Estimating is one of the most important jobs of the contract glazier, particularly in a slow construction environment with fewer jobs and greater competition. Estimating too high can cost a company a job, and estimating too low can lead to bankruptcy. “Smart estimating is not only smart, it has to be a way of life if you are going to survive in today’s commerce,” says Michael Downs, president of Downs Glass, Sarasota, Fla.
Below are 10 tips for smart estimating, and a list of common mistakes to avoid.
1. Think before you bid.
“Review the set of criteria you have established when you consider bidding a project: size, complexity, do you need work in the schedule’s time period, can you make money on this job versus bidding another, is this a favorite contractor or architect.”
—Newton Little, executive vice president, Ace Glass, Little Rock, Ark.
2. Allot enough time to estimate the project.
3. Ensure you understand the scope of the job and are able to deliver.
“Read the specifications and be prepared to meet or exceed them; review a full set of plans that thoroughly expose your scope of work; and prepare requests for information to explain any ambiguities.”—Little
4. Seek input from the general contractor.
“Estimating starts with a good document review of the project and an accurate assessment of the scope of work you will be bidding. Sometimes this will require the input of the contractor or several contractors, if it is a public bid. Each contractor may approach the scope differently.”—Bill John, president, InterClad, Minneapolis
5. Make a quantitative analysis of materials and labor required.
6. Make a qualitative analysis of your scope of work. This includes any project management required, or special conditions and equipment that are required or scheduled.
7. Ensure accuracy.
“Estimate to a T with a spreadsheet that covers all costs involved from start to finish. Perform careful checks and balances once a week with your estimators.”
8. Prepare and send out a scope sheet.
“This scope sheet is a bid document without pricing that may have important notes you want the contractor to see, review and understand about the bid you will be sending at a later date.”—Little
9. Decide how much money you want or need to make on the project.
10. Review a bid list and create a strategy for bidding each contractor.
- Bidding to get any work at any price.
“Desperation bidding results in low or no margin, and when a job or two goes the wrong way, it results in weaker firms going out of business. It also results in the other firms having to get margins down or reduce revenues, or both, weathering the storm until some firms go out of business and the market recovers sufficiently to allow margins to rise on the upturn of work.”—John
- Underestimating labor requirements.
“Labor is the most difficult to estimate. For those who haven’t been in the field, it can be difficult to visualize how long it will take to do a particular task. A particularly expensive detail may be overlooked by someone who doesn’t recognize the degree of difficulty from an installation standpoint.”—John
- Rushing into a bid process.
- Forgetting the soft costs. These may include diem, required weekly meetings and composite cleanup, where subcontractors share the daily cleaning costs.
“These smaller, left-out expenses can eat up a profit margin.”—Downs
- Not following up on a quote.
- Slashing numbers on bid day.
“In order to cut your number down, an estimator may just plain whack the labor number down and say, ‘they’ll just have to get it done faster. It’s what we need to do to get the job.’”—John