CSA's we have signed in 3 years, only 3 have not built the anticipated project. 2 were due stock market issues (the money for the project) and one was because the decided to over design the project and didn't want to concede some of the elements that would have brought the project within reach of the original budget and scope of work.
Not to bad for 3 years.

You do have to be willing to let some of those walk away due to the "free" mentality. But if you count up all the hours you do free estimates and design now and then look at the extra time you have to concentrate on "truly interested" clients your projects are much more fun to do.

Take good care
Candi

[Guest]

Re: The Process

About this idea of sending out some information to a potential customer after you have talked to them on the phone-how long after you have an initial contact with a person is it before you would meet with them? I have fought with this issue and feel it is almost as important as how long it takes you to get back to those who call you. I try to answer my phone calls within 48 hours tops but it does not always happen. I try to take some time off and do have family and other obligations that sometimes prevent me from doing that. I have had potential clients seem to be amazed that I cannot come talk with them the next day or so. Seems like some of them have made their mind up and want it now. I guess what I am wondering is if they call you, you have a prequallifying conversation, then you send out the process, they respond back-what are you talking about-7-10 days before you would schedule a meeting? I noticed Jim said something about e-mail which would be faster.
I was also wondering about just how to charge for some of the smaller job estimates. I usually can get 6 to 10 jobs a year that are just painting one room in the house. These usually come from people I have worked for in the past. I can look at that type of job in about 20 minutes and give them an estimate right on the spot which they usually accept or reject right on the spot. I usually include something extra for my time as I think of how long it will take me to do the job. For those that do not want me to do the job I lost my time. So how do you handle those smaller jobs like that? Flat rate of $50.oo to look at any work? and let the customer know that before you come over. I understand from the Porcess about the time it takes to do a bid for a larger job and wanting to be compensated for it. I am beginning to do that on my larger jobs but have not been able to do that for the smaller jobs-say $1000.00 or less. I know that some of you have to run into those smaller jobs so how do you handle it?
As I said elsewhere, I have modified the process for my use and it has helped answer some questions from folks. I guess the other thing that I seem to not have too much trouble with is getting the job. Last year 90% of what we bid we got. I know that I could have made some money off of some of those we did not get by charging for the estimate but I did not charge. Some of the jobs I did not get because of time factors on either parties. Some were because of price. Give me some advice on how to handle this please.

[Guest]

Re: The Process

Beezo:

If you are getting 90% of your jobs, your prices are way too low, or you're a fantastic salesman. I've heard that you should increase prices incrementally until your closing rate drops below 50%. High pressure siding, window and roofing companies raise prices if their salesmen's closing rates exceed 10%! More money -- Less work -- More time with your family, or just plain having fun.

[Guest]

Re: The Process

Dick,

I don't believe that to be true about the 10% closing ratio with "high pressure siding, window, and roofing companies". Stick with giving advice on things you know.

Hopeful

[Guest]

Re: The Process

Beezo,
On your package question...
We contact the client within 24 hours & usually spend 10-30 min on the phone with the pre-qualifying questions and explaining our process and why it's beneficial to them. This typically gives us enough info to let us know if it's a project that is a good fit for both of us.

Once it's decided that we want to meet with this client, we set up an appointment with them no less than 5 days out (and only Mon-Fri 7:30-4:00) so there is time for the positioning package to get to them. The package is sent after the initial meeting is set up with them and includes confirmation of our meeting date and time, references, insurance, license etc. The lag time in meeting with them gives them time to look at the package and also shows that we aren't just waiting around for the next job to come in. If they are too impatient to wait 5 days to meet us during our scheduled times, it's likely not a good fit for either of us!Learning to let some of those pain in the butt jobs slip away is one of the good things we have learned.

As for your small job question...
May not be much help there since we have given up small projects and repairs unless they are for an existing client. We do not charge for the repair proposal for an existing client when we know they are going to use us. If it's not a repair or small job we want to do we refer them to our network of subs that will do a great job for them. Painting is one of those things we would never take on. But are glad to refer them to our great painter friend. If they are not an existing client then we usually pass on the small project or repair project at the beginning.

For folks that are looking for insurance work prices we have a fee to do the proposal. Minimum $100. (most won't pay it)

We also have a fee for real estate companies looking to use our expertise for the sale of a home. Flat rate $250 to provide a basic list of items needed and the costs associated with that.

Have to say we don't do much of either of the above because most are looking for FREE information and will not be doing the work. Secondly we don't publicize these, its just something we have in our tool box when the call comes in.

I agree that if you are getting 90% of your jobs you are a super salesman or you need to raise your prices!

Take good care
Candi

[Guest]

Re: The Process

Beezo
There is absolutely nothing wrong with providing services to previous clients without charge. But the type of service related to the type of project should reflect the possibility of charging for your time. In other words, small jobs because we only work with you is part of repeat business, but would you keep doing estimates for projects that don't happen? We can't keep providing the guidance and information continually and not get paid for our efforts. You need to selectively implement getting paid for your time with previous clients. When referred to a new client by a past one, on the phone you should determine the viability of their proceeding with the project. If its a small one, I suggest you cap where its free versus getting paid. IF you also want these smaller jobs, again you need to decide a cut-off point for your efforts. The small jobs may be a service, but in most cases not a moneymaker! This is not a diatribe against the handyman service market; they chose it and that is there nitche.

The following is long, sorry. But watch how easy it gets carried away!

Here's an example of getting paid, well sort of. This particuliar instance was the value of my time I needed to see to decide not to arbitrarely give the farm away. I did a complete kitchen remodel for a client. My anticipation was the client from hell, but we actually developed a very nice working relationship. Four months later, she called and needed an adjustment on a cabinet and we went out two days later and took care of it. She eventually divorced, and bought a smaller home. She was interested in replacing the front door, so we did a site visit which turned out to be "what if I also redo the kitchen?", and "what about salvaging the enclosed porch"? After almost two hours, I got out of there knowing that the ex-husband's brother-in-law was going to be doing a few of the "little" repairs. We didn't do any of the work, although we supplied a few numbers. Six months later she was looking at buying another home, very close to mine, so being a glutton for punishment, I met her along with my electrician and her realtor to review values for work necessary for her negotiating to buy. Having learned a little bit, I went with a laptop and plugged in numbers and supplied verbally answers to her questions. Time for this one was 30-45 minutes. She did not buy the house, so she calls me again a month later and wants to discuss adding a small bathroom upstairs along with an open walkway across the cathedral style living room to connect the segmented upstairs areas. This is how the situation went.
1. She calls, we talk and I send her "The Process"
She had informed me that the abilities of the proverbial brother-in-law were inadequate for this idea.
2. She calls again to set up a meeting. We briefly discuss again what she thinks she wants to do. Having determined that she indeed had read the process, I started to explain the potential costs involved to review and develop this project.
3. Suddenly, it dawns on her that I want to be paid for consulting. "BUT DON'T YOU GIVE FREE ESTIMATES?" I said I do, but what was I estimating? "But I don't know if I want to do it until you tell me what I can do and how much it will cost". I gently inform her that I get paid a fee to consult, design and estimate projects that have no documentation to substantiate themselves. How can I price something that has not been established? "But that is why I want you to tell me what to do". We went round and round because she didn't want to pay for something she perceived as "FREE", and I perceived as giving up all the info for nothing. We did not get together this time because I chose not to give away the farm. I ended the conversation suggesting she determine her project and pay someone to outline it. She was not very happy!

Because I already knew the interior layout of her home from a previous visit, after she first called I started thinking about her project and its viability. Think about this; She already took more time from me because I mentally was preparing myself for another meeting. Structural ideas, open railings, relocate that closet, etc. I was already dead in the water because I wound up spending perhaps another hour of my time sending out the process, phone calls, and thinking about the "potential" project. I had already given it away, again!

This is the type of situation in our business that has perpetuated itself for years because "That's how it always has been done!". This also has to stop if we are to be reviewed as "Professionals" who get paid for what they do and know. We need to establish ideals if we are going to be respected. Think about the scenario above. It covers repeat business, servicing the client, providing services available for fees, and also covers good will; but who really benefited? My choices to provide free services were abused, not respected. Nobody paid me yet they still expected me to return for more! The above helped me implement and reduce the amount of give-aways I used to do. I don't care if its a site visit charge of $75.00 I deserve to receive compensation for my time and knowledge.

The choice is mine and I chose how to run my business in some manner of profitability>

Jim

Jim

[Guest]

Re: The Process

¿My choices to provide free services were abused, not respected."

One more time:

MY CHOICES TO PROVIDE SERVICES WERE ABUSED, NOT RESPECTED.

Yep, it's a daily occurence and has been for centuries. Whose fault? Ours. Time to change the status quo - I say.

I don't charge for an SCA either when I know they just want me to do it and bill them - just the trip charge. Did one today, broken adjustable cabinet hinge. Two trips: One to determine the hinge type (took 5 different types to save trip #2 - didn't work), and trip two to replace all three hinges (their suggestion) on a tall pantry cabinet door. Invoice for $218 and they couldn't than me enough, especially since I also adjusted their refrigerator door.

Both trips totaled 2.5 hours including obtaining the hinges & travel time.

[Guest]

Re: The Process

I agree that my prices are too low and have voeted myself a raise this year. I still seem to get al most all my jobs. In fact so far this year even after voting myself a raise I have not missed a job that I have bid on. I am thinking I am still too low. It is early in the year tho. All my business right now is referalls from other customers. My work includes some handyman work like a toilet flapper replacement or window glass replacement to about 4 or 5 bathroom remodels and a couple of kitchen remodels plus 6 to 10 complete house paint jobs. I continue to do some of the handyman jobs for past customers as well as for some new customers as a way to get my foot in the door. I am on my 4th bathroom remodel for one family that started out as installing some motion detector lights on their garage. Most of my jobs that I do I am not competing with anyone else for the job. I am not really that much of a salesman. In fact I probably would not make it as a salesman because I detest those who pressure you or insist on telling you some story like the manager is out of town today or I am giving up my commission just so I won't get fired. What a bundh of junk! Yet people fall for it. I know that I am in a differnt niche than many who send things in here but I am a contractor with a different niche. when I say I am doing a bathroom or kitchen remodel only on two of those last year did they involve moving any walls. Most of the ones I do we are gutting them, and everything goes in new but the footprint of the room stays the same. I have yet to get a job where a kitchen remodel doubles the size of the house. Actually I am not sure I would feel confident enough to sell myself to the clients as the person to do that type of work.

Jim, I too have a customer that has done just the same thing to me. In fact she is a personal friend and has a habit of almost every spring wanting a house painting job or a fence built or a new deck. She calls me, I have gone and looked. I send a bid and some simple drawings, go by the house 3 months later and there is a new deck. After a couple of those things happened to me I told her when she called that I was not interested in bidding her work anymore. She understood and told me she was doing just what every magizine article says-"get three or more bids and compare them. Many contractores will give you a free bid." To which I responded that I would no longer give her a free bid on anymore work. As far as being a service to my customers I have taken the stance of most service related companies and charge about double my normal rate for the first hour for small jobs.

I think that the best thing about the Process is that it is part of the communication game that is so important in this business. If it gets them to start thinking about us as professionals so much the better. I have used it with some of my smaller jobs as a way to look professional and to help explain some of the steps that go into doing their jobs.

Candi, you also said that you spend 10-30 minutes on the phone prequalifying a prospect. I assume that you never get reimbusrsed for that time unless you build it into something later on. I spend a little less time on the phone often but will spend 30 minutes at their home talking to them about what it is that they want. I am not being compensated for that time either but am beginning to charge for estimating and drawings if they are needed. i also know what you mean about them thinking you are waiting for the next job. This winter I had the flu, stayed home one day. The phone rings I answer it and the lady wanted me to come over that afternoon to look at work since I was home and had nothing else to do. Must have been the medicine cuz I just grunted out something like I will take your number and get back to you later. I have also not had any insurance or real estate bids since I have just begun to have a stock answer for thier wanting me to look at things for them.

Thanks for the input.

[Guest]

Re: The Process

I learn more and more each time I read these forums, thanks guys and gals. Sonny could you please explain how I can get a copy of your process.

[Guest]

Re: The Process

Supposedly you can down load a copy of "The Process" at:
http://www.jlconline.com/jlc/archive/business_computers/charging_estimates/

I tried, but I keep getting the home page. Would also like to have a copy. Is there a down load for this form somewhere on this site?

[Guest]

Re: The Process

The Process was originally intended for use for The Lykos Group, Inc., when I worked with my sons.

During the next few weeks I intend to modify it, maybe make it a little shorter yet also add a couple of thoughts that I think are important additions Anyway, the modified version will be more generic so it will be easier to adapt to each persons particluar operation. When done, I'll set up a download on my free site in Comcast for anyone who wants it and notify you here, or I'll notify JLC and they can make the new one available.

[Guest]

Re: The Process

After checking with Sonny, I will have a few copies of the Process at JLC Live on Friday at the end of the day when we all meet for a few cold ones.
You can look them over and add your name to the list to get a copy later because I will not have enough to pass out.
Anyone interested please drop me a quick note.

Jim

[Guest]

Re: The Process

Beezo,
To answer your question regarding the initial call time... No that time isn't technically reimbursed. It goes into the cost of doing business. Spending 10-30 min on the phone with prequalifying questions is alot less time than potentially getting there and having them tell you they only wanted to spend 15,000 for a kitchen that is actually going to take 35,000 to renovate.

Our time to go to the inital (free) meeting is more involved. Usually an hour in travel there and back and hour or so with the potential client. So that inital visit is actually 2 hours for free. That's ok as long as we believe that this a potential project that will fit for us and the client.

Hope that makes sense.
Take good care
Candi