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By Duane Craig
August 6, 2018
Estimating mistakes cost contractors plenty. And, with the demand from customers for estimates on-the-fly, the chances of missing the mark increase dramatically. Try this FLOW strategy to stop making estimating mistakes.
1. Fit Yourself with the Right Tools
On-the-spot estimates are risky, but today's want-it-now consumers often expect them. So the best approach is using a familiar estimating tool that matches your estimating style. It's also important to use a checklist, either one incorporated into the tool, or a separate one. The checklist contains all the critical aspects you must consider to avoid surprises once the work begins.
Here are examples of what to include:
Your checklist will evolve over time as you run into other surprises, so by keeping it up-to-date, you have an instant memory jogger. It’ll help you include everything, even as your potential clients pace back and forth waiting for a number.
When not doing on-the-spot estimates, use a tool that matches your other workflows. If you work mostly with spreadsheets, then use a spreadsheet-based tool. If you use project management software, then use an estimating app that integrates with it. When you use Procore, for example, you can choose from several bidding and estimating apps that integrate.
2. Look After Your Database
Commercial cost databases get you only about halfway to an exceptionally accurate estimate. They are great for starters, and for quick estimates to verify subcontractor pricing or for getting a rough change order cost. But, they'll always have something missing—the reality of your particular materials, equipment and labor markets. For that, you need your own experience, and hopefully your own records of what you spent for similar tasks on similar projects.
You will probably create, and use standardized assemblies in your estimating to speed things up. Assemblies represent multiple items, and they rely on your database. If you don't keep your database updated with the most recent data, your assemblies won't show accurate resources and costs. When individual items rely on outdated data, your overall estimate takes a small hit to its accuracy. But, when assemblies use inaccurate data the hit is much bigger.
Another key aspect of your estimating database that you should watch closely is the nomenclatures, or descriptions of items. Rebar comes in sizes like #3, #4, and #5 etc. which roughly correspond to 3/8 inch, 1/2 inch, and 3/4 inch. However, there's also a length attribute to them, and they come in black, epoxy and weldable. If the database doesn't contain every aspect of the material, you won't be able to accurately match the project specifications.
3. Observe Your Process
Estimating is best done in a quiet place where the only interruptions you face are the ones you create yourself. In fact, if you use ear plugs or noise cancelling headsets, you can get the advanced benefit that silence offers. Make silence part of your estimating process, and you'll likely find you'll get done quicker and have more accurate results.
Another important aspect to include in your estimating process is a step-by-step method. If you prefer to takeoff and estimate each area as you go, then always use that method. Or, if you prefer to takeoff and estimate from the front of the plans to the back, then do that consistently. Alternating your method is like interrupting yourself; it increases your estimating time. Not using the same method from one estimate to the next will also reduce accuracy as you adapt to a different method each time you start a project.
4. Wield Strong Quality Checks
Once you've done the heavy lifting of fitting prices to activities, don't compromise all that work by using weak quality control. Hopefully, you're using an estimating tool that handles the math accurately. However, if you use spreadsheets, be very skeptical about formula accuracy and numbers that get carried forward to other aspects of the estimate. Spreadsheets are notorious for errors, and the number one reason is that few people have formal training in using them.
So, if you're using spreadsheets, get trained. On the other hand, if you use a specialized estimating solution, develop your own quality checks to verify:
You're probably wondering why you'd need training to create accurate and secure spreadsheets. Spreadsheets are powered by code (formulas). Keep in mind, though, that trained professionals create buggy software all the time, and imagine what untrained, casual users can do. Spreadsheets have dangerous aspects like hidden cells, and they are often riddled with cut/paste errors and mistakes so serious they have even been linked to the recent collapse of financial systems.
5 Tips to Avoid Getting Ripped Off by Project Estimates
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