Blunders, mistakes, screwups, whatever. I could write for a month on the ones I’ve made over the years estimating jobs. I’d like to share some things I’ve learned that you might want to consider if you want to improve your estimating accuracy.
Estimating is important. The whole purpose of an estimate is to have a starting point on pricing that job. If you estimate too low, your price will be too low, and you’ll pay more in job costs than you expected. Those higher job costs will come straight out of your profit. If you estimate too high, you’ve made it even harder to sell that job.
I think the biggest mistake that gets most estimators in trouble is not bothering to get written quotes from subs and/or suppliers. You should get a written quote on all items over $300. That practice, followed religiously, will reduce your error factor considerably.
When you look back on jobs you’ve done, were you ever surprised by an electrician’s invoice of $850 when you estimated $350 for the same work? You can argue with the electrician and call them names, but it’s probably your fault and you’ll still have to pay the bill. Wouldn’t it have been smarter for you to have asked what they would charge instead of guessing?
Many of our coaching clients over the last 15 years have developed the discipline of getting written quotes for their estimates, and their accuracy has improved immediately. And that means they became more profitable as well.
Make sure you have an understanding with your supplier or subcontractor that when they give you a quote, they’ll honor it. No surprises from either one of you – you’ll give them an accurate description of the work to be done, and they give you an accurate quote that they will honor.
I’ve had estimators tell me they don’t have time to get quotes on everything over $300 on one job, let alone the four or five jobs that are sitting on their desk waiting to be done.
Try this. Instead of waiting 3 or 4 days for your plumber or electrician to find the time to drive by the job site and give you a quote on the work, why not take detailed pictures of the project, write a detailed description of the work to be done, and email it to the sub? My coaching clients who’ve done this tell me they get their quotes back in one to two days. You have to have a pretty good idea of what the sub will look for and what they need to know, but hey, that’s why you were hired to be an estimator or salesperson.
If you’re having a hard time getting your subs to provide a quote, are you treating them fairly? They should be promised at least one out of every three quoted jobs that you sell. Don’t use them for “free estimates”. When you show a commitment to them by hiring them to build your jobs, you’ll find they are more willing to help you estimate those jobs so you can make the sale.
Every day, every one of us is allotted the exact same amount of time. What we do with that time determines how successful we become and how much money we make. Spend your time creating more accurate estimates and you’ll come out ahead.