I could write for weeks on the subject of estimating and still not cover it all. If you want a more detailed and structured view of estimating, I encourage you to look at our Profitable Estimating Training Class that you can find here. These articles are only a highlight of that class.
Why do we write these articles? Because if we can provide one idea that saves your bacon on a job you’re going to build, then the effort’s worthwhile. For both of us.
As a construction company owner, you and your sales staff have a choice in how you do your estimating. Some methods work well but unfortunately, many don’t.
If you’ve been in construction more than a day or two, you’ve heard about the WAG (Wild A** Guess) method, the SWAG (Scientific WAG) method, and stick estimating. Stick estimating is fine if you have a lot of time on your hands, but it isn’t any more accurate than unit costing. I talk more about stick estimating and unit cost estimating in this article on our website – Basics in Estimating.
When you are ready to start an estimate, your first priority is to eliminate any and all possible distractions. Item # 1 is turn the phones off. Land line, mobile phone, no difference. These are distractions, turn them off. When you start thinking your way through a job you need to stay with it. If the phone rings, you run the risk of forgetting where you were and can leave off umpteen hours of demotion, framing, finish time or whatever. We talked about that in an earlier article.
Phone calls also keep you from thinking the subs jobs all the way through. Even though you may be getting quotes on everything, the good estimators always mentally walk through the job from top to bottom to be sure they didn’t miss anything, and that includes making sure your sub quotes are reasonable.
Missing labor estimates is expensive. It can happen because of distractions, but in my opinion, this error also comes from estimators who forget to take off the blue leotard with the big S on their chest. They underestimate the amount of time that’s needed for the particular phase of the job they are estimating. I understand that mentality, it’s probably part of being a business owner, but it’ll cost you good money when you’re estimating.
So find a backup person that you can call to doublecheck the time needed to do some particular phase of a job. If you take good pictures of the work areas in question and provide those to your backup, between the two of you, your labor estimate should be pretty close.
And if you’re the company owner, is the time you work on the job on the estimate sheet? If not, it should be. If you set foot on a job, even if it’s just delivering materials to the job site for your crews, and your time isn’t on the estimate sheet, you’re working for nothing. If you swing by to check the job, as you should on a regular basis, that’s an overhead expense and you’re compensated for that in your monthly salary. Howsomeever, if you help your crew stand a wall up, your time should be on the estimate sheet. Look at it like this – if you are temporarily disabled and aren’t available to deliver materials, or help on a job, who will do that work for you? And how will they be paid? If the time isn’t on the estimate sheet, your price isn’t enough to cover that work and you’ll lose money on the job. Everything that gets done on a job should be included in the job cost estimate, regardless of who does the work.
If you think the job through from start to finish, you can come up with an accurate estimate of time for each phase of that job. Thinking is work, but it must be done if you want an accurate estimate.