Some important cost estimating issues

There are some estimating issues. Handling these issues properly can get an estimator back in front of the customer quicker with more accurate estimates. That leads to a better presentation and more sales. The responsibility for compiling accurate estimates for a construction company normally falls onto the shoulders of the cost estimators. Some construction-related companies hire estimators to estimate, and sales people to sell.

 

Some important cost estimating issues

 

Cost Estimate Plan


Any estimator must know how to frame the plan of action. And they must have a good set of plans to work from. Without a good set of plans, it is virtually impossible to know if the customer's idea of what they want done matches your understanding of what they want done. It is almost guaranteed that your concept of the job will differ from the customer's without a good set of plans. An estimator should not attempt any kind of an estimate without a set of accurate plans. He/She should tell prospective customer that unless and until they authorize him/her or someone else to do a set of plans that will pass the plan review at the local building department, the most you will give them is a very rough approximate for their job.

 

Estimating Process

 

One should do away with the biggest time-wasters, the old stick estimating method. For those new to the business, stick estimates involve a number of steps. Estimating should be done by unit cost only. It is much faster (as much as two times) than stick estimating, just as accurate, and gets you back in front of the customer sooner. You can't take three or four weeks with your quotation. You need to be back in front of your customers with a quote in 3-5 days, at most 7-10 days.

 

Unit costing follows the following steps:

 

1. Compile all the line items (assemblies) for that job.

 

2. Attach a unit cost to each line item (assembly).

 

3. Total your numbers and have them checked by a second party that knows what they are doing.

 

Estimating books

 

Some important cost estimating issuesThere are a number of estimating books available with unit prices. Care must be taken, because many of these books are regional in nature (although they may claim they work everywhere). Their method of constructing a given project may be entirely different than the way you build your jobs. An example is the use of steel I-beams in the eastern United States. In the west we use glu-lam wood beams. Pricing in many of the books is local, maybe regional. Several companies that publish estimating books will send a "modification factor" quarterly to correct their prices for your local area. Look at their book, count the number of items in the book, and multiply that by the number of towns in the United States.

 

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