Every captain needs a crew to help steer their ship and avoid treacherous waters. For the trade and construction industry, an integral part of the crew is the estimator. Estimators help businesses by providing an accurate depiction of the costs and the time it will take to complete jobs and projects.
However, even though estimating is a critical function, estimator jobs can often be incorporated into other roles in smaller businesses. This means all staff need to know how to prepare cost estimates. After all, pricing is one key area of the business that helps you grow. So what exactly does it mean to have good estimating skills and what are some estimating best practices?
What are Estimating Skills?
Estimating is all about data, planning and thinking ahead. You need to have a critical eye for detail and be able to prepare cost estimates. There are even certain skills that if you possess, should give you a helping hand with creating an accurate cost estimation. These skills include:
- Be organized. Being detail-oriented and taking an organized approach toward work makes a world of difference when working with project estimates. It can even mean the difference between profit or a loss on a job. If you’ve planned ahead and know what to expect, to some degree, you can account for all the financial details ahead of time.
- Possess architectural knowledge. Having in-depth knowledge of construction management and architecture is beneficial as well as understanding engineering drawings, project schedules, materials and floor plans. Large trade jobs have a lot of moving parts, so understanding these basic areas will give you a head start on planning and tackling the work.
- Have ethics. No one wants to work with a business that isn't ethical. Ensuring that subcontractors are paid the correct rate and that you are providing and accurate estimate that is reflective of the job requirements is ethics 101.
- Prioritize research. Taking time to conduct industry research into different areas of estimating, historical data, success rates of other similar projects and how to achieve better results for your business through estimating will improve your estimates. This will help you gain an understanding of where the industry may be headed and give you a foot up against any competition!
Estimating Best Practices
Ensuring that your business is estimating correctly is not always an easy task. Getting it wrong can drastically impact your project budget and ultimately, your profits. The following five tips will help improve estimating skills and, in turn, support business success.
Take the time to record your projects and make a database of specific, regular individual tasks that you can refer to in the future.
1. Look to the past
Do you have past project and job data you can refer to when project planning? Also called analogous estimating, looking at past projects (including direct and indirect costs) can help prepare cost estimates and determine accurate costs of future projects. If not, help your future self by asking construction project managers to better track your current construction projects and take the guesswork out of estimating. Sometimes, when creating a project, it’s easy to say, “oh, this task will only take three hours,” but these types of estimation methods can skew the actual cost of a project. It might be faster, but in the long run this doesn’t help your cost estimates as it’s not necessarily accurate. Take the time to record your projects and make a database of specific, regular individual tasks that you can refer to in the future.
2. Contingencies are a must
You’ve planned a camping trip for the weekend, you’ve packed all of your belongings but you’ve forgotten one vital piece of equipment; a tent! What do you do? It’s scenarios such as this one that you need to prepare for within your business–always expect the unexpected. Think ahead, anticipate risks to the project and ensure that you can meet any challenges that arise by outlining contingencies that safeguard against unforeseen circumstances that can affect cost estimates.
3. Use detailed descriptions
Ensure that every project is broken down into as much detail as possible. This will organize tasks and improve estimating overall. Consider things such as delivery, time frame for the completion of a project, who’s responsible for leading a project and any relevant resource and materials required. Providing this detail will ensure the accuracy of the estimate and better construction management for the success of the project.
4. Check everything
Think your estimate includes all deliverables and tasks? Check again. It’s easy to forget activities such as client feedback and changes, which can take up valuable time. Everything that should be included within the project must be visible. The last thing you need is an awkward scenario with a customer involving a missing part and in turn impacting the accuracy of the estimate. It makes your business look unprofessional and could put a spanner in the works for any future construction projects. You will also want to be sure to include an estimate disclaimer to cover all your bases.
5. Look to new technologies
With the right job management software, you can take complete control of the entire estimating process. See labor types, rates and supplier catalogs in one system while quickly generating an estimate based on true material costs. Being able to collate all of the information in one piece of software will speed up construction management and the entire estimating process so you can get to work faster.
If you’re looking to prepare cost estimates for construction projects or trade jobs, follow these five tips to give you an accurate understanding of the whole picture. When a job or project is priced correctly, it can deliver instant improvements to your bottom line – but getting it wrong can be a very expensive mistake.
Learn how estimating software can help save you time.