Construction Estimating: A Quick Guide
Every construction worker out there knows what their time and effort is worth to them, but it can be difficult to know what to ask for in return for your services, especially when you have to factor in what your competitors’ rates are going at. To ensure your customers that you have the best services at the most competitive prices—and guarantee that you’re still bringing in a worthy profit at the end of the day—you’re going to need to learn the ins and outs of construction estimating.
By taking our Estimating for Contractors seminars at Contractors License Resource Group, you’ll be able to pick up on the essential techniques and concepts at the foundation of construction estimating, and get a complete walkthrough of how the bidding process works—that way you can become a master yourself. To fully benefit from the knowledge we have to give, you’ll have to enroll in one of our construction estimating classes. However, that doesn’t mean that we’re opposed to giving you a quick guide for what’s to come:
Never Think of Construction Estimating as a Guessing Game
To start off, when you begin your training at CLRG, you should be open to change. While you can win a bid on a job without thinking too much about the direct and indirect costs it will take to get the job done, it’s much more profitable to do some calculations beforehand. Underestimating what it’ll take to finish can lead to a loss in profit, a waste of your valuable time, and, depending on how bad it goes, soil your reputation.
Don’t treat your bids like a guessing game; it’s not about luck. Once you learn about the successful techniques you can employ in order to come to a clear estimation, you’ll be able to make better analyses, win more bids, and build a more successful business.
Always Keep an Eye On the Time
Your time matters. Most of all, you should know this. You don’t want to take on a job that you assume will only take three or four days to complete, only to find out that once you’ve gotten started, you’re in over your head. A poor estimation regarding time will not just cause you to lose profit, but it can also cause complications with other jobs you have lined up. When you’re in a construction estimating class at CLRG, you’ll learn valuable techniques about how to properly estimate time, that way you can make more informed estimations before you even dip your toes in the water.
Remember to Calculate In Your Material Costs
When making an educated bid, another concept that you should keep in mind is the importance of material cost. Lower costs mean more profit for you, and if you take on a job without understanding the full scope of the project—including just how much money you’re going to have to spend on materials—you can get caught between a rock and a hard place. What once may have seemed like a dream job can turn into your worst nightmare. To maximize profit margins, make sure to take all factors involved into account before placing your bid.
Labor Expenditure—Is It Worth It?
Depending on the scope of the project, you may be able to complete the job by yourself—however, when it comes to large scale projects, you’ll most likely have to hire some help. With an extra expense comes another chunk out of your profits, and forgetting to add that into your calculations can be devastating.
In our advanced construction estimating class you’ll be advised about the importance of keeping additional labor costs in mind when making an estimate, as well as how to factor in productivity.
Know When to Pass a Job Up
If the money you’ll be making from a job isn’t enough to cover all of your expenses, it may be best to pass it up. Using all of the tools you’ve picked up in your chosen construction estimating class will help you make more informed estimates going forward, but it all comes down to your ability to put the details together and use your better judgement.
At CLRG, our experts are in your corner, and we’re ready to provide you with the tools you need to strengthen your skill set and maximize your business potential. Call us today at 888-903-4803 to enroll in a construction estimating class—there are plenty more valuable tips where these came from.