Inaccuracies Due to Overbidding
When you overbid a job – meaning you estimate that it will require more materials or labor hours than it realistically calls for – you’re likely to lose out on a lot of projects.
If you’re worried about the cost of materials or unsure of how long it will take your team to complete the work, you might be tempted to put a high price tag on your proposal just in case. But general contractors closely compare the bids they receive from subcontractors for an idea of price ranges, and many of them also perform their own takeoffs to check measurements. If your bid comes in significantly higher than others, the job will go to a lower bidder, and you’ll be back to searching for other projects.
Inaccuracies Due to Underbidding
Underbidding can win you the job, but you shortchange yourself in the process. When you underbid a project, you’re held to the quote you originally provided even if the job costs more than you anticipated. So you won’t recoup the cost of any materials that are more expensive than you planned for or any added manpower or overtime – these costs will come out of your pocket.
An exception to this is change orders. When plans change in the midst of a project, you’ll have the opportunity to reevaluate your estimate and provide a new quote for the changed work – but again, if you underbid on the change order, you are responsible for covering any extra costs.
There might be times when it’s worth it for your overall business strategy to intentionally underbid a project, which we’ll discuss later. But remember, in order to underbid on purpose, you still need to have a strong handle on what an accurate estimate looks like for the job.
Developing a Positive Reputation with Contractors
If you consistently submit accurate, professional proposals to Contractors, they’ll begin to take notice. General contractors measure success on the same things you do – time and monetary efficiency – just on a larger scale and with more moving parts.
Your accurate bid means they can spend less time checking your estimate – they’ve worked with you enough to know that you have a good grasp on the cost of getting the job done without price gouging, and this way your company can give the Contractor peace of mind.
When a Contractor knows they can trust you to bid the job correctly and deliver on your estimate, you can expect to win more jobs from them.
Saving Time with Accurate Estimates
Bidding accurately is also a simple time saver for your construction company. An accurate estimate allows you to order the right amount of materials – no scrambling to source more supplies or find storage for a surplus, and it keeps your crew schedules on track.
When one job is bid accurately, your time is freed up to evaluate other projects and keep a steady flow of work for your team.
Knowing When to Aim for Submitting the Lowest Bid
If you’re trying to break into a new area of specialization and get a foot in the door, underbidding can be one way to catch the attention of the general contractor. This could be the case if you’ve expanded to a new trade and your team doesn’t have many projects under their belt, or if you’re trying to get into government contracting, where those with the lowest responsible bid tend to win.
In these instances, the main goal might be adding these projects to your portfolio rather than simply making a profit. Perform your takeoff and create your estimate as you normally would, and then you’ll be able to see how much of the total price you can shave off to increase your chances of winning.
You need to have a strong understanding of your overhead and other indirect costs to make cuts to your price. When you know your normal markup for labor, for example, you’re able to reduce it by a fraction if needed. Be careful of coming in too low, however, because this can still result in losing the job if your qualifications are questioned. You also don’t want to set the bar so low that you can never make a profit in this area.
How to Create More Accurate Estimates
You may already understand why accurate estimates are so important, but how do you go about improving your process so that you can be more precise? These 5 tips can help.
1. Get ahead of deadlines
If you’re always working down to the wire on submitting proposals, your estimating team is stressed and playing catch up. Instead, be proactive. Find a tool that lets you increase your takeoff speed so that time isn’t wasted in the measurement stage.
The faster you can perform takeoffs, the better able you are to decide which projects are worth bidding on in the first place, and you have time to gather more information, conduct potential site visits, and create a comprehensive proposal that will get your company noticed.
2. Eliminate mistakes caused by human error.
Sometimes a ruinously inaccurate bid is a result of something as simple as a misplaced decimal point or a typo. This is an easy fix, so don’t let it happen to you. Use a pre-construction platform that keeps all your data in a single source of truth. You should be able to go from takeoff to estimate to proposal in one software without transferring data elsewhere and introducing the opportunity for mistakes.
3. Get familiar with the details.
Even if you want to send only a high-level overview in your proposal to the Contractor, get in the habit of making your internal estimate as detailed as possible. A labor and material estimate allows you to break down costs in terms of items and assemblies, but even if you prefer unit cost estimates, you should separate all indirect costs, rather than adding markup into the price of your measurements.
Knowing your true direct costs enables you to adjust markup, overhead, or labor charges as desired both per estimate and company wide. Don’t forget to include other indirect costs associated with the project, like freight, delivery charges, or refuse containers.
4. Take material cost increases into account.
If you can, share your takeoffs with your suppliers along with your quote request to ensure the most accurate possible order. And remember that prices rise regularly, so be sure you’re informed about supplier increase cycles. Don’t assume your materials will cost the same now as they did three months ago – double check before finalizing your estimate, and if you anticipate an increase mid-project, include a clarification about time-sensitive pricing in your proposal. This way your cost remains accurate and the Contractor isn’t caught off guard.
5. Anticipate waste.
We’d all like to think our crews are perfect, but in reality they’re human. People have off days and don’t accomplish as much as they intend. They make mistakes when measuring and have to scrap some supplies.
Account for this in your estimate by tracking how much waste is generated on average per measurement or per material (and labor) and add that percentage into your total price so all your bases are covered.
By following these 5 practices you should see your estimated costs start to line up much more closely with actual completed job costs, so you can bid more, win more, and grow your business.
Looking for a pre-construction estimate that will help you save time and improve your home remodeling processes? Click Here
Do You Fear a Bathroom Remodel?
So You Want to Remodel Your Bathroom!
An increasing number of people find that they can remodel their bathrooms to create the perfect place in which they can relax, refresh, rejuvenate and/or have a romantic time. A bathroom redo can be an inexpensive and fun way to spruce up your entire house. So, what you need are some tips for remodeling your bathroom.
When you decide to begin a bathroom remodeling project, it is quickest to organize your goals before shopping for materials. Choose what items you want to replace, add, or take away from the bath area. Consider refinishing existing items such as bathtub, shower, sinks and toilet, or renewing the tiles or tub and shower enclosure to give a new look to your bathroom even with just a little investment. The bathroom is one of the most used areas of the house, so you want to be sure that you have it remodeled in such a way that it will last for a long time. Remodeling is extremely exciting because it means you are getting to create the ambiance you have always wanted in one of your favorite places: the bathroom.
Why Remodel If You Can Decorate?
Perhaps you would like to redo the bathroom, but at the same time you would like to keep things uncomplicated. If it is time for a bathroom makeover, count yourself lucky when you see the number of wonderful current decorating ideas for the bathroom today. There is a huge amount you can do with simple decorative treatments that avoid a full remodel.
If you have a small bathroom, remodeling ideas should mostly revolve around freeing the space of clutter and making better use of the available space. Using shelves, taller cabinets, and other organizational items will help the room seem larger because everything has a place and there is nothing left to crowd the space. There are any number of cabinets available to fit over the toilet or along empty walls to maximize the available area, or cabinets can be hung on the wall to free up floor space.
Regardless of the size of your bathroom, it is important that you sort out the existing items in the bathroom and choose which items you want to keep and which items can now retire. Clearing out unimportant clutter from the bathroom can help you decorate the room easily and match items for your fresh theme. Don't be afraid to be bold and exciting - make your bathroom a fun place to visit! Another decorating idea for a bathroom is to redo the porcelain sink and the tub. These tend to take a lot of abuse through the years, and with a fresh treatment, they will look brand-new. It's a lot cheaper than putting in all new fixtures, and it really does make your bathroom look good.
A common bathroom decorating idea for people on a budget is adding or replacing light fixtures. While choosing a light may seem like a daunting task, be aware that once you have chosen the perfect lighting to enhance your bathroom's theme, it can make a dramatic change to the overall feel of the room. Of course, also consider new paint, tile or wall paper to freshen up the space.
Following the new bathroom decorating trends while maintaining individual taste and style can be achieved with a little research and great imagination. Building on these ideas is sure to help anyone create the bathroom of their dreams. Home decorating magazines can be quite helpful, because if you see decorating materials that you like, there is often a section that shows how you can get them. They are also good at allowing you to see how the materials you're interested in fit with other colors in the room.
But I Need to Remodel
If you find that redecorating just won’t do, and you really need to remodel, as part of your planning process create a bathroom remodeling check list to help you determine how much of an upgrade you can afford. Make sure you know exactly where your fixtures will go when designing your remodeling project, since you need the plumbing there to accommodate them. Unless you can somehow move the location of your fixtures, your sink, tub, and toilet are going to be exactly where you have them right now. In most cases, the location of your fixtures is going to be a hard limit, so plan accordingly.
Depending on the size of your bathroom and your budget, there are a few bathroom remodeling tips that can the project go smoother, as well as make life after the project easier. For large-budgeted bathroom remodeling projects, you can go beyond your dream bathroom by expanding the area and separating the toilet from the bath area. You can even add spa treatments, bathtubs, water jets and other more expensive bathroom add-ons.
If you have a more modest budget, one of the most important things is to make sure that the shower area is easily accessible. For example, some showers require a person to step up in order to enter the shower, while others are just walk-in showers. Whichever kind of shower you choose, it is important to note that it will have to be well installed in order to prevent leaks. Another method of controlling bathroom remodeling costs could be instead of replacing your tub and all the wall tiles, you could look into a tub and wall unit that fits right over an existing tub and wall. By using this technique and for a few hundred dollars the area can look as if it is brand-new. The alternative is replacing everything, which could run into the thousands.
When you choose where smaller fixtures go in the bathroom remodeling design, think function over form. For items such as the towel rack or even the toilet paper roll, keep in mind that they should go in places that are sensible, The towel rack might look nice by the door, but if it's out of arm's reach of the bathtub, then you won't be happy whenever you get out of the shower, for example. With all things in bathroom remodeling design, if you design with an eye for common sense and space, you will be successful in your attempt to create a room that's both stylish and functional.
There is no greater joy to a homeowner then to remodel a favorite room such as the bathroom. So, enjoy every minute of it.
You can take your first relaxing shower and enjoy the long-term benefit from the investment you made.
Berceli has undertaken extensive home remodeling over the past 10 years. Learn why they were named on of the best remodeling companies in the New York and New Jersey area
Berceli NJ Marketing team.