Why Contractors Should Charge for Proposals
TL;DR
Free proposals aren’t free—they cost time, profit, and momentum. Contractors who charge for proposals pre-qualify better clients and break out of the cycle of chasing unprofitable work.
- Free estimates attract the wrong customers
- Proposals are professional services, not sales favors
- Charging upfront filters out tire kickers
- Qualified clients value your time and expertise
- Paid proposals help break the Craftsman Cycle™
Next Step:
Learn how to pre-qualify clients and get paid for planning so your proposals lead to profitable projects.
CHARGING FOR PROPOSALS SERVES YOUR CUSTOMERS
Many residential contractors waste their time by running around giving out free estimates to customers who never intend on hiring them. This practice increases the cost of a project because someone has to pay for that wasted time. If a contractor doesn’t recover those costs, then they will end up working for unqualified customers on unprofitable projects. Working for the wrong customers on projects that don’t produce a profit keeps contractors trapped in The Craftsman Cycle(TM).
THE CRAFTSMAN CYCLE(TM)
The Craftsman Cycle(TM), as described in my latest book, Profit First for Contractors, is the seemingly never-ending loop of urgent tasks and responsibilities that keep contractors from gaining traction toward their important goals.
The solution to breaking this cycle of price work, get work, produce work, and find work starts by pre-qualifying your potential customers.
The best way to pre-qualify your potential customers is to charge them for the work they want you to do.
If they aren’t willing to pay for the work you do, then they aren’t a good fit for your business.
WHAT IS AN ESTIMATE?
As I describe in my first book, The Paperwork Punch List: 28 Days to Streamline Your Construction Business, an estimate is:
– a guess based on experience.
That’s it.
And, if your potential customers can provide you with a decent description of their projects, then you should be able to give them an estimate over the phone.
If they can’t give you a detailed description of what they want, then they need your professional services to help them determine the budget and scope of work.
These professional services take time to produce, and that’s why you must charge them.
If you don’t charge them for the work you do, and they decide not to hire you, then who pays for your time?
ANSWER: The customers who do decide to hire you.
In my opinion, that’s not right.
You should be rewarding the customers who decide to hire you, not penalizing them for your ability or inability to sell other potential customers on your services.
FREE ESTIMATES ARE NOT FREE.
Are you sick and tired of wasting your time, giving away your work for free to customers that will never pay you enough to make a profit?
If the answer is “YES”, then you need to enroll in my PAID for PLANNING training program.
Sign up here and you’ll receive a FREE VIDEO training and learn the 3 steps to pre-qualifying your clients and getting PAID for PLANNING.
Turn Your Proposals Into Profitable Systems
Charging for proposals is the first step to valuing your time, but how do you ensure that your pre-construction services lead to profitability? That’s where DataMule comes in.
Built on the operational framework taught by Shawn Van Dyke, DataMule gives you the tools to not only charge for your time—but track it, manage it, and leverage it to grow your bottom line.
With DataMule, you can:
- Organize and Automate Your Pre-Construction Process
Build repeatable workflows for client intake, estimating, and proposal generation. - Track Performance by Proposal
Measure close rates, hours spent, and estimated vs. actual margins, so you can improve your sales process over time. - Build in Profitability from the Start
Connect your project planning tools to cash flow forecasts, job costing systems, and Profit First accounts. - Spend Less Time on Tire Kickers
Use DataMule’s lead qualification workflows to ensure only serious, pre-qualified clients make it to the proposal stage.
If you're tired of giving away your expertise and not seeing results, DataMule helps you professionalize your process, so every proposal works harder for your business.
HOW TO CHARGE FOR PROPOSALS
I recently appeared on Episode 5 – Season 10 of The Undercover Architect and discussed with the host, Amelia Lee, how contractors can charge for their pre-construction services.
Below is a [VIDEO] of part of our discussion where we discuss what a homeowner should expect from a professional contractor. I give an example of the type of conversation a homeowner and contractor should have before they enter into a service agreement.
(You can listen to the entire episode here.)
BECOME PERMANENTLY PROFITABLE TODAY
If you want help streamlining your construction business and making it permanently profitable, then go grab my book, Profit First for Contractors.
You can get it on Amazon. It’s on Kindle. It’s on Audible. It’s everywhere.
Download the free resources and sign up for the free video training when you sign up to receive the PFC Bonus Tool Box.
Make your construction business permanently profitable this year.
IMPROVE YOUR CONFIDENCE AS A CONSTRUCTION BUSINESS OWNER
Do you want to make more money, streamline your construction business, and get your life back?
If the answer is “YES,” then sign up for one of my coaching programs.
Click here and fill out the application. My team will follow up with the next steps.
GET YOUR COPY OF PROFIT FIRST FOR CONTRACTORS
Remember to go buy my book, it’s on Amazon, it’s on Audible, it’s on Kindle, it’s everywhere, Profit First for Contractors.
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