I have a part time business right now (was full time for a year) and have finally been in a position to send out a decent amount of proposals. I have been dealing directly with the home owners on projects that involve a fair amount of design work. Being an architect I use it to my advantage, at least I think I do. It seems that a lot of folks seem to put projects on hold for a while or can not make their minds. What do you guys think? Is this a sign that I am charging too much or just the way these things work? I’m getting a little frustrated
(Business and Management Forum)
From contributor M:
I deal directly with homeowners, too. In my experience about half of them are fishing for ideas, much like the couple who will 'browse' through furniture stores for an hour and leave without buying anything.
If you haven't already, peruse some of the recent threads here about charging for your design time. You should at least be able to recoup for your design work if it turns out that they walk away without buying.
As for not being able to make up their minds, it's the nature of the beast. The only customers I've had who knew exactly what they wanted were single folks. Couples always seem to waffle (one wants contemporary, the other wants traditional, etc., etc.). And the inevitable attempt to blend the two styles always looks goofy or has aesthetic issues from both sides.
At this point, I'd be happy if I were you. Sending out a lot of proposals means you're getting a fair amount of exposure. I'd be more worried if you were impersonating the Maytag repair man, sitting around waiting for someone to call you.
Lastly, a simple change in language during the final presentation helps close the deals. Speak in terms of 'when' the project is installed, 'how good it'll look in a few weeks' when done. And have a calendar out, ready to write on it, to confirm with them when the work 'will' begin. Speaking in positive, definitive terms during the final presentation is sometimes all that's required to tip the scales. Not pushy - just certain of yourself. Whereas, speaking in terms of 'if you want it', 'when you finally decide to build it', etc., perpetuates their ability to continue to waffle. I like my waffles with syrup and butter. I don't like them at the presentation table when my plans are involved!
The first discussion about money needs to speak to global concepts. Tell them that you don't have enough information to talk about their budget but you can talk about what kinds of things drive budget. This is the arm waving part where you start to learn what is important to them.
If you can talk about butt hinges vs. European hinges, or stain grade vs. paint grade you can start to discuss dollars.
When you are talking about dollars, make the statement about how important it is to stay on budget and suggest things that you can do to maintain a low budget. At this point the customer will either tell you that the cabinets are far too important and that they would rather cut back somewhere else, or they will perk right up let you save them some money.
Let them know that they are in charge of where the budget ends up and you're good at designing a project that stays inside that budget. Treat these people like you would your mom. She didn't have to cash in her 401 K to do the kitchen remodel but she would recognize when someone was treating her dollars with respect. Give her a good shopping experience and you will get her friend's business too.
If they desire to proceed, I at that time give more detailed drawings and give a firm price on the project, which includes a bill for a down payment. My design fee is not specified, but is included in the total cost.
Initial sketches and estimates I am happy to supply and I do not charge for them. Like you, I run my cabinet shop part time, in conjunction with general carpentry work. When I have given estimates and have projects on hold, I will call the customer after they have had a few days to peruse the sketches and the costs and share with them that I need to know if they desire to proceed because I need to know whether or not to include a block of time for their project.
I try to share up front that my calendar is scheduled by the receipt of a down payment on a first come/first serve basis. It matters not to me if they need to wait a week, or a month, or a year, providing that they understand that they may be prolonging their delivery by indecision. Such gentle instruction has been greeted with satisfactory results, for I think that I am always given a direct response one way or another, most of the time with a pledge to send a down payment and a request for final drawings and a bid.
This is where I explain to them about my proposal and what it will outline, I do not design anything until they get my proposal and agree to the design stage first. The proposal lists a nonrefundable design fee a range of what the project will cost and sets up the design and fabrication stage. It is after the design is agreed upon that I give them the fixed price. They can elect to not continue with the fabrication stage if this so choose but they will loose my design fee at the most.
Does this sound fair? I do mention some idea of costs but I have been a little uneasy talking about it. I have a problem with doing anything cheaply so I have never given any options of how to do something cheaper. Am I going about this the wrong way?
I figure that most of these customers will talk to at least a couple more shops, so I try to be the last one they see. It helps if someone else warms them up first so I'm not the initial messenger about why a cup of coffee costs $4. Put yourself in your customer's shoes. Would you want someone to design a project for you who never got around to asking how much it should cost? Just get right to this question and you will find that your success ratios improve. This is a skill to be learned, just like flattening a board on a jointer. The only difference is that this will make you more money.
I guess my intent was to figure out from experienced pro's, like yourself, what the indicators are when people are truly interested or just fishing. When people tell you it is on hold because of, "x,y,z is happening" is that an indicator that they are gone? Have you found that people really do not care what construction methods are used or what materials it is made of? It seems when I describe some of these to them (and most of these people have money) they get that glossy eyed look on their face. I guess it comes down to priority in their lives and this project may be just real low on their list. I would assume every industry has its set of "buzz" words and I have not figured this one out yet.
1. Most customers find me through the internet, if they call me for a quote and haven't been to my web site, I ask them to look it over first.
2. I used to get a lot of window shoppers wanting to test the waters but not spend, but then I incorporated some pricing on my web site, just estimates of what the projects on the web site might cost them today. When people see the prices, this helps weed out most of the window shoppers, and gives people a real idea of what custom work costs. It also lists some of our terms and policies. It helps them know who we are and how we work.
3. When I talk to them on the phone, I try to find out their budget in a tactful way. "Did you have a budget in mind for this project?"
4. I get as many details as I can on the phone about what they are looking for, size, material, design style, etc.
5. From all of this info, I can usually make an educated ballpark guess that their project might fall in the range of $ - $
6. It sounds like a lot on the phone, but it only takes about 10 minutes, and sometimes saves me a lot of drive time.
7. I take a laptop with me to visit the customer, and can do a basic design and give an accurate quote in 1 - 2 hours at their home. Taking a laptop and having them look over my shoulder while I design gives them a lot of creative freedom, and really helps to sell the work.
8. Usually at this time, I will get the small printer out of my truck and bring it in, print out a contract, take a deposit, and be on my way.
9. I never leave them with any drawings unless I have a deposit. I don't charge a design deposit, I just take 50% of the project, unless the cost is like $15,000 +, then I usually add a progress payment schedule into the contract.
10. Once I get the deposit, I then go back to the shop, and spend the time to make detailed drawings, and forward to the customer for final approval before I build.
I know I was a little long winded, but it works very well for me, and saves me a ton of time. I learn very quickly if they are serious or not to minimize my lost time. One other note, if they don't sign a contract right away, depending on how I feel about them, when I leave them with a quote, there is a note in the quote that the price is only valid for between 5 - 15 days, and I make a point of letting them know that because of fluctuating market conditions I can only guarantee the price for so long. This usually helps get them to move their feet. Also, if during my initial visit, I get a bad feeling about the customer, I will leave without giving them a firm quote or taking any money, I will tell them that I have to work on it more back at the office.