“It’s only an estimate for Pete’s sake! What did you expect, a fixed price building quote?”
I’d be rich if I got a dollar every time I heard that from a frustrated builder trying to build his building business. Your client asks for an estimate and then wants you to assure them that the renovation will not cost anymore. Or worse, when building’s completed they are not willing to pay the extra amount!
In this article I will show you how to win more building jobs and keep your clients satisfied.
What they really want is an accurate assessment of how much the total renovation is going to cost, so that they can budget accordingly. Remember that if it’s a large renovation, it may be the only one they do in their whole lifetime. And they know nothing about the process! Nor do they understand the real difference between an estimate and a fixed building quote.
So when preparing your estimates consider the following
1. Teach them the Difference
You are the expert and you know the difference. So take the time to teach your client the difference between an estimated and a fixed price agreement for construction or renovation. Help them understand that really it is a matter of risk. If they choose an estimate then they should allow enough money to cover any unforeseen events. How much is unforeseen? That’s the $64,000 question for a renovation company. But you will have some idea based on previous experience and can give examples. If they wish for certainty then they should request a fixed price agreement or a building quote. It really depends on the level of risk they are willing to carry. So take the time to explain the difference and let them choose. It may be that they want you to move to a fixed price building quote.
2. Partially Fixed Price
There is always a certain amount of any renovation job that can be estimated reasonably accurately…even quoted. Especially the new building work, or the additions. So give your client a measure of certainty by indicating very clearly which components are included in the Fixed Price part of the estimate. Explain that you can’t tell them what you don’t know or what you might find once the job is started.
3. Establish a Variation Process
Provided that your building company has a watertight variation process, outline this to your client. Explain how you will not do any unforeseen building work (apart from small amounts below a certain amount) that is not approved by them. Rather you will explain in full what it is you need to do and why, and give them the opportunity to choose.
Your client is wanting to move and renovate their kitchen, open up a wall and add a deck for entertaining and BBQs. Tell them that you want to explain the difference between an estimate and a fixed price quote. Show them examples from previous work you have done. Then explain that if they wish you can do some work at a fixed price quote and the rest based on an estimate. You can probably quote the kitchen joinery and the build of the deck at a fixed price. But you can only estimate the work involved in moving the kitchen services and attaching the deck.
Then make sure you explain your process for when the work must vary from your estimate and that you will gain signed permission before proceeding.
By using these straightforward steps you will improve the likelihood of winning more building quotes or construction agreements. You will also win way more gratitude from your clients – and that almost always turns into further referrals!
So, let me check with you: Have you failed to close some deals recently? Have your building estimates been passed over and another building contractor chosen? Do your estimates kinda suck? I’d love to hear what you’re struggling with. Or tell me what has worked for you.
Just post your comment.
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