How to accurately estimate your next job
To get building, we first need the preconstruction right. Wrong estimates significantly cost businesses each year and result in a lot of awkward conversations with your customers. In this article, we’ll go through what to consider and what tools you can use as part of preconstruction.
Keith Moore of ConX is a carpenter & builder by trade, spending 15 years in the construction industry before co-founding ConX - a company making preconstruction estimating easy through its software. When building this tool, Keith went through the step-by-step process of what builders need when estimating jobs. Here’s what he found:
First off Keith, who should read this article about job estimates?
This is the perfect read for people who dread doing quotes. You could be a builder or a sub-contractor who is setting estimates from a set of plans.
If any of the below has happened to you, this article will be helpful:
Been frustrated with printing plans or using a scale ruler
Dislike complex, expensive software
Only want to use online tools made for tradies
Want to reduce the amount of time spent on creating quotes
Want to know more about takeoff and quoting tools
What’s the main thing underestimated in contractor quotes?
Part of founding ConX was that I experienced the headache of quotes when I was working as a construction contractor.
Since running ConX, I’ve found two key areas which account for underestimated quotes:
1. Quantity of materials
Once contractors have an accurate quantity of materials it is simple for them to apply an installation rate for this. The big problem is getting the accurate material quantity - underestimate and you pay big for getting materials last minute, overestimate and you're looking at surplus materials.
2. Time spent quoting
Contractors are skilled and when we’re on-site, we account for that skill at an hourly rate. The issue is contractors rarely factor in their time spent quoting and measuring jobs. It’s time that takes you away from the site or away from your family.
How can you reduce the issues from wrong estimates?
This is where technology is the answer.
Tech has made our life easier and it should make our jobs easier too. My main goal is for tradies to not lose a lot of money or jobs and that’s why ConX was built to save hours on every quote. As it’s tech, it’s more accurate, it clearly marks what has been measured so there is no ambiguity with the builder.
I back ConX and our product and pricing (which you can see here) but even if you want to check out other estimating software, I still want to let you know how to choose the right one.
What tradies need in an estimating software
Most estimating tools will have free limited time trials (at ConX you can try us for free for 14 days) and if you’re testing pre-construction tools, here’s the three steps to know if the construction software is right for you.
1. The basics
Every software has different capabilities so measure it against your job rather than. e.g. if you only need meter rates, a simple tool for quick measurements is the best choice.
Can it be used for your most common jobs?
Can it send quotes?
Can you add in your costs?
2. How you use the tool
Some people only like using Apple products. We all lean into technology a different way and there’s no point in buying software unless you feel comfortable using it.
Is it easy to use?
Do you need to download software?
Does it offer support to help get started and also ongoing support such as live chat?
3. How the tool fits in with your business
Lastly, it’s time to look wider at your business and the costs of using this tool.
Is anyone else on your team using the software? Do they feel comfortable using it?
Will your amount of jobs change? Does the tool or your subscription fit that? You don’t want to be stung later with higher fees.
How much time are you currently spending on quotes? How can you see if that time is reduced by using the tool?
What three things help contractors discuss costs with their customers?
There are three things that will mean you can cover yourself during pre-construction:
1. Clearly show what you’ve allowed for
Colour-coded markings from takeoff software is a simple way to be transparent. Once the contract is signed, any variation on top of what you have agreed upon can be an extra charge.
2. Terms and conditions
You can only quote based on current costs. What you can do is add terms and conditions to your quote specifying that depending on the job start date, prices are subject to change.
3. Relevant material are agreed on
Signed contracts outlining payment terms is crucial - I know it’s an obvious one but it can happen where time pressure means the customer says they’ll sign it later. This includes the timeline of the project and safety documents (particularly important when doing construction projects during lockdown).
Keith Moore is a Co-Founder of ConX - see more about Keith here.