It’s not that unusual to get rough estimate requests for construction work. While it happens a lot in residential work, many businesses also explore costs as they consider projects. Contractors can spin their wheels on rough estimates, spending time and money with no return. However, done right, rough estimates can bring in valuable new business.
Here are ideas for doing rough estimates that protect you and win the work.
Know the Work Fits Your Business Goals
No project is the right project unless it fits your business goals. If done right, your goals are about more than just making a profit. They include the project types you specialize in and those you want to do more of in the future. Considering your partners and employees, your business goals should also list the best project sizes for you. They should be tailored to fit your bonding and insurance capabilities and should specify preferred delivery methods.
If you only do rough estimates on projects that fit your business goals, you will avoid wasting time doing rough estimates on the wrong projects.
Confirm the Project Fits Your Availability
Timing is everything in construction. From how you put together the pieces of a project to how you set up the mix of projects throughout the year, you are always at the mercy of time. Before submitting your rough estimate, you should consider your availability to do a project within the time span envisioned by the owner. However, that’s not the only time factor to consider.
A common business owner mistake is being overly optimistic about staffing levels. Holidays, illness, personal crises, burnout, and fatigue wreak havoc on the best project plans. You can’t possibly plan for much of it, but you can look ahead and consider where staff interruptions are most likely to occur. If you stay in tune with your people and subcontractors, you can also get a heads up on potential personnel issues. Match your staffing knowledge to the client’s timetable to verify you’ll have the proper staffing for the project.
Consider the big picture, too. Would you have to sandwich the project between two others? Will you face too many challenges because of the time of year it would occur? A big part of doing successful rough estimates is avoiding them when the timing isn’t right.
Qualify the Client
Sometimes potential clients are just dreaming and trying to keep the dream alive by inviting people to give them prices. Or, they might want to know how much they can save by doing the project themselves. It’s not easy finding out how serious they are, but there are telltale signs they might just be fishing.
- Are they too flexible on the scope for you to get a clear idea of what they want?
- Do they have visible unfinished projects?
- Do they focus heavily on cost?
- Do they have a vague timeline in mind?
- Do they have a complex project that they think is simple?
Find out who is doing the plans. Plans prepared by architects and others with deep experience in producing plans to fit the local requirements will be more accurate. One indicator of how serious a client is about doing the project is how much planning they’ve already done.
Understand the Requirements and Unknown Conditions
Whether or not plans already exist, you really need a solid understanding of what’s getting built. From simple to complex, pay attention to the details of the scope. Then do some research to:
- find out the property history of previous use, renovations, and demolitions;
- discover if there are liens on the property;
- know the potential zoning and code issues;
- factor in any use of special materials or special methods.
Who and What You Will Need
Consider the required resources. Are there special requirements for specialized equipment? Will you need people familiar with unusual methods or materials? Will your current roster of specialty contractors be adequate? Will you have to rely on fabricators or firms that build components off site?
Like missing requirements and unknown conditions, overlooking these details can make your cost estimates grow quickly when doing the final estimate. Both you and your new client will be happier when your rough estimate isn’t shockingly lower than your final estimate.
Review Similar Past Projects
Refresh your memory by reviewing past projects that had similar requirements. Think about what went wrong and why. Consider what you might have done differently to improve the project outcomes. Apply these historical lessons to the current project to see if they can improve your rough estimate.
Do a High-Level Schedule of Values
Doing a rough estimate might take more time than you’d like without a technological approach. If you use Procore, you’re in luck. After all, any estimating program that speeds up takeoffs and estimates is invaluable for rough estimating.
Esticom’s cloud-based takeoff and estimating software is now part of Procore’s cloud-based project management platform. Contractors report they’re getting estimates done three times faster than using paper plans and spreadsheets. You can use it to tailor your rough estimates to the client’s needs.
If responding to a request for information, you will need to follow the format the owner specifies. Otherwise, your rough estimate can take any form that works for you. You could use nothing more than a schedule of values showing the top-level MasterFormat classes and how much you expect each to cost.
Once you have it together, be sure to include notes about all the variables that can increase costs, and remind the owner you are not providing a final bid for the work.
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