Over time, business owners take on additional responsibilities—especially in this industry—and when we finally hire a professional who can do it faster and better, we wonder why we didn’t do it years ago.
The same goes for our recent welcoming of a dedicated in-house estimator. It may sound unusual because many contractors give away estimates for free, but the short version is you get what you pay for.
And if you’re considering axing free estimates, it’s easier today than five years ago.
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Really? You’re Still Giving Away Estimates?
We see our projects only increase about 1% to 2% in change orders because we spend a lot of time estimating and planning. It’s been several years since I’ve received pushback, but when I do, I ask, “Do you think a couple of hours is worth basing this massive investment that you’re thinking about making on your home?”
If you have enough work but not a dedicated estimator, then that means something is suffering.
All free estimates really mean is the people who actually sign contracts pay the overhead and time associated with the free estimates that never got signed. We’re compensated for our time, but we’re also setting a standard of expectations, teaching homeowners how to do business with us and be good clients.
Often the health of the relationship is much more important than short-term monetary gain. I think this helps clients see this as a partnership.
The Downfalls You’re Not Seeing
If you have enough work but not a dedicated estimator, then that means something is suffering. Maybe that means you can squeeze in one more project a year. Maybe it means you’re working your people to death.
If you have somebody whose job is project manager but also have them doing anywhere from 10 to 20 hours a week of estimating, it’s not fair. You’re going to burn them out. They’re going to make more mistakes.
Not having one limited how much I could build and how quickly I could get my contracts ready to sign. It’s now two to three weeks versus waiting two whole months—that’s a big deal. If an estimator buys me a whole month and a half of construction that I couldn’t get in a normal year, that might be another $300,000 to $400,000 I can build.
The Benefits We’re Reaping
What we’re finding out is that it’s coming out better than we ever thought it could be. In-house estimators can do other things besides estimating: order tracking and budget managing to build more and deliver a better experience—and go home to their partner and have that person not hate you, the owner.
What’s nice about this is we can take someone with any sort of construction estimating experience and quickly get them onboarded. We didn’t want them to understand construction principles but needed them to know how construction works and how estimating in construction works.
Welcoming this new team member has already helped hold us to a higher standard. For example, after reviewing our plans, they provided feedback we didn’t know we needed. They’ve already helped us improve our plans and become even more specific, helping drive efficiency.
An in-house estimator needs to be profitable, but it pays for itself. It’s billable like a designer, and you simultaneously get a better product and get more projects ready for construction sooner.