Free Estimates: Should Contractors Charge for Quotes?
You might have seen your competitors offering free estimates. Now you’re wondering, “Should I offer free estimates, too?”
You can offer free estimates for small, simple jobs where the cost range won’t vary too much. However, they aren’t a good fit for large, complex projects with more considerations and a higher price tag.
Keep reading and find out if free estimates are right for you!
What is a free estimate?
An estimate is a ballpark guess at how much time, effort, and materials it’ll take to finish a job. Because it’s less accurate and more flexible than writing a quote, which has a fixed price, some contractors offer estimates for free.
There are usually three ways to estimate the cost of a project:
- Phone: When the client calls for an estimate, you ask questions about the work and fill out a work request form based on their description of the problem or situation.
- Online: With online booking software like Jobber or Responsibid, clients can send you information about their project, and you can email them back with an estimate.
- Site Assessment: Some jobs require an in-person assessment, where you can see what the work will involve and ask more detailed questions.
Should I offer free estimates?
Whether or not you offer free estimates depends on what works best for your business, your industry, and your clients.
Free estimates are great for small, straightforward projects like washing a window or painting a room. You can assemble these estimates more quickly if you’ve done similar work before.
If it’s a larger project with detailed designs and a large team, you might want to charge for the estimate—for example, if you’re a general contractor overseeing several trades like plumbing and roofers.
READ MORE: Is an estimate a contract?
These are just a few factors that might affect whether or not you charge for estimates:
- The project size and budget
- Your level of experience and hourly pay
- The likelihood of closing the sale
- Whether you’d be working with other companies
- If you need to diagnose a problem before planning the work
- How accurate your estimates are
- How much detail you include in your estimates
- How long it takes to put together an estimate
- Your usual estimate close rate
Why should I give free estimates?
There are several advantages that come with offering free estimates to potential clients:
- You can make a good impression. Free estimates can get your foot in the door and keep your name top of mind—especially when you remember to follow up after sending the estimate!
- You’re more competitive. Offering free estimates sets you apart from competitors who charge a fee for their estimates. It also helps you compete with other businesses who don’t charge for estimates.
- You can use it in marketing. Many companies who offer free estimates use it as a selling point or special promotion, and they mention it in their marketing materials. For example, they might have a Get Free Estimate button on their website.
- You can save time and effort. Since an estimate is just an approximate calculation, it’s easy to make one quickly using a free estimate template. You can settle on final numbers later when the client is ready for a detailed quote—or an invoice when the work is done.
READ MORE: Upsell your services without being pushy
What are the downsides of free estimates?
A free estimate policy does sound good, but there are a few downsides that might make you think twice about offering them:
- You can lower the perception of quality. Some businesses don’t offer free estimates because they think it reduces the value of their services and expertise. If their knowledge is valuable enough, they should be able to charge for it like any other service.
- You could waste time and effort. You won’t be paid for the time it takes to visit the client’s home and discuss the work. There’s also no guarantee that you’ll win the job and the money that comes with it, even after investing several hours of your week.
- You can attract the wrong clients. The best prospects are clients who put more importance on quality than on price. Offering a free estimate can attract clients who care more about spending as little money as possible, which can cut into your profits.
- You could affect client satisfaction. Clients don’t always know the difference between quotes and estimates. They may be upset when they realize they aren’t getting an exact quote and could push you for a more detailed plan.
How much should I charge for estimates?
A quote can cost anywhere from $50 to $1,500, depending on the size and value of the work. Quoting to paint a house will be on the lower end, while renovating the home could be on the higher end.
You can charge a combination of your hourly rate, overhead, and profit margin. Some contractors also charge a fixed amount for estimates, then use 50% of that amount as a project deposit if they win the work.
Remember, estimating a project is part of your expertise. The more complex the job is, the more reason you have to charge—and you should be paid fairly for your time.
Pro Tip: If you’re offering free estimates, include the cost of the estimate in your project price. The client still feels like the estimate was free, but if you win the work, you’ll be paid for the time you spend estimating.
READ MORE: This business turned online estimates into a competitive advantage
Free estimates might not be right for your business. Or you might decide to charge new clients for estimates, but repeat customers get them free. Whatever you do, make sure the client knows whether or not they have to pay.
If you’re charging for estimates, go the extra step and give prospective clients a complete price quote instead. This gives you better accuracy—and a paycheck for the time you’re investing.