Need some help with your estimating?
Construction estimating is surprisingly one of the most overlooked aspects of running and managing a contracting business.
Just having an accurate estimate can be one of the biggest deciding factors in many bids (more on that later) and can help your projects run as smoothly as possible.
And given that we’re a construction estimating firm with over 900 clients, we’ve picked up a thing or two on how to write estimates that win people projects.
So let’s get into how to write estimates for construction jobs.
Modernize Your Estimating Process with This 1 Thing
The first thing we usually ask contractors wanting to get their estimating right is if they have any pricing or takeoff software.
Takeoff software is used to perform measurements for you digitally, which is much more accurate and easier to perform than if you were to do it manually.
For example, performing the takeoffs above with a ruler, calculator, and printed out blueprints would probably take you about 45 mins to an hour.
But with takeoff software, you can easily do this in 5-10 mins, with double the accuracy.
That’s the biggest advantage of takeoff software, so if you’re trying to estimate on your own its non-negotiable that you get this. Some great options are:
On top of this, it’ll help you to get a pricing database as well, so you have an organized way of pricing each individual item in the project.
IMPORTANT: If for some reason you can’t get takeoff software or a pricing database, then feel free to reach out to us. We have seasoned estimators and a location-specific database ready to tackle any construction project for you so you can focus on other parts of your business.
Some Perks of Using Construction Estimating Software
Here are some of the top reasons why any construction business needs estimation software:
Accurate and Automatic Calculation: This is one of the biggest pros of performing digital takeoffs. Since every measurement is automatically calculated with pinpoint accuracy, as well as all additions/subtractions from measurements, it makes your estimate much more accurate overall and leaves a lot less room for human error.
Puts You Above the Competition: Most contractors, especially in the residential area, rely on manual takeoffs or giving quick numbers by eyeballing it. Having the ability to create a formal bid proposal quickly and professionally can set you far above any of your competition bidding the same jobs as you.
A Higher Winning Rate: If your win rate for bids is 10% (which is around the average), then that means for every 10 projects you bid you’ll win 1 of them. But there are a many ways to bring up that winning rate to 20, 30, and even sometimes as much as 50%. One of them is to hire an estimating service to handle your estimating, and then spending the majority of your day selling jobs and forming relationships with potential clients in your area. Interested in learning more about expanding your business? Check out this post we wrote on how to grow your construction business.
Faster Bidding Process: When you have takeoff software and can perform measurements quickly, a sophisticated pricing database that allows you to price jobs, and a professional bidding template, you’re inevitably going to be able to pump out bids much faster, and much more accurately. If the time it’d take an estimator to complete a project by hand is 3 days, then you can expect it to be done in less than 6 hours digitally!
To Be More Accurate You Have to Be… Less Accurate?
Here’s how you can start performing laser-accurate takeoffs on your construction projects.
First off, what happens on the construction site is very unpredictable, you never know when someone can get into an accident, a subcontractor can get into conflict with a co-worker, or a worker reads the plans wrong and makes a mistake, etc.
That’s why it’s important to factor that into your takeoff procedure.
This next tip took me more than 5 years to realize, and once I did, my estimating was never the same.
And it was so uncomfortably simple.
Stop nitpicking with every item in the plans.
While it is important to be detailed, some parts of the estimate will only account for a very small cost which is not worth investing a lot of time into to figure out those prices.
For example, when you’re calculating painting on a project; some people like to spend an extra couple hours to be as precise as possible and subtract doors and windows from their takeoffs.
But a better strategy would be to actually keep the square footage in since working around those openings will acquire a significant amount of detailed work like trimming and edging which should in itself have its own costs.
The cost of each additional little door or window will be minimal so rather than spending time figuring that out we just don’t spend time subtracting the openings most of the time.
There are some exceptions when there are big openings (like the garage door above) but for standard doors and windows, in our experience, it’s a waste of time to try to be ultra-detailed.
Ever since we made this the common procedure for our estimators here at I AM Builders, our accuracy, client success rate, and estimating speed exploded.
Use an Online Pricing Database
Make sure you have a digitized pricing database that keeps track of all your prices. Stack is the most well-known program that helps you do this.
Apart from this, you should know that the price of the materials do change over time, based on the location of the job and the market. This is why we made our very own location-specific pricing database that inputs pricing based on the zip code of the project, and updates 4 times a year. This is so the number match with the laws and economics of the area as accurately as possible. Of course, labor rates in New York will not be the same as labor rates in South Dakota for example.
Hire an Estimating Firm to Handle the Entire Bid
Delegating less important work away from your time is the backbone of how many entrepreneurs start growing their business.
And many contractors and other construction professionals are understanding that truth of business. The most important aspect of a business is sales. The bringing in of revenue.
So logically, this is what contractors should be putting most of their time into. Selling jobs, meeting potential clients, developing relationships with other contractors in their area.
Unfortunately, that’s the opposite of what usually happens. For most contractors, their focus is almost entirely on project management, and the only time they have to create their bids is at night when they’re exhausted from the day.
That’s why many have turned to our construction estimating services to free up the burden of estimating off their shoulders. And when they work with us, they receive valuable guidance and a helpful hand in their construction business.
Write a Detailed Scope of Work in your Proposal
Every member of a construction project should know how to write a scope of work (SOW) for the construction project. The elements of the scope of work are as follows:
1. Overview of the Project
In this part, you will have to add a brief statement or summary of the whole project. You may highlight the key objectives as well. You should also insert the description of the project as well here.
2. Scope of the Project
In this portion, you should include all the specific goals outlined in the construction contract or deal. You will have to include all the data and information here, such as budget specifications, technical specifications, etc. Here you can also enlist the project milestones.
You will also have to include all the deliverables of your project. You will have to outline all your objectives and targets. Hint: Be as specific as possible.
4. Schedule of the Project
You will also have to add the project delivery dates here. You can add the projected timelines for your construction projects as well.
Compare the Scope in the Contract with Your Proposal to Make Sure Everything Matches
Your proposal should definitely match the scope of the contract as much as possible. Before that, you will have to find and choose the right template.
The right template will fit your next and upcoming project. So, before making the scope of the work, you will have to ensure that your whole team has easy access to see the scope of work. So, this scope of work needs a perfect evaluation and it needs the perfect and full-proof description of every single step.
Hopefully, you got a lot of value from this post. And remember, if you’re overloaded with projects to bid, you’re missing out on bid dates, or you just aren’t sure how to estimate, be sure to reach out to us!
Thanks for reading.