Knowing how to estimate a new contracting job can be complicated. Materials prices are ever changing, your time is valuable, and there are always unexpected costs. So how can you make sure your estimates are more accurate? Here are 4 tips for creating more accurate estimates for you contracting business.
Actively Study Fluctuating Materials Costs
As a regular consumer of raw building materials, it’s in your best interest to stay informed on the changing prices of the materials you use. If you know how to properly estimate the cost of your materials, then you’re more likely to create more accurate estimates for your clients. Clients like it when they know what to expect.
Unfortunately, it’s not safe to assume that your cost will stay the same from one project to the next. The current skyrocketing prices of lumber are just one reason why. Make it a habit to contact your suppliers to check current pricing, and ask if they intend to increase prices in the near future. That way you can adjust your estimates accordingly. You can also sign up for supplier and organization newsletters that track costs for you, so the information is sent to you instead of you having to track it down.
Focus on the Details
When it comes to creating more accurate estimates, you’ll need to focus on the details. If this is a project you’ve done multiple times before, you can expect your estimate to be more accurate. But if this is a project you’re less familiar with, you may need to do a little more research.
Consult with others in the business about potential job risks and common issues with their projects, and make sure to factor in those potential extra costs. If there’s a learning curve to overcome on a project you’re less familiar with, you may want to factor in the cost of a little more time.
Also, make sure to remember the legal costs that come from any potential permits or regulations in your area. Stay up to date on your city’s permit requirements and add them to your estimate process.
Will you need specialized equipment? Should you hire extra help? Consider potential additional costs such as hiring specialized subcontractors or extra crew members. If you need to hire extra help, make sure to consider their rate of pay. What about special equipment? If you need some extra tools you don’t readily have access to, you’ll need to factor in the cost of rental. Sometimes these details can fall by the wayside if you’re not careful in your calculation, which can lead to less accuracy in your estimates.
Make sure you are communicating well with your client, and that you understand exactly what their project entails. You don’t want to get halfway through a project and learn that they need you to do a lot more than you originally estimated. Likewise, make sure your client understands your perspective. Most clients are reasonable and understand that estimates are best guess scenarios, but it doesn’t hurt to be honest and forthcoming.
Get your clients the funding to pay for your accurate estimates by partnering with HFS Financial. If you’re concerned about how to offer financing as a contractor, don’t be. HFS Financial can find the perfect financing for your clients. Give us a call at 1-800-254-9560 to partner with HFS Financial today. “You Dream It, We Finance It.”