A survey last fall of kitchen and bath designers stated that 45% of the designers consider staying on budget their top worry. I started selling kitchen and bath remodeling in 1969, and the concerns expressed in the survey have been around for at least that long.
Budget doesn’t need to be a major worry during the design and build of a project if you handle it properly during the sales call. In our book, Profitable Sales; A Contractor’s Guide, we walk through a series of steps that keep you in charge of the sales process. Part of that process is keeping the client on budget.
There are four basic questions you need to ask and get answered on your sales call.
- What do you want to do?
- When do you want to do it?
- Who will make the buying decision?
- What is your budget for this job?
The first question, “What do you want to do?” is fairly easy to get answered, and you want to spend a lot of time here. Keep asking questions until you’re inside their head and know what they want. If you don’t know what they want, in detail, you can’t help them with their budget.
The next question is one of two critical questions that you must have answered if you want to move ahead to a contract. “When do you want to do it?” lets you know if they’re serious about their project. If they won’t give you either a start or completion date, you won’t get a contract because they aren’t serious.
“Who will make the buying decision?” leads into discussing their criteria for picking their contractor. Ask enough questions and you’ll put yourself into the position of being the “Contractor of Choice” that they will then compare everyone else to, and that’s where you want to be. We cover this in detail in the book.
The fourth question is, “What is your budget for this job?”. This is the other critical question that must get answered if you want to make the sale. When you ask the question, don’t wing it. Practice the question ad nauseum so you can ask it in a very straight forward manner. It also must be qualified so that client doesn’t try to dodge the question.
“John, Mary, share with me your budget for this kitchen remodel. What would you like to invest in getting this project built?”
Now the qualifier:
“I’m not asking you if you know what the job will cost. I’m aware you don’t know what it will cost, and I don’t know what it will cost until we complete the design for this project. What I’m asking you for is your budget. What would you like to invest in ___ ?”
What you do next will keep you from worrying about staying on budget during the design process.
About half the time they will give you their budget. If it’s too low and the project can’t be designed for that budget or if they won’t give a budget, it’s time to help them out.
Provide ranges for the job they want. Provide a medium range, a high range, then a low range budget for the project, in that order.
Then, and this step is very important, clearly explain that the design they want and the selections they make will determine the cost of the project. The designer shouldn’t have to worry about designing within the budget, because the design is considered when the budget is set.
Once you know the budget and it fits the job, start talking about a design agreement. If their budget doesn’t fit the job, let them know right away. Be direct but say it kindly because you don’t want to shut the sales door. You can suggest a second meeting so you can return in two or three days with a proposal that better meets their budget range. Sometimes you have to work on the design a bit to make things work but if you show the folks you are genuinely interested in their project, they might be willing to look at alternatives to their original plan.
When the budget is set, it fits their vision, and you have a design agreement, you need to do one more thing to keep the budget and the design together. You must explain to your clients that if they make a change to the job, whether it’s a large change or a small change, it doesn’t matter, the price of the job will change as well. This stage in the process is when the “I want, I want” stuff begins, and if you don’t keep reminding them that changes to the design will change the budget, you’ll have problems.
During the design phase, if you are having a problem keeping within the budget, either your budget ranges were wrong, or they changed the design. If your budget ranges were too low and you underestimated the cost of their design, you need to go back, hat in hand, and explain it. If they changed the design, it’s on them. They’ll need to adjust their budget or go back to the original design.
Make an honest effort to put the project together. If you follow our four steps and it’s a fit, you’ll be able to present your design agreement. If it’s not a fit, or they won’t work with you to iron out the details, excuse yourself and move on. You want to be selling about one in three, so don’t sweat the ones you lose.
Consider this a short summary of Chapter 7 of Profitable Sales, A Contractor’s Guide. Chapter 7 is thirty pages long, explaining how to walk through a sales call, ask questions and get answers. If you follow it, you’ll find that getting your clients to set their budget and stick to it isn’t nearly as hard as many believe. It’s as difficult as you make it.
The knowledge and experience Michael Stone gained in his 60+ years in construction has helped thousands of contractors improve their businesses and their lives. He is the author of the books Markup & Profit Revisited, Profitable Sales, and Estimating Construction Profitably, and is available for one-on-one consultations.
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