I usually learn lessons the hard way. However, when I finally learn them, they’re rooted deep and I’m not likely to repeat my mistakes. When I was a younger contractor, one of the mistakes I made over and over was to visit a renovation/replacement project, speak briefly with the customer, glance in the boiler room, and provide an estimate for a heating system replacement. This was in New York, so the buildings were generally old, with various piping methods and distribution systems. 

My estimates only accounted for what I could see during a quick visit: mistake No. 1. When I started the demo, other issues invariably cropped up. I call this discovery by demolition “doing a destructive analysis.” Sometimes, all the issues aren’t apparent until you pull out the Sawzall.

Maybe the previous contractor piped something wrong. Maybe, once a wall is opened, a section of corroded pipe is uncovered. Or maybe the gas line is right on the cusp of being too small and only a pressure test can confirm if there’s enough gas for the proposed retrofit. Either way, I’d often discover things I hadn’t accounted for in my estimate. I began calling these sneaky little mechanical problems “discoverables.”

Doing right by the customer has always been extremely important to me and, at the time, I thought that meant sticking to my original estimate to replace the heating system despite the growing scope of work. I simply ate the expense of fixing discoverables, lowering my margin on many a project: mistake No. 2. Given how often this occurred, it’s a little surprising that I remained in business.

Now, I know what you’re thinking. You’ve determined that I’m not the brightest crayon in the box. However, consider a few things. This was 20 years ago; the perception of the trades was different. I didn’t think my time carried the value that I now know it has, and many customers saw it that way, too. The perception of our industry has changed. If you’re honest, I’ll bet you’ve eaten the cost of a discoverable at least once in your career. 

My approach is different today, and how I handle estimates and discoverables will depend on who the customer is. Let me explain.

Know Your Customers’ Reactions

I have a friend in New York City named Lorenzo. He emigrated from Italy at 19 years old with $21 in his pocket. Today, he’s a multimillionaire in real estate. 

“Ya see, when ya step into a potential customer’s joint, ya gotta do a little recon, capisce?” he says, waving his calloused hands like he’s orchestrating a symphony. “Politely ask to hit the bathroom and pay attention to the toilet paper, my friend. If it feels like sandpaper, forget about it — they’re pinchin’ pennies. But if they got the good stuff, soft like a cloud, that means they’re ready to shell out some dough.”

It is important to know your customers and their reaction to paying for discoverables. 

When I walk through a job, I bring up the potential issues to the customer. I explain the potential for invisible problems and ask them if they’d prefer those items to be included in the estimate. That way, there are no surprises, and if there are minimal discoverables, the project comes in under budget.

Otherwise, I make them aware that if issues arise, the cost for the project will exceed the estimate. 

Some commercial customers, especially those who know us, want an estimate for a worst-case scenario. Others want the discoverables to remain off the initial estimate in order to get approval from superiors to move forward, opting to handle the hidden issues if or when they arise.

Communicating In-Person Vs. Email/Texts

Speaking of superiors and getting approval, let’s cover communication for a minute. Emails and texts are good for setting a meeting time. They’re horrible for communicating what we found during a mechanical walk-through and getting approval. There is no substitute for walking through the system with the customer. 

On commercial projects, I tell the property manager that I’d like all the decision-makers onsite when we walk through the system initially. For those who can’t be there in person, I’ll insist they join on a video call. This way, we can resolve all inquiries in an hour instead of through 400 emails. If a picture is worth 1,000 words, a walk-through is worth 100,000. 

Having everyone in the same room is also a great time to ask the ownership/management team about their experiences with the system and what the new system would provide in a perfect-world scenario. Little details, such as noises, drips, lack of hot water at various times, dramatic changes in energy expenses, etc., are examples of information that will help you sniff out some of those discoverables. 

Remember, if an issue you uncover with the Sawzall is not a code or safety issue, it’s the customer’s choice to fix or ignore it. If they prefer to delay the inevitable, you need to get that in writing to protect yourself.

Communicating effectively, highlighting potential issues and providing options set you apart from the lowest bidder. They will make the customer acknowledge your expertise so that you’re not bearing the financial burden when unforeseen circumstances arise.