I have been getting frustrated lately, because I am having a hard time getting jobs, without giving a "free" estimate. I know there is a time, and place for free estimates, like with established customers you know you will do business with.
My problem is, everytime I try to explain to a new customer I need to charge them to come out and look to give an accurate estimate, I lose them right then and there.
It's like they expect me to work for free, and give them free gas @ 3+ dollars a gallon!

I don't know how to get around this, since there are a lot of guys out there who are giving out free estimates,

I am just about ready to close my doors, and go work for somebody.

A licensed, bonded, insured, and Cedia certified tech should not have this much trouble finding work.

Give us some more information.

1.) How big of jobs do you usually do?
2.) What type of work are you doing?
3.) How far away are the jobs?

I do not charge for an "estimate," but the estimate is not always accurate. If I know we are in the same ballpark with the budget, then I go to a "bid." The bid is detailed and 8 times out of 10 I get it. The other 2 either the budget didn't allow or they went with someone else. But I do not charge for either.

Now with that said, I am not doing $100K systems. I am doing simple phone/TV/data with a central vac, alarm, intercom, and distributed audio system and/or small home theater. My average job is about $15K for a whole house, but I keep my guys busy with tract builders doing $1k jobs.

This can be tricky. I do free estimates for smaller jobs, one that I could put a bid together in a half day or less, but if it's a job that requires a "design", i.e. whole home, dedicated theater etc. I charge for the design time and request a $500 deposit. At the end of the design they get the paperwork and they can go elsewhere with it if they wish or they can continue with us and get a break on the final cost equalling the amount of the design cost, (which is factored in anyway).

The bottom line is - if someone wants a system designed for free that may take you a considerable amount of time then they are not appreciating the work you do and may not be your best customer anyway. I've lost jobs on this arguement before and couldn't care less. I need to know that my customers are good people to work with and are willing to invest some trust and cash in me to get the right system.

estimates are free, quotes and designs are not real simple

I know exactly how you feel... Seems like over the last couple years people are getting tighter and tighter... If it is a bid that takes you 1/2 a day to do, maybe you could roll that cost into the bis under labor?

I've been toying with charging a house call fee that could be taken out, if they go with us... (I think Magnolia is doing this $120??? - but correct me Magnolia if I'm wrong)...

I am scrambling so hard now just to keep people from shopping around, I'm too chicken to do this, although I know I probably should -- to help cover costs, and weed out the time wasters... If we were super busy, it would be easier to institute, but being we are slow right now -- I can't risk losing any business!

It would seem that many of you are trying to be both the architect and the builder at the same time, so I wonder if a dual headed business strategy would be better.

Have a service company that provides design services. Present it to the customer that way so they understand they are getting a service. No one would expect a set of plans from the architect for free. Then have an installation company that performs the labor. In reality this can all be the same corporation, but create different fictitious names to clearly divide the tasks.
Could be, "Theater Magic Designs" and the sister company "Theater Magic Installs".

For the small jobs you can just roll in with the install company, and work 'a la carte' style based on ballpark estimates. But for the more serious customer, roll up with the design company and be able to offer a professional solution and a professional bid/contract.

With so many trades offering "Free Estimates"on the sides of their vans and trucks, it is common for people to think we (A/v companies) should give them away as well. We always charge $100 minimum to go to the home. We do not call them "estimates" though. We call it an "In Home Consultation". Sounds expensive, eh?

If the customer whines about the fee, explain that you will provide details, and design a system that is custom to their needs and this takes time as all designs are different. If they still aren't sold, tell them to come into your showroom and see what they would get. If still whining, hold your ground and politely let them know that this is your policy. As a last resort, offer to refund the full fee. If they are whining about a fee that is fully refundable, then chances are they will try to beat you up on pricing later, and you do not want a client that doesn't pay promptly.

Always ask how they found your company. If the answer is "from a friend" ask who it is. If they are a referral from one of your previous clients, Free estimate. Be sure to let them know that you normally charge for an "in home consultation" but you will waive the fee for them.

Of course former clients get free consultation.

Everyone else who says they found us from the yellow pages, newspaper, or just driving by, Pays for us to come out. This prequalify's them as a serious customer that will trust us. I always refund at least half if they do the job with us. Most say that is fair and are happy to have a professional come out.

I am happy to give a free "estimate" in the store. I can scratch some figures on a piece of paper ao they can get a ballpark on what it costs to have a good system installed. If they want details and accuracy, then they pay for the consultation. If they buy a TV from us, I will go out to their house for free. This sometimes helps close on the equipment.

Free estimates take up too much valuable time if the client is shopping around. Everyone should charge for them.

My $.02

Estimates I do for free. Now, if we get to the Bid stage, and I THINK they are going to shop me or feel that they are just out for free advice I put in general terms ie. 8" speaker with a price betweem two models. If they come back or I KNOW they are going to go with us I get specific. Its a crap shoot I know. Been very sucessful so far, but have lost some for sure - don't really know why. BUT, if they go with someone else I NAIL them when they come back to me to FIX, make BETTER, it doesn't sound right, I don't like the TV etc.

Thanks guys,
You all have been very friendly, and informative which is not typicle of this site.

I can see you all share my frustration

I do find that my repeat customers, and referrals are eager to do business with me, and it seems I can smell a lookie loser from a mile away, but I take the bait anyway cause I'm hungry!

I guess I need to quote these people some generic rates on the phone, and stop wasting my time and gas on anyone who asks "will there be a charge for this?"

Some have even told me "Your business model is not a good fit for me", because I charge for an estimate, and don't work for free!

Steve

this is something we all deal with to some extent. I second Grego's points. Especially about wether it is a referral or not.

At this time I do not charge for designs and my bids are pretty detailed, which is certainly contrary to what many of you do. My projects are usually pretty basic. Family room home theater and some multi room. I do tend to put too much time into each proposal but I've streamlined the process recently to the point where I can generate a "rough draft" pretty quickly and painlessly and still have it look very proffesional. I owe a big thangs to Gary from IP for that.

My approach is evolving all the time but frankly my current focus is to improve my presentation skills and the quality of the printed proposal to the point that my closure rate is high enough that I don't have to worry too much about the "lost" sales. My people skills generaly suck - all former sassafras employees need not comment - but I've gotten to the point that most of my lost sales are people that just didn't realize what all of this would cost.

there is one exception. cold calls out of the phone book. For those I handle it on a case by case basis. Usually a phone book call is going to have some existing equipment so I charge a minium service call to look it over and see what they need. If it is going to evolve into a decent size project then the service call is waived.

All rules are meant to be broken but I stick with that pretty tightly unless this is clearly a retired senior citizen. They get charged time and materials but no minimum. I was taught to respect my elders.

You can weed out wasted time before you waste it by "qualifying the job" at which point you then move to the next stage. "what are my chances of getting the job". After awhile you get better at determining what your chances are, but almost every situation is different so you have to develop an intuition from your past experiences.

Somewhere along the way you have to get the owner / builder / architect / designer or whomever is going to ultimately decide whom will be selected really excited about, or confident, or both that your ideas and format are the right way to go. If you do this well, you can confidently spend the time required to present a more comprehensive poposal and design without worrying too much that it will be shopped or copied it's still not a guarantee, but it's a lot less of a gamble. Get to that warm and fuzzy stage first.

Theater Magic,

I'm surprised by your comment about help not being typical on this site. My experience is that when you pose a good question like you have... that many of these guys are right here with very helpful information.

I think we've all gotten a couple flames here... at least anyone with a moderate amount of posts... but the same people that may not agree with one of your opinions will gladly help you later on.

I am in your boat... I'd love to charge for proposal time but it just doesn't work here in Seattle (land of the Microsoftie and over 1000 A**D slammers). I get my work from years of referrals and some hard marketing. My years of retail may have made me more polished on the sales end than some who are more just technical. I close around half of the jobs we look at that are retrofit and I usually give the guy a nice proposal... for free... along with a list of referrals. When I'm up against a side jobber or a newly formed "business", losing the job based on price is actually a blessing in disguise. I feel your pain though because most of us have been there where you have to take the one you don't want at a price you are unhappy with because the alternative is Kraft macaroni and cheese and a late mortgage payment.

I don't get as many new houses as I would like but when I do we are well taken care of. This is due to a refusal to give more than a Word Document up front. I'll look at your plans or walk your house for no initial consultation because everyone else will too. I see these as time consuming jobs and if the job involves a set of PLANS... you are not getting free work... PERIOD. People who have a set of plans have PAID for these plans... They are already used to paying for plans. What I do is count structured zones, speaker zones, talk about lighting control, shades, etc. etc. etc. I have templates that I work off of to create the document and it looks semi impressive. What it does not do is specify any product. It gives a range of budgets for "distributed audio" "structured wiring" "lighting control", etc. If our budgets are in the clients ballpark we meet again and set the project budget. If they decide they'd like to go with us they pay 10% of their budget for deposit.I ask for this at that second meeting and they can either write a check then, mail one when they want to get started or call me with a credit card number. They don't get a third visit.

If we get the job, we get the plans and overlay our prewire plan and we bill against their retainer at $75.00 an hour. We can now bill for subsequent meetings and design reviews too. THEY DON'T GET THIS MONEY BACK!!! Our design is part of the job... just like their architect's was. How many good electrical, heating or plumbing contractors give away their design? Our design usually leaves a chunk to apply toward pre-wire, enclosures, speaker rings, etc. Our expectation is that they pay up the pre-wire when we finish it and its billed T&M. We then supply the list of products for trim phase (OnQ modules, Speakers, trimplates) and they pay for the trim products. When trim is complete they pay for labor up to date. When electronics are ordered they pay up front. They settle the final bill based on labor and extra parts.

Seems a bit harsh but it works. It keeps the right amount of the clients money in our hands so they're not overpaying and we're not financing their job. It weeds out the something for nothing folks. It means we aren't spending 10-20 hours going over a plan and giving away our expertise to have some undercutter take our design, chop a few prices and leave us wishing we had spent that time either growing our business legitimately or playing with our kids.

Hold your ground...know that these people... even the extreme hobbyists ultimately need the knowledge in your noggin... be a bastard and don't give it away once you gain a client. Free consults may be the norm for most of us but remember that they are also your way of figuring out whether or not you want this client... if you charge up front you may not be able to gracefully "decline to bid".

This is the best advice you can take. You need to qualify them over the phone before you bother going to meet with them. If you think it is worth pursuing then you meet with them. At this point, when I meet with people I will qualify them some more. I explain what we offer, and make sure we are a good fit. I just don't take everything that comes our way. Most importantly I do NOTHING for free, nothing. If you have qualified yourself and presented the value that you have to offer then anyone worth having as a client would not expect you to work for free. I collect a $1500 deposit before I do anything, $1000 of which I will credit back to them if they go with our system. I explain that this will hold them a spot on the schedule. Only then will I give a proposal. I also offer to give people the names of other company's that will give them a free estimate, and this often helps them see the value in what I will provide them.

charge for estimates, so the rest of the industry can continue to do the same thing. nothing is free because it's costing someone.

When I am conversing with the potential new customer I will normally say " now I know no one likes to spends more than they need to, but I am curious about how much money you have budgeted for this project".

I believe in being direct and if the question is put right out in the open I have never had a customer act offended. This will save you time and immediately qualify the customer.

One guy called me and was asking about the type of surround sound systems we install. I asked him the question and he told me that he had seen some "real nice ones at Walmart" and wondered if we install those types. Needless to say we did not get that sale.

Dang it!!

Dave T