7 Simple Ways Contractors Can Improve Their Estimating
For most contractors estimating is like the center of the universe or the sun, with things like sales, cash flow, profits, job schedules, and payment schedules orbiting around it and depending on it for survival. Here are seven easy to accomplish ways contractors can improve the speed and accuracy of doing estimates. Putting even a few of these in place can change your world!
#1: Separate Costs and quantities
This sound simple but it’s so important. Don't add up the number of 2x4s you need and multiply them by the cost in your head. Instead do this inside your estimate. By doing so you will create a materials list and if prices change updating your estimate will only take minutes.
#2: Get Unit prices from your subcontractors
Do you really need to send your electrician to the job site and wait for him to get back to you to tell you how much he will charge you to install 5 recessed cans on a 3-way switch leg in that Kitchen you are hoping to sell? Assuming you will gut the space most plumbing and electrical work should be easy to list out similar to new construction. By getting unit prices from your subs you can quickly price their work using their numbers. Getting supplies to the space will typically be the only nebulous costs and even those can typically be broken out into easy, somewhat challenging or "worse case scenarios".
#3: Create a materials price book
I bet 20% of the materials you use on the jobs you sell make up 80% of the prices you need to collect to estimate material costs. Make a list of the most common items your company uses and get your suppliers to proactively send you updated pricing for these at least once a month. If they won't do this for you find a new supplier who will. By having this info you can complete most estimates even when all the suppliers are closed for the day or weekend.
#4: Do it in one sitting
If you look at a kitchen tonight but don't get to do the estimate for it until next week how fresh will the details be in your mind? Try to get it done as soon as possible. I found scheduling a specific time slot for getting it done into my schedule helped with this. Otherwise doesn't estimating all too often end up being the red headed step child who gets ignored? Forget or miss one thing and your profits may not be there.
#5: Do your estimates in critical path order
When you do your estimate think through the job in the same order you would build it and document the steps in your estimate in that same order. This helps reduce missing tasks and materials and actually generates an outline for the job's schedule. You can also then share the estimate with your lead carpenter as the critical path to use as he or she builds the job.
#6: Use your smart phone to snap pictures and shoot videos
In addition to sketches and written notes use your smart phone to snap pictures and shoot videos at the job site when you collect the info you need to complete your estimate. For example stand in the middle of the space and shoot a video as you do a 360 spin around the space with your phone's camera. When you sit down to do your estimate you can view the video or pictures to help you remember material details like trim or door styles, and to help prevent forgetting required tasks.
#7: Get off the yellow pad
As I had discussed in this JLC Magazine article the yellow pad can be a great way to get started doing estimates. But, it can also help hold your business and employees back from growing. Consider using a spreadsheet template to assist you. Properly created the spreadsheet will do accurate math for you. Using a spreadsheet you can also create templates that act as checklists for the common job types you estimate over and over again by hand each time.
