Construction Estimating is the Heart of Every Contractors Business!
Are you one of the thousands of contractors suffering the “construction estimating blues”? Are you living from job to job and, too frequently, paying bills from the last job with money from the current job?
If you’re like many contractors, maybe even a majority of contractors, your construction estimating is letting you down because you’re “guesstimating”, your not estimating! What do I mean by that?
Construction Guesstimating Vs Construction Estimating
Let’s say you go out to a job and there’s a 10 foot wall that needs to be framed and drywalled. You look at the wall and figure that will take about a day to do. You go out to another job and there’s a 15 foot wall that needs to be framed and drywalled. You look at the wall and figure that it will take about a day to finish it. Guess what, you’re guesstimating!
If you really want to make money consistently on each and every one of your jobs you need to estimate your construction jobs, not guesstimate them. Accurate construction estimating is crucial to your long term financial health.
Let me tell you how construction estimating should be done if you want to make money. Everything you do needs to be measurable for labor, materials and equipment. How do you do that?
Using our wall as an example, we need to find out how long (and how much material) it takes for 1 foot of the wall. Let’s say you know from experience it takes an hour per linear foot to frame and drywall a 2X4 interior wall. So, for the 10 foot wall, you need to bid 10 hours, for the 15 foot wall you need to bid 15 hours.Â When you’re guesstimating, which way too many contractors do, you’re frequently either leaving money on the table or over bidding and not getting the job. Most of the time money is left on the table because you’re eager to get the job.
Construction estimating is not a perfect science, but it beats the heck out of guesstimating. You may be asking yourself “how do I really know that I’m using the right standards for my estimating?” How do I know for sure that it takes me an hour per linear foot of wall?
Estimating and Job Cost – the Secret to Making Money
In order to be confident in estimating, you need to measure your results. That’s the only way to be sure that your estimating correctly is to measure your results. In the 10 foot wall example above, let’s say it only took 8 hours to build the wall. You probably would modify your time for future estimates from 1 hour per linear foot to 8 tenths of an hour per linear foot.
That’s how you make money consistently from job to job to job. Do everything in measurable units, measure the results and adjust your estimating for future projects.