Estimating got you down? Giving you the blues? Trust me, I know how you feel. But don’t get too depressed. There’s a cure just up ahead at the crossroads. Perhaps you can make a deal with someone who is waiting there. Though I don’t recommend selling your soul for estimating. I did, and all I got were more deadlines.
How can you rid yourself of the estimating blues and become a successful, happy estimator once again? My first suggestion is to try something different. Mix it up a bit. Create a new pattern in your estimating routine. Instead of starting with the lighting counts, start counting the branch or begin your take-off with the 1-line power riser.
Like any job or task, doing the same thing over and over again, hour after hour, day in and day out can drive you nuts. Not only can it bring you down, but it can slow you down. Also, doing things the same way every time creates deep grooves that are hard to climb out of. They can even take the form of losing too many bids. If you find yourself in one of these grooves, get out of it fast.
Breaking bad estimating habits is difficult, but well worth the effort. Be careful though, as changing your routine can cause you to make mistakes.
Quality not quantity
Haven’t won a bid in a while? This can really give you the blues. So what can you do when you haven’t hit the jackpot in the last five or 10 bids? Perhaps this is a good time to retool your estimating machine and create a new approach.
Contractors complain about having to bid so many jobs just to win one. It’s safe to say the more jobs they estimate, the less time they spend on each job. Maybe you should bid fewer jobs and spend more time on each one. Use the extra time creatively, and take greater risks. Get aggressive with your rolloff and redesign.
Too often I hear contractors talk about how they trimmed their overhead and profit margins to nothing, bidding jobs at or below cost. This might win jobs, but it doesn’t help you learn how to win accurately. If you have to bid jobs at or below cost in order to win, it may be the result or combination of a few critical elements: 1. Your labor database is heavy. 2. Your estimating is heavy. 3. Your quoted packages are not the best you can get. The latter is one you may not be able to change, but you can change numbers 1 and 2.
Heavy assemblies can add up
Counts are counts, so you can’t do much with them, but you can control how you build the assemblies representing them. How tight are they? Have you reviewed them as a complete assembly? Do they carry too much labor as a collective group of items?
Getting aggressive with your estimates doesn’t mean you have to leave or take things out. Let’s say you review your most common fixture assembly and it has all the needed parts, but the combined labor is a half hour more than what it will take to install. Simply add a “labor adjustment item” into the assembly. This won’t require you to eliminate or modify the actual material or labor items you want to keep and see in your extension. It also gives you a single item to review and adjust as needed during your extension review.
Tighten up your labor database until it squeaks
Try this: Take a recently lost project that you know the results of, and, using your desired overhead and profit margins and labor rates, trim down your major material labor units until your final price meets or beats the winning number.
Start with major labor items, such as pipe and wire items that carry the largest labor amounts. Also include light fixtures if there are a lot of them. Be careful with singular pieces of equipment with small quantities and a lot of labor hours, as they typically are not heavy. But consider pipe and wire in the thousands of feet, and straps, supports and boxes in the hundreds.For these items, even the smallest percentage change in their labor can add up to shaving a large percentage of hours.
Caution: The winning number isn’t always the lowest price. Make sure the job you compare to actually was low, and confirm it carried the same scope inclusions as yours. This may be difficult information to get, but you must compare apples to apples.
Estimating is very much a process in need of a steady, consistent routine. If you don’t have one, you need to create one soon. But this doesn’t mean you can’t change the daily routine and system. By doing so, you might just find the perfect balance of efficiency, intrigue and happiness. You might just chase your blues right on out of town as you do the happy dance on your plan table.
SHOOK is the president and chief estimator for his estimating company, TakeOff 16 Inc. He has worked in the electrical construction industry for more than 18 years. Reach him at 707.776.0800 or sfs@TakeOff16.com.