What makes a successful cost estimate?
Put that question out there, and it wouldn’t surprise us if you were inundated with a whole wealth of answers, each one different than the last but ultimately resolving themselves into two key points:
- It needs to be competitively priced in order to win the project in the first place
- It needs to generate a profit for the business or sole trader carrying out the work.
Making that happen means pulling together a number of different ingredients; accurate quotes from suppliers and subcontractors, the unique insights into a project offered by an experienced estimator, and of course, an attractive overall cost to name but a few.
Yet of all these ingredients, there are two that are absolutely essential to the success of any cost estimate:
- In-depth detail
- Absolute clarity.
In other words, a good estimate needs to be as comprehensive as possible, covering every last detail right down to the final nail.
However, rather than creating a large, unwieldy document that requires an advanced degree to even comprehend, that high level of in-depth detail should create a concise estimate that provides the client with a clear understanding of the costs involved in their project.
Complete Transparency – No Hidden Surprises
Right from the outset, even someone relatively new to the world of construction projects should be able to pick up your estimate and gain a clear understanding of not just the cost themselves, but also the processes used to determine those costs.
Take labour costs, for example.
It’s one thing to give clients a general, lump-sum figure for labour, but it’s another to break down figure and explain exactly what this pays for.
Not only does this provide the client with the sense of assurance that you really have thought of everything and will be carrying out a thorough job, but it can also prove invaluable if the labour costs you’ve quoted are higher than on a competitor’s estimate.
Of course, an additional advantage of this high level of detail is that it eliminates the likelihood of your clients being hit with the nasty surprise of additional cost for something that wasn’t included in the original estimate.
Though it should probably go without saying, the aim of a construction estimate isn’t to give a basic, rough-guide to the bigger, more obvious costs, but to cover every last detail so that the client knows the exact cost of the work.
Expect the Unexpected
Of course, getting the costs of a project exactly spot on can be tricky, especially if unexpected circumstances come into play which require additional expenditure.
Yet that doesn’t mean that such circumstances should be ignored at the estimating stage, leaving the project with a big question mark hanging over it as to what might happen should things go awry.
As much as possible, a professional cost estimator should be able to draw on their years of experience in working on similar projects to forecast the kind of potential problems that could arise and make allowances for them.
Again, this means that, even if the absolute worst should occur, the resulting costs don’t exactly come completely out of the blue to the client.
No contractor or business owner wants to find themselves in a dispute with their client. Quite apart from the potential damage to their reputation should they lose the dispute, the financial damage can be insurmountable.
Yet when those out-of-the-blue surprises occur, that’s exactly what can happen.
Again, the more in-depth detail you provide right from the start, the fewer chances there are of those surprises occurring, and therefore the fewer chances there are of you finding yourself at loggerheads with your client.
So far, we’ve talked about clear, concise, and highly detailed estimates as exclusively benefitting the client, but that isn’t necessarily the case.
The estimate can serve as the first essential blueprint for you as a contractor, ensuring you understand fully everything that is expected of you and helping you to plan out your projects effectively.
Win More Work in the Long Run
What all of this boils down to is one thing:
Delivering exceptional value to your clients.
When you provide clients with a clear, in-depth estimate that reduces the risk of hidden surprises, prevents potential disputes, and ensures that you’re well prepared to do the best job possible, you ultimately ensure a better working relationship with that client and – a boost to your reputation.
Naturally, you don’t need us to explain what a long-term benefit this can produce when it comes to winning more contracts in the future and ultimately taking your business to the next level.
Not sure your current estimates provide the level of detail and clarity your clients really need?
Fed up with putting forward ineffective quotes that fail to win those big contracts? Find out how My Build Estimate can help by calling us now on 01604871803 or order your concise, in-depth estimate online today.