Guest Blog: What Happened When I Stopped Providing Free Estimates
If you are still running free estimates and playing a numbers game of leads to appointments to sales then I have something valuable to share. In the past I believed that if I did not actively pursue new clients, and provide free estimates, I would have no income. It was a numbers game; 5 leads - 3 appointments -1 sale. Sound familiar? In this article I share my lesson in letting go; finding the faith to trust a system to qualify prospects, and the positive impact it can make for your business as well as your cash flow.
How I discovered the solution that worked for me
For me, it was getting increasingly difficult to find and schedule client meetings with my increasing responsibilities of being a Mom with a terminal illness. Running from lead to lead was taking up the time I needed to run my business and finish the contracts that we already had in the pipeline. Holding on to how I always did things was holding us back. I needed a temporary solution to what was a temporary situation.
Then, one late fall morning while catching up with reading emails and industry updates, I came upon an article about a remodeling business joining with another remodeling business to create a winning partnership.
Inspired by that article I decided that if I could temporarily give up running the leads to create the sales opportunity I would then be able to concentrate on design, closing the deal and project execution. Doing so would be the temporary solution I needed to solve my current challenges. It worked. I found a design firm with a great front end sales system and at the same time was struggling with project management and finding responsive sub contractors. And, fortunately there would be no conflict, as they only needed to temporarily fill this need as they were relocating out of the area in six months, one year max. It was a good fit, they were looking to hire a per contract designer/project manager. The fact that I already had a top notch construction team in place sealed the deal.
The results
As a result of that temporary relationship I learned how to create a trained support staff at my own business and secured steady work for my team. By learning how to use and sell paid consultations our leads turned into project development retainers which then turned into profitable construction contracts. That temporary relationship was also a big success for the partnering firm; they had a record earning year and made a lot of money.
When I stepped out of my business and worked within a sales process for another firm it forced me to stop chasing down those leads that after too much investment of my time proved to be unqualified. As an owner, I would not have had the faith that charging for estimates would actually provide a constant flow of better customers. I was too invested in my previous training and experience as a sales person. I was dead wrong.
The change was an emotional one; here is how I did it
First I had to stop thinking of my role as being an in-home salesperson. Second, I had to better and fully understand why our clients were actually hiring us. Finally, I had to set up a marketing and sales system that could drive value and was not contingent upon my making it through the prospect’s front door to get the “opportunity to do an estimate".
Here are the steps I took and worked for me:
The result of adopting this system has been life changing
I no longer run around from appointment to appointment. I now have the time to focus on creating more ways to provide paying prospects with value early in the process. Our business is running with more consistency and cash flow has increased. For every consultation I go on now we have a 70% close rate to a full construction contract, a 20% conversion to a design/material contract and about 10% of our prospects don’t move forward.
Since returning to concentrate in full on my business and my new sales role gross sales have increased over the last twelve months by more than 75%. This is because we now focus on our ideal client. We actively seek clients that have budgets that match our business model and refer the other prospects to contractors that are better suited for them. Cash flow problems have all but disappeared.
It starts with faith. It took trusting a system, knowing who our client is, and having the time to create opportunities to provide value.
Guest Blogger: Cynthia Murphy, CKBR, is a Certified Kitchen and Bath Remodeler and co-owner of Murphy’s Design, LLC. She operates a Design Studio in Fairfax Virginia. She will be launching her blog called “Home Design Labs” in June and hosting an industry specific interview podcast called “The Social Home Pro” this summer on iTunes and Stitcher radio. If you would like to connect with Cynthia you can contact her via her website, blog or you can email her at cynthia@murphysdesignllc.com.
In the design industry we have many challenges besides meeting the concerns, wants, and needs of our precious clients. Many businesses have resorted to marketing on the basis of something for free. It prompts clients to want what is offered for free, however, at the same time, causes the knee jerk reaction question to arise, “How can it be free, what’s the catch”?
This poses itself as one of the challenges most noteworthy; the honest perception of value that is created. For a certainty, most trends are to downplay, for market segmenting purposes, the true value of reputable trades or product. 
To advertise something for “free” in reality means something else needs to recoup the costs related to the “free” product or service. This is, in all respects, “Bait and Switch” by offering something for free that really isn’t. Doing so may call into question being honest in our business dealings.
Lowest cost marketing is not being honest in business dealings, as it may not spell out the true reason something is less, or much less, as many products and services, on the surface, appear to be the same. The adage, “You Get What You Pay For”, is usually visited after the disappointment comes, once the bargain fails to meet the expectation and the delight for the savings is replaced by the sinking feeling, “I’ve been had again”. As designers, is this really the outcome we want our clients to experience, let alone, having to deal with it once exposed?
There are many remodeling business myths that seem to have become truths for way too many remodelers. That’s too bad. Believing those myths may be holding them back from being able to grow their businesses. Allowing these myths to remain in place will definitely prevent remodelers from successfully growing their businesses past the $1 Million installed sales threshold.
Again, will you jump off the bridge, too? Will Delta Airlines let you pay after you land? Completing remodeling services without being paid for them before you do them is in my opinion foolish, and a huge risk for most remodelers. It instantly creates cash flow challenges in a business where cash is king. Breaking $1M without good cash flow might be the death of your business. Here is how you can create payment schedules that keep you ahead of your customer: 
For large ticket, complex projects face to face presentations are generally preferred simply due to the scope of the project. But if I have done my job correctly up to the point of presentation, I should already have the job. I should have already established whether they can afford the project and if they have selected my company. The bid is just a formality. Price is WAY at the bottom of issues, as is the method of delivery. For most projects, we would have already met multiple times up to the point of presentation and that’s where I do my selling. Whether I email the quote or hand deliver it is immaterial in my experience of selling projects for over 15 years. I personally prefer a face to face meeting, but have found it unnecessary in most instances and base that decision on the customer and their personality. I have never been the cheapest bidder and tell people up front that I never intend to be. Yet my closing rate/ratio remains extremely high.
I find that our current speed of living in general is much faster than in the past and people get irritated with too many required face to face meetings. They most often prefer the email method so they can make a decision at 10pm after work is done, the kids are asleep and they can focus. Am I serving them or are they serving me? I always ask what their preferred form of communication is and then I respect that. If I have established myself as the contractor of choice, reflected in our discussions (phone or otherwise) that I have accurately heard them and understand their needs/wants, established a comfortable budget, and minded the details, why waste their time and mine with an unneeded additional meeting? Let’s do this!
If like Milt you disagree with something I post at my blog please feel free to let me know. Milt did a great job explaining his viewpoint in a respectful and thoughtful way. I must admit I agree with his approach as well. When Milt emails his proposal he is doing so to confirm in writing the agreement he has already made with his prospect who has agreed to become a customer. Milt is certainly not an order taker, but rather a great example for other contractors seeking to improve their sales abilities and results. 
However, I understand the allure of a fixed-price contract for both the owner and the contractor. Fixed cost is most appropriate with a very thorough, well-defined set of construction documents (plans and specifications) and even more so if those complete documents are produced for new construction. In a less well-defined job with plans in progress, or in an older home, cost-plus/time and materials may be more appropriate simply because there is too much that is unknown to be able to estimate with full certainty what it will take to perform the work.
Again, if you have fully developed plans and specifications, and especially in new construction, where most factors are known and manageable, fixed price makes sense. With phased design, where plans are being developed on a fast track as construction proceeds, and especially in renovation work, it’s my opinion that CP/T+M is the better choice.
My Great Uncle's brother was a custom wood worker and built everything from tiny jewelry and cigarette boxes with minute inlay and detail, to a full spectrum of furniture and woodworking. He built his shop in the cavernous basement of an ancient brownstone five blocks from the harbor in Philadelphia. In this shop he had every true carpenter's tool of the day including an entirely leather belt driven coping lathe that he built himself. Every tool had a place and there was a place for every tool, all sharp, oiled and at the ready. From my uncle I learned the necessary task of stone sharpening; honing the edges of every tool, from chisels and planes. I also learned how to sharpen each tooth of a circular blade and the art of "setting" the teeth of each handsaw in the shop, positioned teeth down and stacked front to back in the handmade wooden tool boxes that cuddled every tool.
Eventually the first miter boxes, buck saws and smaller radial arm saws arrived and we started to move away from the hand tools like the Yankee screw driver, the brace and bit and the miter knife. We started to use nail guns, carbide blades and a plethora of modernized tools to save time and money; not knowing that we would forever kill the "Traditional Carpenter". I witnessed men become unwilling to use a hand tool. They were unwilling to know, understand or simply feel the joy of building something you hoped would be there forever, built with your own two hands. Those days are gone.
Upon a little reflection I’ve realized there are a lot of ways to organize a contracting business, none of which are the “gold standard” and all of which either purposely or inadvertently express the personality of the owner. At your inner core are you a manager or a craftsman? Are you a little of both? Are you neither? Generally, I’ve noticed successful people have figured out who they are and how they add value to the equation. Then they’ve set up a business system to capitalize on their strengths. 
If you are excited about putting a team of specialized professional craftsmen together to construct a series of varied job types where organization & management are key elements of production & profitability, you’re a good fit for a general contractor operation. A GC set up is generally best for larger jobs like a custom home, a larger addition, or a whole house remodel job. Sometimes smaller jobs that require a higher level of craftsmanship like a special faux finish on walls, or custom built in cabinetry, or precision stone work are best left to the specialist sub contractor. Higher end bath remodels are also a good fit for a GC with a loyal team of trade contractors. You absolutely must develop a team that you work with regularly so you can be assured of consistent quality and integration between trades.
One employee was found using a table saw without using safety glasses. This offense came with a $1200 fine. The inspector noted the violation was corrected during inspection.
Mark shared that his first experience with OSHA was back in 1979 when working as a project supervisor. An OSHA inspector showed up at the job site with three books under his arm. Mark said the inspector greeted him with; “You’re going to get a fine today. I’ve got three books here and I’m sure I can find something in one of them”. 
Then, in a 
“Never sell from an empty wagon”
