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.

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October 10, 2013 6:11 am

Re: Client Background Check “I just had the feeling that something was wrong”. You got it. Often times during the walk through or project discussion meetings you will know if the project will be a “good fit”. That is a PC way of saying a nightmare. Historically I was so organized around getting the job I really never seriously considered passing. Today I always remind myself that I can pass on a project too. If I do take a project that may not meet my standards I draft a payment schedule that brings my exposure to almost zero. The final… Read more »

John B
John B
October 9, 2013 11:20 am

Sales calls and choosing clients: First – If we need to do a background check on a client, their not our client. A formula for success is for YOU to choose who you want to work for and not be chosen. I like to ask a series of qualifying questions with all new clients. Among several:1) What is important to you in hiring contractor? (Btw, if price is their first concern, I decline the job)2) Have you ever hired a contractor? If so, why aren’t you using that contractor on this project? 3) Regarding your last project, what worked and… Read more »

John B
John B
October 9, 2013 7:06 am

I find estimating more a science than an art. I find running our company more an art than science. I find managing our subcontractors both art and science. In most cases, if our sub sends an invoice for additional work, it is due to a change order and we have it covered. If not, we go to the DETAILED estimate they sent us, check it against our scope of work and artfully negotiate. Mostly, it works out. Also, we only use subcontractors that run their business like we run our business; We avoid big train wrecks that way. The exceptions… Read more »

Greg Stine
Greg Stine
October 9, 2013 6:39 am

We just had a situation where a sub charged us $13,000 more than the estimate, there were about $5,000 in extras; however, we were shocked to see the final invoice. So we broke down the invoice against the estimate and made it clear that there were $8,000 of overcharges to which the sub agreed that errors were made. It may seem ridiculous; however, it happens. Being organized, detailed, and professional will always save you money. Also, I have a new employee who I would like to learn estimating, is there an online video tutorial that could walk him through the… Read more »

Jon Bronemann
Jon Bronemann
October 10, 2013 5:32 am
Reply to  Greg Stine

If there isn’t a college or university nearby that offers a degree or even just side courses you could try complying a few old project files, pictures, or maybe even visit that job and compare the estimate to the project. Put them out in the field and do DETAILED ordering of materials. Have them compare their list to that of the job superintendent or lead person. If you are a General Contractor have them start with the CSI Divisions. That pretty much is a checklist from start to finish of a project. Learning estimating is an process. Best done by… Read more »

Abe Degnan
Abe Degnan
October 9, 2013 5:23 am

I’m always amazed when I hear about my colleagues who DON”T get detailed quotes. I can’t believe it! Things that I’d never catch like additional electrical circuits being required, adding extra outlets due to code, new dedicated bathroom GFCI circuits (not just sharing what’s already there for lighting…) thing like that can kill your estimating. Or your professionalism can convince your client that you are the only one prepared well enough to do the job right, on time, and on budget!

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