The Design Agreement: How to Stop Doing Free Estimates
authors David Lupberger | May 26, 2020
You should stop providing free estimates. It is called free consulting, and you will not be successful giving away your time. In providing an estimate to a potential customer, you may be doing everything from putting together some initial numbers to providing preliminary design work. Let me review an action plan to begin the practice of charging for estimates.
If you are going to stop giving away free estimates and designs, the first step is to convince yourself that what you are doing has value. If you are not convinced that your design and estimating efforts are worth money, you will communicate this to your clients in a flash. Architects are paid for their time. Interior designers are paid for their time. You deserve to be paid too if you are the one filling a design role, which may include:
- Meeting with the clients
- Comprehensive needs analysis interview
- Jobsite measurements
- Preparing conceptual drawings
- Meeting with clients again
- Extensive design/floor-plan consultations
- Meeting with subs to optimize the design
- Revisions as needed to the floor plan
- Preparing 1/4” drawings
- Meeting with clients again
- Blueprinting costs
- Telephone expenses
First, you must overcome the typical homeowners’ “built-in” notion that you should provide free estimates. Can you imagine going to your doctor for a free physical or going to your dentist for a free checkup? Why do remodelers still offer to do 10-15 hours of work designing and estimating projects for clients before they ever sign a contract, much less get a penny for it? You cannot afford to do it anymore. Your time is too valuable. If you are doing a smaller project like replacing a window or a door, then a design agreement is not appropriate, but common sense will tell you that.
The question is how do you start charging for something you once gave away? It is a two-step process: first convince yourself; then convince your clients. The first problem is internal. You must become convinced that you are providing a valuable service to your client during the estimating and design development phase. Who else or what other professional would give this much away? At some point in working with a potential new customer, you need to start charging for your time.
You are Saving Them Money
Think of it this way. Your expertise is saving the client money. When I was remodeling, as soon as I understood what a client wanted, I would start consulting with my best subs. I would talk to the electrical sub, plumber, and the HVAC contractor to find the most efficient and effective way to do what the clients wanted. This proactive conversation saved me from hearing the plumber later say something like: “If you only would have put these water lines on the other side of the house it would have been so much cheaper.”
Even if a potential client hires an architect or a designer to do their design, those folks may not actually go to the tradespeople who are going to do the work and ask for their input. The practical experience you can add during the design process will not only save the homeowner money but could improve the overall design.
The First Call is Free
The sales process I followed was that the first visit was free. That’s when I did my job by asking the questions needed to ask to see if this was a job I wanted. There were questions about timing, budget, past research, and any past experience the homeowner may have had with remodeling. In sitting with potential clients, I wanted to see if the conversation flowed easily, and if we communicated clearly. I learned long ago that if the conversation was not smooth on that first sales call, that it is was going to get any easier after the project began.
At the end of the first appointment, I would tell them that the next step in the process was for them to sign a design agreement. The design agreement lays out a payment schedule for the delivery of preliminary plans and the cost estimates that go with them. I would point out the benefits of working with a design agreement, and the value engineering that the customers would receive by working in this way.
Getting a signed design agreement creates some powerful results. When the homeowner writes a check (however small), they are off the market, because they will not sign a design agreement with more than one contractor. They are now your customer. With a design agreement, free consulting stops after the first sales call.
If you would like to see a sample design agreement, contact me at David@RemodelForce.com, and I will send you one for review.