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  1. #1
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    Jan. 4, 2008
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    Default How to Decline a Client

    So, while expanding the family business, we realize we have to start picking and choosing the best clients and houses to remodel which will turn a profit. My father, the owner of the company, has spread himself very thin trying to please everyone and his profit margin has starting shrinking. Therefore, he has decided the time is NOW to start refusing certain clients where he cannot see making a worthwhile profit.

    My question is, if you were a customer inquiring about getting a remodel on your house, and the company has come out and done a walk through with you and discussed your plans and your budget, how would you prefer they turned you away? Would you want to know on that initial run through? Would you want a follow up email, phone call, etc. How do we decline in the most polite way? My father tends to be very blunt and I feel that it can come of harsh, since we never want to alienate a potential client in the future, who knows their situation may change at some point.

    Thanks for the advice. Sorry for the wordiness.



  2. #2
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    Jun. 24, 2004
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    Default

    Are they being declined because of money issues? Don't you just give them a bid and then if they can't afford it, THEY turn you down?
    Otherwise, I would use whatever means of communication you used up to this point, whether phone or email (although a phone call is probably nicer and more personal.)
    A friend told me I was delusional. I almost fell off my unicorn.



  3. #3
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    Be honest. I'd rather hear "Look, there just isn't enough profit for me in this - I'm going to send you to x, who I do recommend, who can help you out with this one."

    I've had to fire clients before. It's not fun, I get it. And you do run the risk of passing them on to other people and them "not coming back". That's why the honesty policy is helpful. It may sting, but I'd rather know up front so that if I have a bigger budget, I may come back. It also communicates to me that you value your time, and that I probably should too.

    I had to tell one client that they were better off getting a design student or one of those $99 services to design their logo, because they were unwilling to listen to research and expertise...and didn't want to pay for it (they just wanted a pretty graphic). We potentially walked away from thousands in other advertising work, but it was worth it to maintain our integrity. Had I not told them the truth and walked away, they would have continued to not value our time...bad juju all the way around.


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  4. #4
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    Default

    Well the issue is that my Dad can spend up to nearly 4-5 hours of unpaid time writing up a detailed quote for a person that ultimately does not have the budget for the remodel. So yes, what I am looking for is a polite but to the point way to let them know that we are not interested in providing a quote because it is a "waste of time". Obviously we wouldn't say the waste of time part.

    My dad has usually just said something to the likes of I cannot see a profit in the job, but I appreciate your interest, if anything changes or you have questions don't hesitate to ask, etc, etc.


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  5. #5
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    Default

    How does he find out the budget?



  6. #6
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    Default

    Well when he meets with them he talks to them about what they want, and their budget it for it. With over 30 years in the business, once he does a walk around the house he can figure out what the actual cost will be roughly in his head. At that point he can figure out that if the budget they wish to spend is $9,000 and after walking around he has calculated $23,000 then they are pretty far apart. But if the budgets are close, he goes home and does a very detailed quote with explanations on the costs and then presents that to them for review. The detailed quote is what can take 4-5 hours of his time with sketching, etc.

    The reason he has found himself at this point is that he has a hard time telling people to their face that the budget is too far apart, and that they probably won't be a good match. So he tells them he will make a quote, and then he gets home and regrets telling them that, and then because he is an honest businessman he actually does make the quote and present it to them and they realize oops, we are far apart and we need to look at a different company.

    I realize this has a lot to do with my dad needing to stop being the nice guy. But as my job load increases, I would like to be able to do this part for him.



  7. #7
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    Sep. 24, 2004
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    Default

    Raise his price... Throw out a high enough number and if they are still interested, keep working.


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  8. #8
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    Nov. 2, 2001
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    In Trouble with Dad...
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    Sorry, the schedule is full right now, we can't fit you in.
    Quote Originally Posted by Mozart View Post
    Personally, I think the moderate use of shock collars in training humans should be allowed.


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  9. #9
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    Default

    Quote Originally Posted by Alagirl View Post
    Sorry, the schedule is full right now, we can't fit you in.
    Well, that would be nice, but why did he go out to see the house in the first place if the schedule is so full?

    I'm guessing the best policy is just to tell the truth, I just find it sort of harsh to tell a client, I can't make a profit on this job, sorry.



  10. #10
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    Sep. 2, 2005
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    Default

    I guess I am confused by how you are asking the question.

    You want your father to stop spending time putting together quotes? Or you want you father to not offer prices that will not make you enough profit?

    They are two different things.

    If the project is too small for your overhead then simply do as so many have said, price it so you will make a profit. If the person uses you, you will make money. Most likely they will not use you because they will find someone cheaper. No reason to say 'sorry we can not do your project there is no profit in it'. That is just crazy.
    Price it to make a profit, if you get the work you have profit.

    Spending unpaid time doing quotes is part of any work. It is going to happen.


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  11. #11
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    Quote Originally Posted by Bedazzle View Post
    Well, that would be nice, but why did he go out to see the house in the first place if the schedule is so full?

    I'm guessing the best policy is just to tell the truth, I just find it sort of harsh to tell a client, I can't make a profit on this job, sorry.
    well, you can only judge if the job is big or little when you are going out and look at it.
    Sometimes people think it's just a coat of paint, when in reality the place needs to be bulldozed and rebuild....
    (and raising the prices over all would probably not hurt either)

    Ok, then, how about this: this job is a little bigger than what we can take on at this time within a reasonable time frame. Check with X or Y (but make sure those are reputable companies, and not what keeps Mike Holmes in business! )
    Quote Originally Posted by Mozart View Post
    Personally, I think the moderate use of shock collars in training humans should be allowed.



  12. #12
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    Apr. 2, 2003
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    Default

    Can your father train someone else to do a basic walkthrough and a more basic estimate? It seems to me that if the father is the issue, then training someone else, maybe an intern even, to go out to make the quotes for $10/hr instead of whatever your dad's time is worth, is a worthy investment.

    When we got our bathroom estimated, the contractor himself came out and scribbled notes and I got an email from what sounded like his office manager with the quote drawn up with specific rough prices. If he can find someone to take his notes and type up a quote it seems like he'd save a lot of time-- or he just needs to be able to say "I'm sorry, but I see more work here than I think you've anticipated. I will suggest that you talk to X who may be better able to help with your remodel" and then move on.

    Not enough profit is crap-- if you run a business then there needs to be profit built into your cost estimate. The prices should be the same for everyone so if the budget is far apart, he just needs to say I really think that this is more work than you were envisioning, here is the number of someone who may be able to better meet your needs. And walk out.


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  13. #13
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    Jan. 4, 2008
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    Default

    Yes, sometimes you can only tell if the job will be profitable when you are there. Other times when you pull up an auditors report you can see the house was built in 1925, it hasn't had substantial upgrades since then and you know you need to back away slowly.

    And yet, at other times you may think, oh wow this person only wants a small bathroom remodeled - not worth my time, but you get out at the house and realize, its an easy job, might only take 15 labor hours and the profit will be quite large.

    It's very heartbreaking to see my Dad revise someones quote for over 15-20 hours of time going over every detail for them, cutting costs, etc and then all he has done is cut his profit margin to tiddly winks. Then they decide, ehhh we would rather go with the company that can do it for $500 less, thanks!


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  14. #14
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    Default

    Quote Originally Posted by soloudinhere View Post
    Can your father train someone else to do a basic walkthrough and a more basic estimate? It seems to me that if the father is the issue, then training someone else, maybe an intern even, to go out to make the quotes for $10/hr instead of whatever your dad's time is worth, is a worthy investment.
    Ahh! I like your thinking. This has been suggested, and may actually happen here in the future. Now if my Dad wasn't such a control freak....


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  15. #15
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    Quote Originally Posted by Bedazzle View Post
    Ahh! I like your thinking. This has been suggested, and may actually happen here in the future. Now if my Dad wasn't such a control freak....
    I should add that my quote on my bathroom was not negotiable. We were able to reduce some of the work, but we were presented with exactly what each item cost and we decided what we wanted to do and not do from there.

    I strongly suggest that your father go out, scribble the notes with details about what he is thinking, and pay an intern or office person to go pull the house info etc and do the grunt work on the quote.



  16. #16
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    Quote Originally Posted by soloudinhere View Post
    I should add that my quote on my bathroom was not negotiable. We were able to reduce some of the work, but we were presented with exactly what each item cost and we decided what we wanted to do and not do from there.

    I strongly suggest that your father go out, scribble the notes with details about what he is thinking, and pay an intern or office person to go pull the house info etc and do the grunt work on the quote.
    I really do like that idea. And no, I don't want my Dad to stop doing any of the following, unless of course it was being transferred to someone else doing it.

    I am asking how to politely decline customers that we know just won't be a fit. And how to do that after meeting them in person to see their house, but before time has been spent on putting together a quote.


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  17. #17
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    What about telling them what they CAN do for that budget, if he knows...like...

    So often times I get people who want a specific thing...huge ideas...with a budget of like $5k. And I have to say, no, that won't work...but here's a way we can do x or y within your budget...and then maybe once that is proven to work we can add on z or abc....and so on and so forth?


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  18. #18
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    Apr. 1, 2003
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    Quote Originally Posted by Bedazzle View Post
    Well the issue is that my Dad can spend up to nearly 4-5 hours of unpaid time writing up a detailed quote for a person that ultimately does not have the budget for the remodel. So yes, what I am looking for is a polite but to the point way to let them know that we are not interested in providing a quote because it is a "waste of time". Obviously we wouldn't say the waste of time part.

    My dad has usually just said something to the likes of I cannot see a profit in the job, but I appreciate your interest, if anything changes or you have questions don't hesitate to ask, etc, etc.
    As soon as he realizes they don't have the budget, or has a general idea of cost. he needs to spell it out - I'd do it during the walkthru..... something like this "What you are describing will probably cost around "Y" - is that within your budget?

    (And he needs to inflate his "X" estimate into "Y" as most people want to hear a "Not to Exceed" cost - so add some money in for "risk" of the unknown - like leaky pipes, rotten wood, etc.)


    Thus he's giving them a ballpark figure (someone like myself may have no idea and would need to change my idea on what needs to get done OR take less quality) and they change decrewase the work scope (e.g. update only the bathroom not also adding a porch) or if they insist that means they will take lesser quality and he can refer them to a lesser qualified or newbee in the business. Thus he's being honest and providing them with a reputable reference at the same time, so not leaving them hanging.

    There are also client that won't mix - for example those my SO calls slum lords...who want to do everything as cheaply as possible - even if it won't work well (guess who gets the blame even if he tells them that before hand) - or doesn't meet code. SO just tells them he can't/won't do that since it's not worth risking his license.
    Sandy in Fla.



  19. #19
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    Qualify them over the phone, "What kind of work are you looking to have done?," then draw them out with some pointed questions to get specifics, as much as a layperson can give, "What is your budget?" once they reply Dad can figure out if they have a realistic view of costs and from the info they give and his past experience Dad can probably tell if what they want will fit in the budget they have and tell them so, "I'm sorry but what you are talking about will be at least $$$, which seems to be over your budget", or "well that sounds like we can make it work, when is it convenient for me to come take a look?". 10-15 minutes on the phone can save a lot of time in the long run.
    "They spend 11 months stuggling to live, and 25 years trying to die" my farrier

    "They are dangerous on both ends and crafty in the middle"



  20. #20
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    Sep. 30, 2003
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    What is your dad starts the quote process and as soon as he determines that it looks like it is going to be over their budget he gives the client a call and says something to the effect of. "I am working on the quote for your x project and you indicated that your budget is $y. It is looking like this job is going to be considerably more than that. Is there room for your budget to increase? If not I won't proceed any further with the quote."


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