“Let’s say you go out to a job and there’s a 10 foot wall that needs to be framed and plastered. You look at the wall and figure that will take about a day to do. You go out to another job and there’s a 15 foot wall that needs to be framed and plastered. You look at the wall and figure that it will take about a day to finish it. Gone are the days of working out a quote using a scrappy piece of paper and a blunt pencil. When you are working out quotes in this way you are not estimating, you are ‘guesstimating’!”

 

This sums up the way not to estimate but instead to undergo the perilous practice of ‘guestimating’.

An estimator’s job involves working out how much a project is going to cost and creating a budget accordingly. To achieve this, the estimator must assess the material, labour and equipment required by analysing quotes from various sub-contractors and suppliers.

Figures from payscale.com show a builder earns an average wage of AU$37.50 per hour. Construction estimating and project management are two of the skills you can acquire that are most likely to increase your wage. The estimator career report on payscale.com can be viewed here. There is generally a shortage of suitably qualified estimators. Maybe now is the time to make a career change or to upskill to remain competitive in quoting for jobs.

All of us have stories where a job has taken more materials and cost more to finish than originally ‘guesstimated’ and ended up in a dispute. 

In a competitive bidding environment it is critical to put together the best price to win the contract, ensuring that the works can actually be carried out profitably. The best price is not always the cheapest one – bids should now include a quality submission as clients are just as concerned with the quality of work as well as the cost.

If your bid is too low, it can lose you money, or if it’s too high it may lose you the job. Check out this list of common errors to see where you might be going wrong:

1. Problems with adding and subtracting: How are your math skills? You might need to brush up on your maths, because simple adding or subtracting errors could cause you huge issues.

2. Wrong measurements: Ikea tape measures probably aren’t sufficient. Or if you read the plans incorrectly, once again, small errors could cause huge issues.

3. Problems with labour cost estimates: Ensure you know exactly how much labour hire is going to charge, as this forms a critical part of the total cost.

4. Remember to include overheads: Make sure you include all of the ‘hidden’ costs of a job, including things like electricity and computer access to do the costings and accountant or bookkeeping fees to keep your finances straight.

5. Visit the site:What if there is some huge structural issue that needs to be moved or worked around to complete the job? You’ll never know this unless you visit the site and will fail to include in your estimate.

6. Use software to avoid errors: There are numerous software packages available that take half the work out of the job for you, increasing the accuracy of your estimating.

Accurate estimating skills will ensure your jobs are consistently financially profitable. ‘Guesstimating’ will not get you ahead. Master Builders can provide you with those necessary skills to estimate effectively, with the Certificate IV in Building & Construction (Estimating) or the Estimating Principles short course.

For further information contact Master Builders on (03) 9411 4555.