How to Ensure Your Cost Estimates Are Accurate Each and Every Time If You’re a General Contractor
If you’re in the general contracting or home services industry, then you’ll know how crucial it is to create accurate estimates for both your client’s and your sake if you want your project to be successful on both ends. So, if you are looking for ways to improve in this area, here are some helpful tips on how to go about perfecting your cost estimates once and for all, courtesy of Rose Building Contractors.
Stick estimating is ideal to use if you want to create estimates that are as detailed and as accurate as possible. However, this level of attention to detail is not always feasible especially if your project is massive, to begin with. That said, stick estimating is ideal to use for smaller projects where every penny matters.
Unit cost estimating for quicker decision making
To estimate the projected cost of a project, you can use unit cost estimation to get a big picture of what your overall cost is likely to be. This is done by simply multiplying the cost of each unit by the number of units that will be used so that you can get more of a broad-based idea of what the scope of the project is likely to be.
Calculate your labor and material costs
These are the most important factors in determining the final estimate. However, you’ll also have to consider other factors that may have a bearing on your labor and material such as supply and demand fluctuations, the cost of the land, and any other legal or administrative costs that you may have to contend with.
Set realistic and achievable profit margins
The main objective of your project should be to make a decent profit in the end. But this can only be achieved by setting realistic profit margins that are feasible for both you and your client.
Make sure you are clear about your commitments
Bidding for a job can be easy, but ensuring you can fulfill all your obligations down the road may be a different story. Therefore it pays to be absolutely certain that the project is a match when it comes to your resources and capabilities so that there are no disappointments on either end.
Be sure to ensure that your client is on the exact same page with you
To avoid any disputes or misunderstandings, later on, it is always better to make sure you and your client agree on cost estimates to the nth degree. Therefore, be sure to have your final estimate written and signed off by the client so that they are fully aware and understand any and all costs involved in getting the project completed.
As an extra precaution, you can use construction estimating software
Of course, you can always rely on construction estimating software to make sure that you are covering all the details that need to be covered. Moreover, this software should not just help you in creating estimates quickly and conveniently from wherever you are; it should also ideally enable you to create professional templates that are on point brand-wise; it should assist you in setting up payment schedules as well as notify you of any pending estimates and more.
It’s always a good idea to follow up with the client even after the final approval if you want to enhance your customer service levels that much more. Plus, it’s an excellent way to build long-standing relationships with customers to enhance your stellar reputation even more.
Indeed, accuracy is key when it comes to cost estimates if you want your business to have longevity in an industry where competition is doggedly fierce.