Take Control of Your Estimates
Everyone finds a way to estimate that works for them, but what happens when it’s time to scale up or pass on estimating procedures or bring on a new estimator? Fred Yarur of PEP (Painters’ Estimating Program) shares why precise and detailed estimating procedures are valuable and how they can make your business scalable. “The more in control you can be, and the more information you can pull from, the better decisions you will make in your business. And that just means you’ll be making more money.”
In the Cost and Estimating Guide provided by PDCA, there are 7 foundational principles for more profitable estimating. This is what is referred to the “Developed Area Method.”
- Scope of Work—identifying all items and surfaces to be protected, prepared, or finished.
- Quantity Takeoff—measuring all surfaces or counting all items to be finished.
- Labor—calculating the labor cost to perform the job.
- Materials—calculating the cost of materials to perform the job.
- Additional Job Costs—identifying and calculating additional job costs such as equipment, bonds, special insurance, subcontracted work, etc.
- Overhead—adding proper overhead costs.
- Profit—adding the desired profit.
Questions to Ask Yourself:
- Have you written down your estimating procedures to better understand your process?
- Can your estimate procedures be written down or are they intuitive?
- If you had to refine your estimating process, where would you want to start?
Want to hear more? Check out the webinar by Fred, “Production Rates and Strategies for Problematic Rates with Fred Yarur”
You can purchase the PDCA Cost and Estimating Guide here.
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