Construction Estimating Or Guesstimating – Which Do You Think Is Better?
There is no doubt that many contractors are losing money in their business simply because they are not organizing their estimates and as a consequence it is inevitable that they begin to lose money.
Some contractors look at a job such as a bathroom, put it on a piece of paper, judge that it will take three days and about $500 in materials and go from there.
That same contractor a week or so later goes and looks at a different bathroom says it will take around three days and $500 in materials and once again goes on from there.
So what do you think is wrong with this approach? Is he right or wrong on either bathroom, or further still will he even know? The bad news is he will find out later when he gets the job or does not because he out priced it, then of course it is too late.
After discussing this topic with multiple contractors over time it seams that those who measure each unit specifically and differently make larger sums of money on a consistent basis over time. Let’s look at how you can do this.
Before I layout this procedure let me begin by stating that this will work for any contractor or construction project. It will work for a remodel, home builder or any specific specialty; this is so due to the fact that the fundamentals remain the same.
Let’s take a wall for example; in this case you can estimate your costs per square foot or per linear foot. In this case we figure that it will take up to an hour of production in this case per linear foot and the materials will cost $12.50 per foot.
So if our wall is ten feet we can figure ten hours of labor with a material cost of $125.00. Here is how this works better; once you have finished the project you will assess what length of time it took and how much it cost. For this example lets say the project only took eight hours to complete (8/10ths of an hour) but our cost was $150 hence $15.00 per linear foot for the materials, we have just figured out how to apply this new information for future estimates.
By the way, for this example, let’s say everything went smoothly, it was just a regular work week and everything went well.
Now on the next wall which is 15 feet we now estimate that it will take 12 hours to complete, so for example 15 feet times 8/10ths of an hour with our materials cost at $15 per foot totals $225 for materials. This will put us closer to the real costs over that of our initial estimate.
Based on this, we can see that there are variables and you need to make adjustments on each estimate so that you do not keep repeating the same mistakes. This is obviously continuous so you need to keep up on it each week.
When you consider it carefully, it’s almost like driving a vehicle; you do not set the direction, lock up the controls and then drive. When driving you are consistently confronted with changes and as a result of which you have to make adjustments. I mean if you didn’t you would be heading for imminent disaster and this is also true when it comes to putting together your estimates.