How to Get the Most Accurate Project Estimates Part 1
A contractor’s worst nightmare is to find that after negotiating and quoting a great price to their customer, they discover months into the project that the materials budget is too low to complete several portions of the project. This is one of the results of poor estimating.
Our Ft. Myers construction lawyers know that you work hard to build solid relationships where your customers trust your expertise. Estimating mistakes can cost you money and a sparkling reputation. In this two-part series, we give you tips to ensure you get the most accurate project estimates. In part one, we will discuss what you should and should not be doing when preparing an estimate. In part two, our Ft. Myers construction lawyers will focus on tips that will help you produce accurate estimates.
A Two-Step Process
Every construction project involves a two-step process: determining your costs and applying a markup that will earn you a reasonable profit after expenses. This sounds simple, but it will not be easy if you do not have a systematic process in place to produce quick and accurate estimates. The speed and accuracy in which you produce estimates will positively impact the closing rate and profitability of your construction projects.
What You Should Not Be Doing
There are some estimating techniques you will want to avoid. These include:
Stick estimating: This method of estimating construction costs involves counting every piece of material and every hour of labor. Although it is an accurate way to determine costs, it isn’t very efficient because it can lead to oversights if project plans or scope items are incomplete.
Estimating by hand: This method is even more inefficient than stick estimating. No matter how detailed you think you are, human error is high and a lot of time is wasted when calculating by hand with a calculator.
Produce Fast and Accurate Estimates
One reliable way to produce fast and accurate construction estimates is by performing a unit cost estimate. It is proven to be just as accurate as the stick estimating technique, but much more efficient. Unit cost estimating associates unit cost with each assembly involved in the construction process. If you use estimating software along with the unit cost method, you will produce even better results for your customers. Anyone that insists on doing construction estimates by longhand is opening themselves up to inefficiency, errors, and possibly fewer customers. Your customers are on tight deadlines, so they are looking for contractors that can give them a quicker turnaround on estimates—estimating software can help you accomplish this.
If you would like to speak with a Ft. Myers construction attorney from Cotney, please contact us today.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.