How Much Free Work Should You Really Give a Client?

Every contractor knows the trap: you pour hours into an estimate, walk the job with your trades, do all the planning — and then lose the bid to a cheaper guy. So where's the line between free work and paid work?

In this Coaching Cuts episode, Clark tackles one of the questions he gets asked most: how much should you do for free, and when do you start charging? The answer is the pre-construction due diligence line item — and this is how you build it, price it, and sell it.

Clark breaks down:

• What belongs in a free estimate vs. paid due diligence
• How to build a 90% estimate before you ever ask for a dime
• Why the due diligence line item eliminates change orders and protects the client
• The deliverables that make your due diligence worth every dollar — selections, Gantt charts, finalized numbers
• How to get ballpark trade pricing without wasting your subs' time
• The strategic free work (like a surprise Gantt chart) that wins you the job
• How to price due diligence based on the size and complexity of the project
• Why locking a client into due diligence gives you the room to truly impress them

If you're tired of giving away your best work for free and watching jobs walk, this is the episode that draws the line.

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Transcript

Free Work Vs Paid Planning

SPEAKER_00 1:05

Welcome to Contractor Cuts, where we cover the good, the bad, and the ugly of growing a successful contracting company. Welcome to Contractor Cuts. My name is Clark Turner. Thank you so much for joining us again today. So today I'm doing another coaching cuts. Uh, this is one of our episodes where I take a short amount of time and cover one topic that I get asked repeatedly during coaching sessions. So we try to take note of that. And when there are certain things or aspects of what we coach on that are confusing or certain issues that need help, I'll take those and run a coaching cuts episode to where we talk about what you guys are struggling with. So that is what we're covering today. Today we are covering how much free time should I give a client? How much should I spend doing free work on the estimate versus when can I charge? And how do I charge? And what this whole episode is going to be about is charging for your due diligence uh pre-construction line item. Uh, and so how do we sell it? How do we pitch it? It's a really great tool to get paid for the work you're doing, but and also have kind of a line of demarcation between the free work that I do for you and the paid work that we do for you. And so, how do we talk to the client about that? How do we sell that? What's included in it? How much should I price it at? At what point am I gonna give them free work just to try and impress them?

The Due Diligence Line Item

SPEAKER_00 2:24

We're gonna have all of that conversation today. Um, but the main topic is how do we build this due diligent line item? And when do we ask for the first uh payment to start the work on the project? All right, so going back, uh you've probably heard us if you listen to any of the other podcasts. We always talk about this due diligence uh pre-construction line item. It is tenfold the reasons that we use it, that we have it in there. But some of the big reasons are number one, it builds a time that I have to deliver certain deliverables during pre-construction to make sure the job runs well. So I'm promising to the client what they're gonna get. Uh, and so when we start due diligence, A, I'm getting paid, I get a check up front. B, I've got deliverables that I'm getting paid for. And C, at the end of that, I've got my full job planned out and all of the fires that potential fires are being uh extinguished during the due diligence. So it's really setting me up for success, but it's all the stuff that I've I'm like, I'm not gonna spend extra time doing that. You're not paying me for that. Well, no, now they are. Now they're paying us to specifically have a time slot in our schedule to plan out their job before we actually start. During that period, we're gonna do a number of things. And and what the due diligence period consists of is a number of things. And it kind of depends on the size of the job, right? If you got a $10,000 job versus a $2 million bill, those are two totally different pre-construction due diligence periods. So I'm gonna talk about that. But but first and foremost, what the due diligence is, is I have given free estimates up to the spot of good of signing due diligence. So

Building A 90 Percent Estimate

SPEAKER_00 3:59

what should my estimate look like on that? We've got done our desk estimate, hopefully. Then we've gone out, did an on-site estimate, put together revision, sent those back to the client. At that point, I should know how secure and tight my my scope is. Do we have every every uh aspect covered of the project? Is everything on here? Uh, I'm not going through picking out finishes. I'm not going through picking out um different uh specific um whatever the client's looking for or shopping for any sort of uh materials. Uh and really, I'm not even bringing any trades out to the job site yet. I am giving a bid at the to the client for free of here's the total scope, here's the timeline I think it should take, here's the price it's gonna be. Uh, this is a close price, not an exact price. And what we say to clients is most people will get you to sign the quote, making you think that this is this is the finalized quote. For us, this is not the finalized quote. We know that. We know that we bid $13,000 for electrical repairs on this proper property. I also tell the client, I still have to bring my electrician out here who's gonna look at the property and assess it. And it might end up being 14,000 or 12,000. Last time I did a project like this, it was about 13,000 for this replacement. That's the ballpark number we're gonna use. So when I'm building my estimate, I'm not spending hours and hours of my time and all my subs time walking job sites for a job that we end up not getting because they're kicking tires on four project, uh four different uh construction companies. And we're just one of those. We walked it with all of our trades. We spent 10 hours on this bid, and all of a sudden we don't get it. That's what we're eliminating. So I digress. Going back to how we sell and what we do, though, moving a little bit backwards, knowing what we're doing in that, when we're gonna walk, what we're gonna do with crews, how we're gonna build Gantt charts and selection, all the stuff we do during pre-construction. I am building my estimate to a spot that I'm 90 about 90% there. I want my estimate before I ask for due diligence to be a true scope of what we're doing, but just not specifics around uh fit and finish, uh, and maybe not specifics around specialty trades that I'm gonna have to sit with blueprints or bring out to

Deliverables That Reduce Change Orders

SPEAKER_00 6:08

the job site to show them the job to finalize those numbers. Now, what homeowners normally get is that estimate and they sign it and we start going and they get hit with a bunch of change orders. What we do is we we we pitch the due diligence as protection for the client. So what I say when I'm building my estimate, when I'm going through it, I lay out, you know, I'm always laying out the next couple of steps. So when I'm on site, I'm in person, let's say we're doing an addition and it's a $200,000 addition uh on a property. I'm looking at their blueprints, I'm walking the job side, I'm trying to understand how it's gonna affect the rest of the house, where we're tying in, where utilities, I'm doing all that stuff like you do during a normal estimate. I then am telling them, listen, I'm gonna put this together. We're gonna have a scope of work put together that you're gonna be able to go through and make sure everything we talked about is included on there. Once we feel like it's solid and we know everything's covered on it, we're gonna sign uh what we call our pre-construction due diligence period. That is the fee that I'm gonna have on there. And during that due diligence, I'm going to walk all of my trades through this job site. I'm gonna make sure that every dollar that I've tied to what we're doing is spent in the right way and that we don't have any surprise change orders that we can eliminate at this point. I'm also then going to during that due diligence, while I'm walking it with them, I'm gonna revise those that estimate, bring you the numbers if there's anything changing on it, if I missed something, if I didn't realize that we needed a subpanel, if we didn't realize that the plumbing didn't run that way and that there's concrete blocking it, and it's gonna be an extra charge to cut through concrete. Whatever it is, all of that stuff is gonna be finalized during due diligence. And I tell the client, that stuff that I don't plan for, anyways, and no other GC is planning for that all of a sudden it comes up and you realize, oh crap, I didn't have this on the quote. I need to change over to the client. And we're halfway through the project at that point, and you don't have control of your money. So for us, we pull the dollars out of the line items and have a specific time that I'm gonna spend planning this project, walking with my electrician, walking with my plumber, going through to finalize the numbers on the quote. At the same time, during due diligence, we're picking out selections. Everything that you want to buy for this, we're gonna pick out and have a full selections workbook. We're gonna go through that and say, okay, this is the life fixture for the kitchen. Here are the sconces that we're using, here's a chandelier we're using. And we're gonna have the whole thing spelled out for uh what we're purchasing. So then we can finalize the numbers on the bid. That's the the cost of materials is part of the quote. And so when I budgeted $500 for vanity and you pick out a vanity that's 3,000, we need to find, we need to include that into the quote during pre-construction to make sure that what you want and what your budget is match up before we actually break ground and start swinging hammers. So we're doing walking the job site with all of our crews and all of our trades. We are doing a selections workbook, and then finally we're putting together a Gantt chart. I'm laying out every single thing, every single line item on our Gantt chart is laid out when it's gonna happen. I have my start date estimated. I've got every single line item, we're starting with the demo and then the forms, and then like whatever we have that we're gonna do here, every line item has a spot on the Gantt chart and it automatically builds it. If you're in ProStruck 360, if you have all your line items and you start assigning out times or sending it to crews, it's gonna build it out on your Gantt chart. If instead you flip to the Gantt chart view and start saying, okay, demos these days, um, concrete's these days, and you start laying all those out on the Gantt chart. When you start assigning those line items to your crews, it says it on their work order. Start demo on Monday, finish by Thursday, start concrete on Friday, finish by next Thursday. And that way they can see the dates and the times that you expect them to do the work. So when I'm building out that Gantt chart, I'm doing twofold. One, I'm pre I'm prepping my work orders because I'm building out who's doing what when. And I've now, by the time we get out of due diligence, I've got a full Gantt chart that the client can have and take with them and know

Scheduling With Gantt Charts

SPEAKER_00 9:59

this is the tool that we're using to manage. This is what I think is gonna happen. This is gonna change, and I can I can talk to them about that. But by the time they exit due diligence, we've got potentially drawings or architectural renderings if you need those, and those aren't done yet. Uh, we have the all the crews walked and we have all the dollars nailed down to exactly what it's gonna cost. If there's any change orders or increases or decreases in price, at that time, that's when we talk about what the homeowner, make sure that we're ready to finally sign the actual contract of what we're moving forward and the scope that we're doing. So that's gonna be there, the selections, the Gantt chart, really have everything prepped so we can start swinging hammers. At that time, during due diligence, I'm doing all that stuff. I put the numbers together if everything looks good. We sign the finalized contract, we start construction with uh on on the uh planned timeline that we had. If for some reason the client's like, hey, this bid started at 100. After you walked with all your crews, the bid's not at 150. This is a problem. I've explained to them what's going on, we've talked through it. But at that time, we can decide if we're gonna move into construction or not. The client going into pre-construction owes me only the cost of pre-construction. And they aren't signing for the actual construction start date until we have it finalized. And what we say is that estimate converts to a quote. We've locked in the numbers on what we're doing, and so we're we're good to go on um find a final signature on the finalized quote. So that allows us to eliminate those work, the change orders throughout the job, have everything planned out. And I'm also not going shopping and figuring out all the stuff and doing all the stuff for free without getting paid. So some of these things I will start doing ahead of time for free, though.

Strategic Free Work To Win

SPEAKER_00 11:39

And so when do we do that? And again, this is such a tough why why we get so many questions is that so many, there's such an art to this, and it changes per job, right? The what type of scope we're doing, you know, and additions different than just doing a paint job on a house. And you know, doing a bathroom overhaul is different than doing a deck. And so those are all different types of pre-construction. And what we do and what we don't do depends on what's needed. How much do we charge? It depends on what's needed. Do I have seven different trades that I'm walking through here and a huge list of selections that we got to go through and it's an eight-month build? That's going to be a large due diligence. That's gonna be thousands of dollars for due diligence to plan all this stuff out and spend the time doing it. On new construction, on additions, on permitted jobs. We often will start permits during pre-construction due diligence. And that's part of our initial invoice that we send for the work that we're doing and anything we got to spend during that. On the newer builds, on new builds or newer construction or ground up stuff. That's also we might be doing perk tests and other things like that to prep. Meeting with the city might be part of our pre-construction. I'm gonna go sit with the city and see what they're requiring for this build. Um, whatever you need to do to finalize numbers on the job, we can invoice for and do during due diligence, right? So we're building the free work. All the work we got to do before this hammer actually swings is now budgeted, paid for, and a timeline of when and how that's gonna happen. So the client can see, cool, I know by this date I'm gonna have a finalized number. We're gonna be good and locked in. And all, and that makes the entire job run so smoothly because we have everything planned and all of those fires that could have happened are all eliminated. Now there'll still be fires, right? But we're going from 17 fires a week to two fires a week to the things that we didn't see. We open up a wall and there's termites. We can't, we can't pre-plan that. But if we can eliminate all those other paper cuts of change orders that we have to do, the client has a really good experience and they're paying us to plan it and do that, right? So going back to what do we do for free? There are times that if you're trying to sell an estimate, maybe I've built it out, we're at nine, it feels good. I I we don't know their selections yet. I don't really need to meet people out there, but I'm really trying to land this client. One thing that I'm gonna sometimes move over from paid work to free work is I'm gonna go ahead and build them out of gant chart. That is such a huge sales tool when you're trying to uh get a signature on an estimate. So if you know, imagine yourself as a client, I'm bidding your job and two other contractors are bidding your job. I'm quick, I'm on top of it, I do a desk estimate for you. You've seen, I show up with a fully written scope to the side estimate. I revise that. You've got those numbers, they look really good. I'm, you know, 10% higher than the next guy, but the other guy, no detail on his estimate, showed up late, took him a week to get back. I'm might be in the driver's seat, but they're still trying to figure out do they want to go with me or go with the cheaper bid. Right. And so at that point, if I'm trying to land that sale, what I will do is I will get my get in my software and in 10 minutes, build out a Gantt chart with the line items that I've already built out for their estimate. Boom, there, there, there, there, there, save. I'm gonna print that up. I'm gonna attach it to an email and say, hey, just checking in with you. I know that you guys said you wanted an August 1st start timeline. Totally cool. Um, I know like we're getting close to that. And so because of that, I wanted to show you what a Gantt chart would look like starting if we started August 1st or April 1st or whatever it is. Here's my Gantt chart laid out to show you what that job would look like and how long it's gonna take. Um, so I wanted to make sure that if you guys wanted to move forward, I had space on my calendar. So I went ahead and built this out. I could get this and make this work really well timing-wise if you wanted to start August, September. Um, but I wanted to show you uh kind of what the timeline would look like for your job. That's icing on the cake. That's how you start slam dunking on landing those sales. That's getting someone to say, I think I want to use him to, oh my gosh. He literally just a Gantt chart showed up in my inbox. And this contractor over here is amazing because I haven't even heard from the other guys or I haven't, it took them two weeks to get their quotes back. And this guy got me a quote and the following week sent me a Gantt chart. He's working on my project and he hasn't even gotten it yet. Right. So if we can do some of that stuff for free

Ballparks From Trades And Fee Pricing

SPEAKER_00 15:59

to impress them, awesome. Another time that I'll do some of that free work is if I have a certain specialty trade on the job site and I have no clue about the pricing. And even then, I don't like to waste my trades time and uh without paying them. I don't like to ask them to do free work for me. So, because of that, I will, let's say I have an electrical, uh, I don't know what to bid on the electrical. We're doing that addition example that I had, and I don't know where I should be at on electrical. I'm gonna take my plans or my drawings or whatever information I have, I'm gonna call my electrician and say, hey, listen, I need a ballpark. I don't need a finalized number. I'm doing a two-story edition. It's just a master bedroom and bathroom. And then downstairs is gonna be extending the living room. Um, here's kind of the plans, or here's our drawings, or whatever you have so far. Give me a ballpark. If they, if everything looks good, if this is a normal house, that you know, the house was built in 95 and this is that, and here's a photo of the electrical panel. If I can get all that information to my electrician, he's gonna be over the phone, like, yeah, that you're gonna be anywhere from 13 to 15,000 for that. You're gonna be anywhere from 20 to 22,000. Cool. I've got my budget. I'm gonna put that number on my quote. And once I get a signature for due diligence, then I'm gonna bring him out there and spend an hour to two hours planning out everything that we're doing. So I will use my resources and call my electrician and try and hone in those numbers. I'm not just ballparking off, uh, you know, just pulling numbers out of a hat. Uh, I'm usually using previous jobs I've done, my electrical knowledge, other time, you know, maybe some uh chat GPT or something other to try to put some of these numbers together. But we're just trying to get a ballpark to move into due diligence with the client. Um, but we want it as close as possible because I don't want big change orders happening coming out of due diligence where they don't want to do the work with me anymore. So that's the due diligence period. That's what we're trying to sell. What clients are trying to get is all that work for free ahead of time, not on purpose, but they need some of that stuff to make decisions. And so if we have processes of, oh yeah, we absolutely are gonna go shopping and pick out your uh materials. I don't need those emails from Pinterest yet. What I want to do is that's gonna be a due diligence thing is I'm gonna give you a list of stuff to pick out. That's I'm gonna spend hours and hours and hours doing all that stuff once we get moving to due diligence. That's why I charge, you know, $3,500 because the amount of work I got to do. And part of that work is building your selections workbook. So we have a time and place when we do the stuff that the clients want us to do. And as long as I've gotten them accurate numbers and details and we've talked through it, usually they're cool with cutting 3,500 bucks and moving to the next phase with us. And I'm locking them in. They're signing with me. They've got a backdoor exit. If they don't like how due diligence goes, that's a risk I'm willing to take because I know we can impress them during due diligence. I've got 3,500 bucks paying me to now plan out this job. So I've I can have the time, I can really impress them. And at this point, I'm locking them down. I'm going through their selections, I'm going through their gains, I'm going, finalizing their estimate, I'm finding holes that I might have missed previously. I'm spending the time they're paying me for to do my due diligence to make sure that the finalized estimate's done and that when we start the project, that there's no going to be no hiccups, and we're gonna get done quickly and efficiently and according to plan. So that's the due diligence line item. That's the prep that I need you to do. Um, that's going into the pre-construction phase, using that due diligence money to do your pre-construction the right way. But it also gives you a line of demarcation that you can explain to the client. This is free work, this is paid for work, this is what I'll do for free. And then some of that paid for work I might sprinkle in as sales tactics to try and land that client. But for the most part, I try and keep those separate as to what due diligence is and what it's not.

How To Work With Clark

SPEAKER_00 19:43

If you want to talk about this more, if you want to have a deeper conversation about how to build this, go to contractorcuts.com, sign up for a one-on-one with me. I love to chat with you about it. You can email me, Clark at Prostruct360.com. I love to get any emails, have any conversations with you uh and answer any questions you have. If you're interested in talking deeper about coaching, go to contractorcuts.com and set up a coaching call. I've got, I'll hop on a call with you for 30 minutes, hear about your company, tell you about us, see if we're even a good fit for each other, and then we'll put together a game plan as to how we can help you. Uh, we got all different levels of coaching and different things that we offer. So we can fit you into the spot that you need to be and not charge too much, really charge less for where you're at until you get to where you need to be. And let us help you grow down that path and get to the next level. So if you want to hear, see some of this due diligence stuff, dive deeper into how to write estimates and build estimates, or maybe you're really good at that, but we got to refine your growth and your processes to be able to duplicate you, hit me up, contractorcuts.com. Uh, love to talk to you and hopefully we can partner up. All right. Thanks so much. We'll talk to you guys next week. Bye bye.