Replies

1. 
   davidmeiland | Jan 23, 2010 04:55pm | #1

   Everyone seems to like William Asdal's book "Defensive Estimating".

1. 
   GoDadGo | Jan 26, 2010 09:50am | #2

   Books

   No book can replace your own knowledge. No book can can keep up with fluxuating material prices. No book can appreciate the skill and speed of your crew (or lack there of). No book can take into account any site bourne difficulties of any particular project.

   I once attended a seminar on estimating at the World of Concrete convention. The speaker took 90 minutes to tell us to figure out your costs and bid more than that. At first I was pissed. Then I realized the simplicity of the issue. No matter how big or how small your project is, the fact remains the same. Only you can know your project. There is no magic or secret. There is no single proven way to figure it out.

   I have worked on many estimating programs in my time. I am proficient in Timberline and Primovera. I am familiar but much less proficient in some others. I have 2 projects right now, a residential gut and rebuild worth $800K and a commercial ground up worth $2.9M. I use excel.

   I bid you the very best. GoDadGo

2. 
   flash28 | Jan 27, 2010 10:55pm | #3

   I've never had an issue
   I've never had an issue pulling together material estimates/allowances. Where I ALWAYS stumble is estimating how much labor each task will require. I'm overly optimistic that I'll run into no issues. Those times when I AM more realistic, then the total sum for the job seems exorbitant. I suppose that part of my problem is always having worked alone and for folks who really wanted me to do the work, so they never got competitive bids. Therefore, I have no frame of reference as to whether I'm high, low, or competitive.

   Sigh.

3. 
   born2hammer | Jan 30, 2010 01:47am | #4

   I am in exactly the same boat. I am doing the same kind of work, and have trouble with the labor part as well. I have been doing my best attempt at estimating, then telling the client they should double my estimate for a working figure. This sounds ghastly at first, but it usually turns out to be rather realistic. I have never worked on a job where people did not change things/add things at all times. And there is always the unexpected, and the thing I just plain overlooked. Lately I've been running an excel sheet beside my original estimate that logs the unexpected cost separately. Hopefully that will give me a heads up on some other jobs. In this type of work, no two jobs are ever alike, so there is not alot of formula to fall back on.

1. 
   calvin | Feb 13, 2010 09:41pm | #6

   When estimating, a tactic I use is to break up the project into manageable parts. By separating key things in the process it's possible to keep a consistant set of figures that really don't change from job to job. Then you add on the variables that seem to tax the task.

   If all you had to do is nail basebd all day. Everything is precut. All furnishings are gone. Air hose out, compressor in place. That's one number.

   Cuts? how many? Where's the saw? 14'trim in a 12 foot room or an 18ft.

   The room is up the stairs, down the hall, around the corner and through a tite door. You gotta put down runners. That's another number.

   Small stuff out of the room, big furniture can't move.

   Dog........Best add another number.

   Experience will give you the answers that others don't have or don't allow for. Those that figure well will be around a long time. The others can get buried even in good times.

   One thing to work on is speeding the process of quality long lasting workmanship. There are

   faster ways to do a good job.

4. 
   FlyingContractor | Feb 03, 2010 02:15am | #5

   I hear ya on this one! I am in pretty much the same situation. I tend to think of time optimistically or risk losing the job to guys using cheaper labor (I'm in California, so it's a HUGE problem, ie illegals), but usually end up making WAY too little for the time I spend doing the job right.

   I've looked into some of the software packages available, but it just seems unrealistic for me to fit into a 'standard' time for a certain task. Truth be told, I am a perfectionist, and take much longer than standard, but that's what differenciates me from others.

   I guess the answer is, I use Excel and MS Project to aggragate the numbers, and I just need to be 'honest' with myself as far as expected time. Yes, I will lose the "I want the rock bottom price" clients, but at least I can be paid fairly for the quality I deliver. Of course all that said, it's hard these days to pass up anything that comes your way!

   If you find something that works, I'd love to hear!

5. 
   SamT | Feb 15, 2010 01:15am | #7

   In about a week come over to MS Excel for Contractors.

   I'm in the process of Completely reworking the site layout, so... about a week.

   It's a tutorial I'm writing about effectivly using Excel in your office.

   SamT

1. 
   silver77 | Feb 15, 2010 10:57pm | #8

   That sounds good Sam T. I'm
   That sounds good Sam T. I'm pretty sure I heard good things about what was going on...I bookmarked the link and will check ii out in a week.

   thanks for the effort...I use excel and love it but I use a very primitive version...

   silver

6. 
   cargin | Feb 20, 2010 04:49pm | #9

   Flash

   As the others have said there is no book that can do what your experienced eye can do. Every job in remodeling is different and every contractor has different speeds and skill levels.

   One area you can correct in your thinking is that you have to be competitive. The truth is that most HOs don't get several bids. Most HOs want to hire a contractor that they are comfortable with that they trust to do good work and be honest with them.

   Here is an excel worksheet that I use to figure estimates. If this makes sense to you then I can show you another worksheet that I use to figure the bill after the job is done.

   If you are still with me after that one then I can show you how to marry the 2 worksheets into one excel sheet that has all the job information in one workbook from the estimate, the estimate letter, the bill and then the invoice.

   After you do this for a number of jobs then you can start tracking how long it takes you to install exterior doors, replace windows, hand suspended ceiling and so forth.

   This is the 1st time I have posted attachments to the new BT so we will see what happens.

   Rich

   
1. 
   JerraldHayes | Feb 22, 2010 04:55pm | #11

   Rich if may I would like to offer you some criticism and advice on this latest edition of your spreadsheet from both a estimating technique and organizational standpoint as well as a Excel document.

   First of all your spreadsheet is looking for and calling for a sheet named "Cover sheet & Settings" which seems to be missing so everything I say might be off the mark because of the missing sheet.

   First of all from an estimating standpoint I'm wondering just what the heck does markup mean on your worksheet? Are you marking up just for Net Profit or are you marking up to achieve a Gross Profit margin on the project to cover your costs of doing business? This Crew Charge Rate you have there in cellH6 looks to me like it's a Loaded Labor Rate (even if it is for two people which I think it is in your case if I recall your circumstances correctly). If so it looks like you are marking up a marked up rate twice. So what's the deal? And where or how did you create and define your crew rate? Your crew rate seems arbitrary. Why not pull it from another sheet (like your "Cover sheet & Settings" or my Capacity Based Markup Worksheet) where you create and define it?

   If your markups in cells B9 for Materials and G9 for Labor are for Net Profit only why are you marking up materials for Net Profit more than your labor?

   And the 10% Contingency in cell B7 what is that for? Are you that uncetain about the materials you will need for your projects that you need to apply a contingency to that cost group? Usally estimators and contractors are more uncertainl about labor and the materials cost of the project can be estimated very accuratley and yet you don't have contingency for labor? What's with that?

   And as far as contingency is concerned I think it is far better dealt with on a line item basis for specific uncertainties than on a top level basis saying you are generally XX% uncertain about the whole project. Different tasks in a project have different levels of uncertainty and as I said before can and should be pretty precise and certain of our material estimating.

   I was also at first confused trying to figure out where the Total Job Price was on your worksheet because you call it "Job Total Cost." Generally and sematically speaking the word cost is what things cost you as a contractor and after applying our markups to cover overhead and profit the numbers we give to our clients are "Prices."

   As far Excel basics are concerned there are a couple of things you should do and a couple of thinkgs you can do if you want to improve your worksheet.

   Fist of all instead of writing the note "Gray Cells have formulas do not enter data" why not set up the worksheet with the entry cells being un-protected and the cells with forumalas and every other cell being protected from entry? I see many contractors using Excel workbooks where they haven't properly protected cells containing formulas from modification and costly errors happen.

   Also while I do see you are using the defined name Crew_Rate why not also use defined names for things like Material_Cost_Total, Labor_Cost_Total, Materials_Markup, Labor_Markup and etc. so that your formulas make semantic sense when you read them.

   And if you do use defined names for Materials_Markup and Labor_Markup you can then also produce a sheet in the workbook that contains only marked up costs aka "Prices" on a line item basis to use if you need to work with you client on adding or dropping items from an estimate to meet with thier budget requirements.

   I don't know whether or not you've read Asdal's Defensive Estimating: Protecting Your Profit but one of the things he advocates and in fact uses to give a title to a chapter is Using Retail Pricing at Every Line. (It's also in that chapeter that he affirms what I said about estimaing contingeny on a line itme basis when he says "Put the Risk into the Line Item Not the Bottom Line" and "Nullify the Risk at First Entry."

7. 
   JerraldHayes | Feb 22, 2010 04:53pm | #10

   Flash while your original question is a couple of months old now I thought I would throw my 2¢ in on estimating books just for archival reference.

   As you may (or may not) know there are two important parts to producing a good estimate. Part one is estimating and/or understanding your costs of doing business; Fixed Overhead, Variable Overhead and Net Profit and understanding just how you are going to apply markups to your Direct Job Costs to recover those costs. And part two is estimating all those those direct job costs.

   For understanding part 1 people here who know me know I generally recommend two books: David Gerstel's Running a Successful Construction Company where you would read Chapter 5 Estimating and Bidding on pgs 167 through 168 Gerstel talks about using what he calls a “Capacity Based Markup” and Ellen Rohr's How Much Should I Charge?: Pricing Basics for Making Money Doing What You Love.

   And before I get to my recommendations for books on part 2 the estimating of direct job costs I want to highly recommend another book which David Meiland mentioned William Asdal's book Defensive Estimating: Protecting Your Profit. While this book wont give you any of the nuts and bolts approach to estimation direct job costs it does provide the reader with a solid philosophy for approaching estimating and contracting in general and the language and things you will need to do to "protect your estimate."

   Now as for part 2 estimating all those those direct job costs I think it is unfortunate but there aren't any really great outstanding books on just how to approach that phase. I do provide a list of my recommendation in my Quietly ReThinking Out Loud blog post Estimating Book Recommendations but in a sense I can side with GoDadGo's opinion that "No book can replace your own knowledge" but offer this caveat:

   Most contractors suck and defining, recording, and categorizing their knowledge about costs.

   If you haven't been defining, recording, and categorizing your knowledge all the years you've been doing T&M work you'll be doing all your estimating based on hunches and guesses. In that case the books I mention in my Estimating Book Recommendations can help in that they can help you better define what you need to look for and include in an estimate as far as line items and they can give you some reasonable labor hour tables to start with. Still the thing to keep in mind is this tidbit first brought to our attention from our friend here Bob Kovacs:

   Consider not only the cubic foot, cubic yard, lineal foot, square foot, pound or ton but all of the complicating conditions encountered in putting the materials in place

   (That's The Golden Rule of Construction Cost Estimating, as quoted from Richardson Engineering Services General Construction Estimating Standards)

   In my mind the key to estimating Direct Job Costs is developing a good thorough Work Breakdown Structure. You need to breakdown your projects into discrete work elements (or tasks) to a granular level that eliminates the chance of your making errors of omission (forgetting ignoring or leaving out something important or sizeable) and to a level that you can quantify the labor with some reasonable accuracy.

   On another not I also recommend measurement (take-off) based estimating as opposed to "eye ball" based guesstimates.

   The eye ball method is where you look at a grouping of tasks and generally say "I think it will take XX hours to do." The problem with that method it relies on the aged experience of the estimator, can very easily lead to errors of omission, it is very inconsitent, and perhaps most importantly it can't be tracked and verified.

   A wide variety of estimating methods are possible, but in terms of essentials, there are only two-- the "eye-ball" method and the measurement based method.

   The "eye-ball" method involves a visual inspection and then the computation of the estimate. This method relies almost exclusively on the experience of the estimator and is prone to numerous errors. Further, it is virtually impossible to teach to others, is inconsistent, and provides no means for detailed monitoring. While there are variations of this method, some being more complex than others, all are basically a "guesstimate".

   A measurement based method on the other hand forces the estimator to quantify individual tasks and materials and assign costs to them that can later be verified. In other words you need to work to develop your own set of Unit Costs. Yes I think it helps to work from already established unit costs that you may find in estimating data books as a benchmark starting place but ultimatly you need to make the defininitons and numbers in thos Unit Costs your own.

   As for your comment:

   "Those times when I AM more realistic, then the total sum for the job seems exorbitant."

   You have to learn to ignore your feelings and emotions and trust in your pragmatism and scientific and objective anylysis of the project. We always seem to surprise ourselves with almost every estimate we do just how much the work we do costs in its totality but it really should only take a few underestimated jobs to learn your lesson and trust the numbers you have down on paper or in your computer rather than your feelings.

   While there is certainly more to it than just that I think that's a start.