Estimating- Cost records key to accuracy

 

  
  When faced with a current situation on what to do, one of the first questions we ask ourselves is, “What has worked in the past?” The only way to look back to keep good records- this way, you have archives to study.

For starters, you will need to set up some kind of database, whether it is on the computer or manually. This may seem a little time consuming, but it works to your advantage. You should set up files for every type of project your work on, so it can be easily accessed. This file will contain past estimates coupled with the actual results of the project, as well as any notes of things that affected the specific project. Also, notes on the home owners/clients themselves would be helpful.

Estimating should use past and present information. Of course, you will need to use current prices- but of course, prices can fluctuate- hence estimating. But, you will also have to know what items, such as labor, cost on your past jobs- this will help you gauge similar work. While estimating a project, you may not be able to off the cuff pull out a number of hours and laborers, but looking back to a similar size concrete job will provide you that information. That is just one example of why record keeping is so important.

Everyone has heard of supply and demand. This applies to estimating. The current demand for your type of work will affect your pricing. So, keeping records of high and low times can aid you as well. I have a friend who runs a roadside ice cream shop, and on her daily log, she writes in the weather for the day. She can estimate how much she does on a sunny and warm labor day weekend- as well as what she sells on a dreary day. The same can apply to contracting. Do your subcontractors or employees work better or worse or quicker or slower in certain conditions? This will affect your labor costs. But remember, labor can be the greatest risk of error within an estimate. This is why records can help you accurately determine a close figure.

If you do the same type of work repeatedly, you may have a very good handle of your estimating tactics. But, if you do a variety of work, it is good to know what you and/or your crew can do in an hour at that type of work.

While amount of materials can be access on your files, the prices are a different story, as they can fluctuate. So always be sure to get the most up to date prices, especially if it is an unusual product, or if you are dealing with a new vendor.

The more you can access information about previous projects, the more accurate your new estimates can be. Otherwise, you are starting from scratch each time.