Your construction estimates make a significant influence on your company’s overall performance.
Estimating may be dangerous: underestimate and you may win the project, but you will lose too much money to be profitable. Overestimate and you may find yourself out of the running for the project.
Estimators are continually walking a tight line. The problem is to provide estimates that are both lucrative and “fair” to the customer. We have a few staff members who have extensive experience in the estimating sector here at Counterfire. Here are some of their ideas for increasing construction estimates:
Your construction estimates may make or break your company’s overall performance.
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Estimating is riddled with pitfalls: underestimate and you may win the project, but you will lose too much money to be profitable. If you overestimate your abilities, you may find yourself out of the running for the project.
Estimators are always walking a narrow line. The problem is to provide estimates that are both lucrative and “fair” to the customer. We have a few estimated veterans on our staff at Counterfire. Here are some of their ideas for improving construction takeoff:
Pricing. After calculating your costs, you apply a profit margin and arrive at your final amount for the customer. This figure is crucial for any estimate; will it be high in comparison to other bids? Is it going to be low? This may be appealing to customers, but it may leave your firm struggling to earn a profit.
Improving your construction estimates may be accomplished by examining ways to improve in each of these three areas. Fortunately, you now have more options than ever before for establishing a quality estimate.
Increasing estimation precision
How do you presently collect all of the information required to provide an accurate estimate? Your technique has the potential to make a significant difference. For example, if you’re still counting takeoffs using printed drawings and a highlighter, you’re leaving yourself up to errors, even if you’re an experienced estimator.
Manual counts are susceptible to human mistakes because, as the classic saying goes, “to err is human.” All it takes is a minor distraction, such as your phone ringing or someone peering through your door and asking a question while you’re counting. The next thing you know, you’ve jotted down the erroneous amount or failed to count a whole region.
While many estimators still count by hand, technological advancements provide you with options. For example, automated takeoff software such as Counterfire allows you to upload designs to the application (no paper necessary) and then follow the process to have takeoffs correctly counted and documented.
Checking your work is another key aspect of correctness. Manual counting is time-consuming and prone to inaccuracy. Then, if there are considerable disparities between your first and second manual counts, you should definitely perform a third manual count just to be sure. As a result, you may wind up with a shifting target.
Takeoff software also includes checking tools, allowing you to simply identify if anything was missed in your original count. This improves both your accuracy and your efficiency in completing the estimate.
Aside from takeoffs, the following typical elements should be verified for accuracy:
Have sales tax obligations been incorporated, or is this project exempt from sales tax?
Pricing breakdown – Have you completed the pricing plan / structured your price in accordance with your client’s specifications?
Should the bid price include any financial allowances?
Insurance – Does the project need specific insurance and have you factored it into the cost?
Have you taken any security deposits or performance bonds into consideration?
Is it your job to provide all equipment, or will the owner provide some?
Materials – Have you gotten proper pricing from your suppliers?
Changes – Have you included a clause for any change orders or extras that the project owner may think of throughout the project’s course?
Temporary power – Who is in charge of providing and paying for temporary electricity?
Enhancing estimate speed
Tender deadlines are prevalent in the construction industry. One of the most important tasks of an estimator is to be aware of deadlines and to guarantee that all work is finished on time so that tenders can be filed on time. Outside of formal tendering, having a project estimate delivered in early can make or break a client’s decision on which firm to deal with.
It may appear straightforward, but there may be a lot of moving components to handle, which might effect punctuality. Estimators frequently encounter the following roadblocks:
Specifications are vague. This may necessitate the estimator seeking clarification or submitting a formal RFI (Request for Information) to the customer. Clients are sometimes slow to respond, which might cause the estimate to be delayed.
Subcontractor quotations are required. The estimator, once again, has little influence on how quickly a subcontractor answers.
Having to count takeoffs again. It does happen! However, it always implies more time.
Our staff provides several suggestions for improving the speed of your estimations. For starters, it’s critical to understand how long it typically takes to generate an estimate.
Is it possible for you to provide a “rush” estimate, or is it too hazardous in terms of sacrificing accuracy? Knowing how much time you require might assist you in developing a policy for what you bid on. For example, if the estimate is due in less than 48 hours, you would declare it’s a “no-go” (depending on the size of the project).
Second, while making estimates, it is critical to have a procedure in place. One of the most important qualities of a competent estimator is time management, and having a procedure in place is an excellent approach to managing time efficiently. Among the suggestions are:
Having your time scheduled so that you are not interrupted
Reading over the specifications carefully first and taking the time to compare
Any RFIs or requests for subcontractor bids should be sent out as soon as feasible. One of the worst behaviors is to put off anything that requires a reaction from another person until the last minute. No one enjoys being pressed for time, and it’s important to remember that subcontractors are likely to have similar “rules” for producing their own estimates.
Using automated takeoff software to count and confirm takeoffs Allowing time for anybody else who should be involved in the process to review the estimate
What can estimators do to enhance the way they arrive at the final price? For starters, use caution while employing any estimation software or other technology. Because automated software is only as good as the data it is provided, if you receive an automatic takeoff count of 12,000 widgets but your recorded price of widgets is out of the current, you will most likely underestimate your expenses.
A solid understanding of building procedures and materials is also required. Labor is usually underestimated in building bids, which can rapidly lead to profit cuts. Remember to add in things like overtime and labor done outside of regular hours.
Of course, from the client’s point of view, a lower estimate is typically preferable. Cost optimization is another important skill for estimators to master. For example, by offering building methods and materials that would allow the task to be completed efficiently and affordably.
Last but not least, maintaining current industry developments will help enhance construction estimates. Building solid relationships with other contractors and procurement managers, being current on events, and knowing how the demands of organizations or firms are changing may all assist estimators to provide the best possible quote. This helps to give critical context for ensuring your estimate matches expectations.