Episode•July 22, 2024•33 min

EP176: Old vs. New: Transforming Your Estimating and Sales Process

Accept the strength of being weak. Being vulnerable helps us connect with others more deeply, which leads to more kindness and understanding. It also lets us be who we are without worrying about being judged or rejected. Being open and honest about our real feelings and emotions with other people takes a lot of strength. We can break down barriers and build stronger, more meaningful ties with the people around us if we are willing to be vulnerable. In this episode, Brad talks about: The old-way of sales process involving time-consuming estimates and deadbeat clients Introduction to the new Profit Sales System for efficient pre-qualification Importance of asking calibrated questions during discovery calls Charging for on-site consultations to filter out serious clients Benefits of saving time and focusing on high-value projects Download the "No BS Guide to Pre-Qualifying People" for effective pre-qualification Links to Resources: Get the blueprint to create financial freedom & more free time before burnout or bankruptcy happens. A complete Done-With-You Program - Join the Profit Club Join the Free Facebook Group - The Contractor Profit Blueprint Get Paid for Estimates - Free Sales Guide Plan Your Profits - Profit Journal Help us get the word out to other contractors by leaving us a review or sharing our podcast! Hosted on Acast. See acast.com/privacy for more information.

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Transcript

0:08

Contractor's journey to self-mastery requires discipline, integrity, and respect. Welcome to Hammer and Grind. All right, welcome back to the Hammer and Grind podcast. On this episode, we're going to be talking about old versus new, specifically in estimating and sales process, okay? Because this fundamentally changes the entire game. And once you start understanding the new way to do sales and estimating, it completely changes the dynamic of your business. And so we're going to unpack all this on this episode today. Hang out with me to the very end. I promise this is going to be some really, really great information for you that you can start implementing in your business right away and see amazing results. very, very quickly once you start implementing this. So we're talking about the old way versus the new way, specifically in sales. Okay. So let's just lay out everything that the, the current old way of doing things and how probably 90% or better of contractors do this. Okay. So what's the old way? The old way is the lead comes in. It doesn't matter how it comes in. It just the lead comes in. And the first step that we do is we have to call them. Right now, a lot of people have they understand the idea of like pre-qualifying people. Obviously, if someone calls you and they want you to come out tomorrow and you're booked up for six months, like that's a pretty easy thing to, you know, to pre-qualify and say, hey, sorry, we can't get there for six months. We're booked up. That lead gets, you know, thrown out or qualified against and you're on to the next one. That's pretty simple, right? The next hard thing part of that or the next part of that, which is kind of hard to qualify as budget. Now, a lot of guys are just they just straight up ask you what's your budget? You know, I want to get a bathroom model. Great. What's your budget? Well, you know, we're thinking like maybe twenty thousand dollars. Oh, yeah. We don't even do a bathroom for less than 30. You're wasting our time. See you. Right. And so like that. That works for some people. It can work if you ask people their budget. But here's the problem with doing that specific thing is you're instantly creating conflict. And people in general naturally want to avoid conflict. Our brain is wired to avoid conflict of any kind. It's the fight or flight response. Literally, it's the fight or flight response. When you create conflict by asking what's your budget. That's exactly what they're doing. They're having a fight or flight response to that and saying, well, what if I, if I tell him that, you know, we really can afford 30,000 and the project's only going to cost 20,000, then he's just going to charge 30,000 and max out and take all our money. Right. So I don't want to tell him 30. So what I'll do is I'll tell him our budget is 25. And then that way we'll hold back 5,000. And then, you know, we'll go through this whole process, this whole song and dance. where everyone knows what everyone's doing just so we can get to the end and then hopefully come to an agreement. Like that's what a lot of people do if you just straight up ask for the budget. And I would do this because I started asking people, okay, well, like what's your budget? Well, we don't really know. You know, that's why we were getting an estimate. We don't really know what it's going to cost. We're trying to find out. Well, I mean, and I would say, this is what I would say. Well, I get that. You know, we'll definitely be able to give you an estimate, but. You're like, where do you want to be at? What's your budget? Well, we don't really have one. I said, so if this bathroom was $100,000, you'd be okay with that? Well, no, no, we don't want to spend $100,000, you know, probably closer to like maybe 20. And so I would like, like basically beat it out of them. And I would get a number, but it probably wasn't a realistic number. But I would beat it out of them by simply trying to, you know, saying, well, if it's a hundred thousand, like those ridiculous number out and they would say, well, no, not that much. It was a very forced in, uh, not harmonious. Okay. Lack of a better word. It was not a pleasant experience. It just wasn't. And I would get my information, but then I would create a bad taste, right? That's that conflict. And so then you would, you know, you would, that's one way is like asking for their budget. But then some people, some of us, the majority of us don't even ask their budget. We find that out whenever, after we give them the estimate and they ghost us. Okay. So here's the process, the old way lead comes in, we call them, maybe we ask them timeframe. Maybe we ask them, you know, a kind of a budget or scope to make sure we can do it. They fall within a huge range of, you know, sounds like a potentially good project. And then we schedule a time to go look at the job. So we go out there and we drive out there and we spend 20 minutes to an hour or more meeting with them, taking measurements, getting all the information, trying to wow them with our, you know, our, how awesome we are and bring out a bunch of pictures of our portfolio and everything. And we're just going to wow them because, you know, our quality speaks for itself. And once they see these pictures and they talk to me. because I'm an awesome in-person person. You know, when I'm in person, they love me and I can sell jobs and I have a 90% close rate, Brad, and blah, blah, blah, blah, blah. And so I go look at the job and I spend anywhere from one to three hours, you know, in this process so far, depending on how long it takes you to go out there driving, all that stuff. I go back to my office and then I do the estimate. Right now, the estimate can take anywhere from one to eight hours or so, depending on what you're doing. You know, if it's a big project, it can take you a whole day or longer. On average, it's somewhere around, you know, one to two hours to do the actual estimate. So we got one to three hours between, you know, talking to them and going out and look at the job. And then we got one to eight hours doing the estimate. So combined, we have somewhere between two to 10 hours of our time invested. and doing this estimate. And then we send them the estimates. And this is where we find out what I call the deadbeat line. This is where estimates go to rest in peace, right? This is where they go to die. So this is the point of when you will find out that there, that customer is a deadbeat. Now, when I say deadbeat, what I'm lumping into all of this is timeframe doesn't match. The, uh, you know, the budget doesn't match. They don't like you. Something about you doesn't match any, any excuse, right? It could be any excuse whatsoever. It does not work. In other words, they're not going to hire you because of this excuse, right? Very rarely is it come, does it come down to two really good contractors and they just have a hard time deciding which one to go with. And they just flip a coin and that you just happen to lose that. Like that's all that almost never happens. It's always, or I shouldn't say always, it's almost always, you know, a timeframe issue or a budget issue or a trust issue, right? They don't trust you're going to be the one to do it. You know, it could be the professionalism issue with you, whatever. There's lots of reasons, but this is the deadbeat line where we find out that we're not getting the job after we've invested two to 10 hours of our time. Right. And then if we do get a response and they say, Hey, sounds great. Then we send the contract and then we go collect the deposit. Right. And so that's like a typical estimating sales process, if you will, for a contractor. 99.9% of you listening to this probably do that already. That's what you do or some variation of that. Now, here's the part that you're not, haven't even thought about. If you take your value as an owner. And there's a way to calculate this. You can just take your total revenue that you sell in a year and divide it by how much time you spend, right? Doing like the sales task and it will spit out a number. And so for most people, it's going to be somewhere around 200 bucks an hour is your value per hour that you bring to the business. Right. And so this is a good, this is just a good exercise to do by the way, because. If you figure out what your hourly rate is worth, like what value you bring to your business, and it's, let's just say it's 200 bucks an hour. If you do any task less than that, like if you're going and getting materials, what you're doing is you're paying yourself an employee $200 an hour to go get materials. And if you look at that and be like, I would never pay someone $200 an hour to go get materials. Then the light bulb goes off and says, Hey, I can get somebody else to go do materials and only pay them 20 bucks an hour. That's a lot cheaper than 200 bucks an hour. So the premise of that is that you should only be doing the highest level task in your business right now, back to this old versus new. If you're at $200 an hour of value times the two to 10 hours that you waste on clients that you don't get. That means you're costing yourself, you're losing somewhere between $400 and $2,000 per job that you don't sell. That's your opportunity cost. You're losing between $400 and $2,000 based on a two to 10 hour average of time it takes to qualify this lead to do an estimate. Now, if I told you, go and waste $2,000, right? If I called you and said, hey, I'm a client, you know, I'm a potential client. I want a job done. I'm not going to hire you. I just want to waste your time. And you're like, okay, great. Sounds, that sounds perfect. I'll come out there and waste my time, you know, and you spend two, you know,10 hours and it's going to cost you $2,000. Would you ever do that? No. You would not. No right mind person would say, I want to go waste $2,000 or 10 hours of my time. They would not. This is where you're saying, I get it, Brad. It sucks, but that's just a part of doing business. That's just part of it. You got to bake it into your cost. Okay. So now what you're telling me is you're going to penalize your good clients for the bad ones. Because you're going to, you know, if you do, if you look at five jobs a week. and you only sell one of them, that means you had four jobs you didn't sell, right? Let's just say on average, you spent five hours total per estimate that you didn't get. That's times four. That's 20 hours that you wasted in one week with people that you're not going to, that are never going to hire you. And so you're going to penalize the one person by charging them extra to cover the 20 hours you wasted. That's your solution to the problem. You just bake it in there, right? Or if it's less, let's say you only spend two hours. It's still eight hours. Two times four is eight, right? You still wasted eight hours a week. Now, take the money part out of it. We're talking, I'm just talking about money. Take the money out of it. Let's just talk about your time. Who here wants to spend, you know, between two and 10 hours a week or per job or per estimate rather? on people that are never going to hire you. Nobody. That same scenario with five jobs a week and you only sell one of them, that's four jobs times however many hours it takes you on average. Let's just say it's three hours on average. That's four times three. That's 12 hours per week you're lighting on fire and burning. Now, as a business owner, as a contractor, does anybody enjoy wasting their time? You can bake the cost in. Sure. You lose all that time and energy and money going and talking to the bad ones. You just make it up on the good ones. Sure, you make up the money. But what about the time you've lost? You will never get that back ever. I don't know a single contractor that once they start using the new way ever goes back to the old way. And I mean ever because it makes no sense. So let's unpack this new way that I call the profit sales system. The lead comes in just like before. We're going to get on a call just like before, except this is a different call. The first thing we're going to do is we're going to simply ask them for some pictures. Take two to three pictures of your project. Let's use a bathroom as an example. They can go and take a picture or two of their bathroom. I don't need super detailed pictures. I just need to be able to see the space. And no, if we're talking about a typical five by eight hall, you know, hallway bathroom, or if we're talking about this grandiose master bathroom, it's 500 square feet. I just need some pictures to have a basic starting point and that's it. Now I will say this. You do have to have a little bit of experience in actual doing the work. If you're brand new, you just started your business yesterday and you've never done a bathroom remodel. You're going to have a very difficult time because you have nothing to compare it to. You don't know how much things cost, right? So you have to have a little bit of experience, but you don't have to have a lot, just a little bit. And so we're going to send us some pictures. We're going to schedule a time where we sit down on the phone. Hopefully you're sitting down. We're going to call them on the phone and we're going to have a conversation with them. Right. This is what we call a discovery call because we're going to try and discover every single thing about their project, all the objections, all the main objections, everything that's going to be the biggest problems on this call. And this call can take anywhere from 20 minutes to an hour, depending on the size of the project. On average, it's about 30 minutes per call. OK, so up until this point on this call, we've only invested about 30 minutes on average. On this call, we're going to ask them some questions. We're going to ask them some very specific calibrated questions. We're going to connect with them. We're going to understand the reason why they're doing this. We're going to use effective communication. We're going to use all the tools of the trade to figure out. what they're doing, why they're doing it, who's wanting to do it, how they want to do it, what the main issues are, what problems this is going to solve for them, and we're going to figure out what their budget is without asking them what their budget is. That may seem like a lot, and it is. However, it's very simple to replicate. Okay. Hey, just a quick timeout

15:31

from the show. If you're a frustrated contractor who's dealing with low profit margins, stuck working on the tools every day, or doing free estimates for people who are never going to hire you in the first place, I invite you to my private contractor community, The Profit Club, where contractors just like you are adding two to three times more profit each year without producing any more jobs and finally getting completely off the tools to never do another free estimate again. So if you're ready to increase your profits, stop doing free estimates and get off the tools, then all you have to do is click the link in the show notes to learn more about the Profit Club and see how it can easily two to three times the cash in your pocket, give you a proven sales process that will convert more jobs with ease and get you off the tools once and for all. And the best part is you can do all of this without having to produce more jobs than you currently are. Click the link to learn more. Now let's get back to the show.

16:24

So we asked these specific nine questions and not just nine questions, but there's very specific nine questions that we ask. And I'll put a link to the show notes where you can get a copy of my guide, the No BS Guide to Pre-Qualifying People, basically, to eliminate. This is the process that we do on this call that I'm talking about right now, the discovery call. Okay, we're going to ask them questions. We're going to ask them things like, how long you been thinking about doing this project? We're going to ask them questions like, What's got you excited to do it now? What's changed, right? We're going to ask them questions like, where are you at in this process? Have you done any research? Have you looked at, picked out materials? Have you talked to other contractors? We're going to ask them questions, you know, like, is there, who else is excited about this? You know, besides you and I, who else is excited about this project, right? We're going to ask them questions like, have you ever done a project like this before? You know, and how that experience was. We're asking these questions in order to get some key information. Okay. These questions, when I say they're calibrated, I mean, they're very purpose, very purposefully written in order to get information that we need, crucial information. So we ask these questions and we get a little bit of scope, you know, scope of work. What are you wanting to do in here? We're not asking them what color tile they want, what size they want, you know, what finish they, we're not asking any of that stuff. We're not asking, we're not picking out selections. We're not getting details. We're not even asking them like if they want, you know, granite countertops or if they want cultured marble. We're not asking them any of that stuff. All we're doing is trying to get a basic information, enough information that we can spit out a ballpark price in order to find out what their budget is. Now, this is the secret. This is, this is the main secret right here. This is the meat and potatoes. The whole reason you give a ballpark price. It is not to give them an exact price. It actually has nothing to do with what the actual estimate price is going to be. And this is where a lot of guys screw this up. Now, if I just said, I'm looking to have a bathroom remodel done, what does something like that cost? Right? The first response, every contractor says, I would need to see it in person before I can give you a price. Because you're scared to death that you're going to tell them the wrong price is too low and then you're going to put your foot in your mouth and then you're going to be screwed. That is not what we're doing here. We're not giving them a price that we're going to be held accountable to. At least not to that degree. What we're doing here is just giving them examples of what things other projects like this have cost. That's it. We're not telling them that their project is going to be this much. we're telling them what other projects that were similar cost. And we're using that as evidence for one, that we've actually done these projects and two, that other people have paid us this much to do these projects. So an example would be. You know, how much if you came up to me and you said, hey, Brad, I'm thinking about getting a bathroom remodel. And I'm just curious, like, what do we need to budget for something like that? I may ask you a few questions. OK, is this a you know, is this like a master bath or a hall bath? It's a it's a master. OK, are you wanting to like completely gut the whole thing and start over? Yeah, we want to do a complete gut start over. Awesome. Is it going to have like a walk in shower or a tub, separate tub? No, we just want to walk in tile shower, you know, double vanity tile floor. The basic stuff. Perfect. So if, you know, we've done projects like this and on the high end, like the super expensive ones that we've done for a master bathroom has, have been as much as $60,000. And we've done some very basic, like it's all brand new, but it's very conservative in terms of selections. It's the very basic. And, you know, we've done those for as little as $20,000. That's it. 60 to 20. A $40,000 spread between the pricing. And you're thinking, well, that's not an estimate. There's no way, Brad. That's not an estimate. That's not an estimate, Brad. That's not even close. Yeah. That's the whole point. Sorry, my thing got stuck. That's the whole point. We're not giving them an estimate. We're giving them a ballpark. Why do we do that? Because when we give that number, it now allows them to give us their number. That's the whole point of it. We can say 60 to 20. Is that what you were thinking? Actually, yes. We were thinking it would be somewhere around 25,30. Perfect. That's a healthy budget, right? We can definitely get you something for that price range,25 to 30. No problem. If they say, no, we thought we could do it for 10,000. Oh, that's quite a bit difference. How did you come up with that number? Oh, we watched HGTV and they told us that. Oh, okay. You've never actually done one in real life. No, we haven't. Oh, okay. Yeah, that's going to be a little bit low. There's no way we can do what we talked about for $10,000. $20,000 would be on the low end, the very low end. You know, we're $10,000 apart. I don't see how we can get anywhere closer. Is that going to be a deal breaker? Yeah, our top of the line budget is $15,000. There's no way we can go more than $15,000. Yeah, unfortunately, there's, you know, I don't see any way that we could do this for 15 and 20 is really pushing it. So, you know, it sounds like we're not going to be able to help you with this project. Okay, we'll find someone else. Great. Have a nice day. I've wasted 30 minutes of my time. Right. That's on the that's on the no end. On the yes end,60 to 20. Okay, yeah, that's, you know, we were thinking it was gonna be 25 or 30. Awesome. Yeah. I mean, that's, you know, we can definitely get you a nice bathroom for 2530. It's a healthy budget. Absolutely love to do that for you. Perfect. What do you think we should do next? Well, I think we need to get you out here to look at it and give us a firm price. Absolutely. I'd love to. Thanks for inviting me out there. Now, here's the next part of the step. This is the onsite consultation. From this point on, we're now getting paid to do this because we're not going out there for free. Right. What we've also done is move the deadbeat line up to the phone call. See, in the old way, the deadbeat line was after we sent the estimate. Now the deadbeat line gets moved up to the phone call because if they're not willing to, you know, pay that much on a phone call, then we don't need to go forward. It's over. We're done. We've accelerated the deadbeat discovery. Now, this is the part where people get hung up. Brad, no one's going to charge. You know, I can't charge for estimates. If I charge for estimates, I'm going to get laughed out of the, out of the city and everyone's, you know, I'll never, I'll go out, I'll go bankrupt, Brad. It's just not possible. Okay, fine. First of all, complete limited belief, scarcity, mindset, head trash, bullshit, completely. You've never done it and you don't know how to do it. So how can you say it won't work? Well, I just know it won't work. No, you don't. That's just you. not being open-minded to trying new things. It's you being stuck in the old way of doing it. It does work because we're not just charging people for estimates here, guys. If someone calls and says, hey, we'd like to get a bathroom remodel. Can you come out and give us an estimate? Yeah, we can do that. It's 500 bucks. What? 500 bucks to give us an estimate? Yeah. Well, I'm not doing it. I've never heard of that. I'm not doing that. Okay, well, too bad. That's how you picture it going in your head. That is absolutely the farthest possible way from how we do it. That's not how you do it. You're not just charging to do an estimate. Anybody can do that. We're doing an on-site consultation. We're actually going out there and we're bringing in designs and we're bringing materials and we're going to consult with you and we're going to talk about this project and we're going to answer any questions you have and we're going to talk through the design. I might even include a design in that process. All of this is a paid consultation. You're paying us to go out there and give you this information, which happens to also include an estimate. Right. But that's not what that's not what they're paying us for. They're paying us for our expertise. And we've already qualified them on the discovery call. So now at this point, they're paying us to go out there. Right. And if they're willing to pay a small investment of two hundred fifty to five thousand, depending on the size of the project, then they are very, very qualified buyers. At this point, they're ninety five percent sold. Right now I'm getting paid to go out there. And here's the crazy thing. When someone pays you, when you charge a consultation, you will feel obligated to want to give them more attention because they're paying you for it. Anybody who has a, you know, normal value base and, you know, morality and integrity and all that stuff, they're not just going to try and take people's money, right? We're talking about good, good contractors here. We're not talking about the crappy ones. Good conch, good conscious. good natured people are not just trying to collect money for their time and they don't care if they get the job. Because any good contractor would much rather have a 20,50,80,100, $200,000 project than collect, you know,500 or $1,000. We all want the big project. But when you're stacking up estimates after estimates and you're doing three to five a day or 10 a day, however, you're just going from one to the next. You're just there to get measurements and get out, get to the next one, get measurements, get out, get to the next one because you have too many of them and you don't have enough time. Whenever you pre-qualify them, you're not going to look at those five estimates. Now you only have one or maybe two estimates per week versus the five or 10 you had before. Now we've automatically reduced the amount of time that we're spending. And now because we're getting paid for it, we're actually going to invest more time in that. consultation. So we're going to give our best to our clients because they're paying us. So this is true that whenever your clients pay you, they actually get a better experience because they're getting the better version of you because you will feel obligated to help them. It's a win-win scenario for everyone. This is proven science and scientific psychology. All of this has been proven, you know, trust me, bro. but realistically you can go research human behavior and this has all been proven to be true. When people pay more for something, they believe it has, they perceive it as having more value. There's lots of tests and stuff that have been done with this. This is, this is proven science. Okay. So they're paying you, you go out there, you do the estimate and all you're doing the estimate now is to dial in that number to give them the final, you know, budget number. the final estimate, they've already approved it because they said 25 to 30 was in their range. You come back at 20, you know,24,000 for their project and they say, good to go. Where do we sign up? Right. You've eliminated, you know, all of this extra time that you've spent by not going out and with people that aren't going to hire you in the first place. And by, you know, not even, uh, only doing the jobs that you're looking at the jobs that you're going to do. You've eliminated all the time, right? So this is the new way, guys. If you don't adopt this into your business, you are literally burning thousands of dollars every week and hundreds of hours of your time a year. I have one client of mine who's a landscaper. He's been on the podcast. His name is Luke. He owns a landscaping company in Wisconsin. a very successful one. And after he implemented the sales process into his business, he saved two months of his time in one year. So over a 12 month period, he literally saved two months of his time, working days, eight hours a day, times however many days, you know, they worked in a month. He literally saved two months of his time by implementing this process. Who here would not like to have an extra two months out of a year to work on their business, to only deal with the best of the best clients? The other benefit of this process is that you don't ever have to deal with the bad clients because you're going to learn how to look for the red flags, right? I know all of you listening to this have gone out to a job. And as soon as you got there and you rolled up and you're like, holy crap, what did I get myself into? And then you go to the door. And you ring it and sure enough, it's the nightmare, right? It's the hoarder house or whatever. And all of a sudden you're like, I got to get out of here as fast as possible. You eliminate all of that, or at least a good majority. There's some, there's some people that can squeak through, right? That have all of the, say all the right things, but it's very, very minimal. This process will save you on average 10 hours a week. And if you incorporate that into a dollar amount, that's going to end up saving you about, you know, $2,000 or so per week of your value added to your business. Guys, there's no better system than to pre-qualify people over the phone before you go out there, but you have to do it the right way. And that is what the profit sales system does. It teaches you exactly how to do this. And I have the free download that you guys can get. I'll put the link in the show notes. You can go download it. It's the no BS guide to pre-qualifying people, right? How to eliminate tire kickers and BSers, right? It's basically, it's going to keep you from wasting your time with these people. Go to the show notes, download the guide, collect it, sign up for it, read it, whatever. Download it, print it out, read it, implement it in your business. Now, here's the one caveat. If you don't practice this process, if you don't practice the questions, if you don't role play with people, you're not going to be good at it. This is no different than learning a new skill set. It's no different than learning how to ride a bike. You have to practice this. And this is where it gets people tripped up. They just want to take this and they just want a script. They just read a script and everything works. That's not how sales works. Sales is not linear process. It doesn't go 1,2,3,4,5,6,7,8,9,10. It's all over the place. Every person you talk to is different. What I help contractors do is understand how to communicate with different personality types, how to look for the red flags, how to use specific word tracks in different locations. Right. This is a skill. You have to develop it. So you have to practice. If you guys want help with this, if you want to help implementing this process into your business, you can basically duplicate it into your right into your business. I'll get you to help you get it set up and help you get on the way to eliminating all of the deadbeats and all of the BS and time wasting you do in your business. Just reach out to me. I'll be more than happy to. talk to you and share with you what that looks like. Guys, thanks for hanging out with me today. Please, you know, please be open-minded and try to implement this in your business. It will change your life. I promise you it will. You know where to find me on the socials. Just search for the Hammer and Grind Podcast. And until next time, remember, profit is not a dirty word.