Here is an idea guaranteed to improve your profitability. Stop working for free.
We continue to get phone calls and e-mails from contractors who insist on working for free. They then get mad at the clients when they don’t want to sign a contract. They can’t believe that all the information they provided, along with their good looks and charm, didn’t garner them a contract.
These contractors send me notes telling me how they prepared an itemized list of things they were going to do on the job to be sure the customers know what they are getting. While they don’t put prices on the items, they do want to be sure that the customers have all the details. Some even go so far as to prepare “preliminary sketches” of the project.
I have no problem with providing details. What I do have a problem with is doing it before you have a commitment from the customers.
When they ask for free information or how you are going to do something, tell them, “That will all be spelled out in detail in our agreement with you for the work to be done.” You will find out real quick if they are serious about hiring you or if they are just looking for free information, which is more often the case.
We recently received an e-mail from a contractor telling us about a sales call he had been on. He asked all the right questions and moved the call along to the point that it was time for a design agreement. The customer told him he wanted to think about it.
In a day or two, the customer sent him a note that said, essentially, they had thought about his offer and they “hadn’t planned on investing in drawings.” The customer said that he was hoping that our contractor would provide an estimate that would help them make a decision on the project. He closed the note by telling the contractor that his “philosophy“ prevented him from paying for the contractor’s service.
The people in this world who make the big bucks are the ones that make the best use of their time. Giving out free information is not a good use of your time and it does not feed your family.
Our contractor, after reading the letter, sent back a note telling this chap that he didn’t work for free, and that until the homeowner had detailed drawings completed, the contractor would not be able to assemble anything other than the approximate estimate he had already provided.
Suffice is to say that this contractor handled the situation almost 100 percent correctly. He saved himself a ton of time and work because the homeowner was not serious about getting a job built. The homeowner was shopping, not buying.
The odds of the contractor getting the job after investing time and effort in an itemized estimate or creating plans for the homeowner were slim to none — the odds of the homeowner looking for someone else to build those same plans for a cheaper price are great.
Sometimes you just have to bite the bullet and say “No.” You need to find and spend your time with clients who are interested in getting a job built, not just shopping.
This contractor saved himself a ton of time and aggravation. Some other poor soul is going to come along and provide this customer everything he wants, short of building the job, for free. He won’t get the job, either.
When you go to a sales call, get the four basic questions answered. Then get a commitment for a design agreement or a signed letter of intent before you put all that information together. That is clearly spelled out in our book, “Profitable Sales, A Contractor’s Guide.” It doesn’t take any longer to do it right than it does to do it wrong. The results are amazingly different.
If, on the other hand, you are preparing all that information in the hope that, because you are such a nice guy or gal, they will buy your services, I can guarantee you that you are wasting at least two-thirds of the time you are spending on potential customers.
I am not being mean or nasty. My old age has not turned me into a cranky old man. I want you to make money, lots of it. You can do that by getting commitments before you give the customer lots of information. Give it a try. The extra money you make by not giving your work away will more than pay for the time you spent educating yourself in sales. n
Michael Stone is a business coach and consultant with more than three decades of experience in the construction industry. He wrote the book, “Markup and Profit: A Contractor’s Guide,” published by Craftsman Book Co. For Michael’s free newsletter, sign up at www.markupandprofit.com
Michael, an experienced speaker, is available to speak at conventions and workshops. He can be reached by e-mail at email@example.com, by phone at 888-944-0044, or on the web at www.markupandprofit.com