Tough Nut To Crack

As a remodeling business owner, I had to wear all the hats as I started out. Turns out estimating is not a strong suit and there is no right way to do it. I had been fearful for years that I was not charging enough or in some cases charging too much. Both directions are a failure in my eyes. Discovering errors, I would internalize them and vow never to do that again, but my projects are always different, what was I going to do?

Upon selling a project I got this “Oh my gosh what have I just done?” You are supposed to be happy when you sell a project, nothing makes me more uneasy than the lack of confidence in my estimate. Was I demanding an accuracy that was not available? The pressure was paralyzing at times. I felt like I had been taking my business down a country road with ruts on both sides and a loose steering system. Oh, the stories I could tell. So naturally, I asked for help.

You’re Not Charging Enough!

The first thing any supportive remodeler tells a fellow remodeler that isn’t making his margins is, “You’re not charging enough”. My reply was “I know, what should I charge? I’ll gladly do it”. Turns out, it’s not that easy. I was not estimating correctly, which would have been a much better way to say it. I had to figure it out on my own. Reading books and listening to industry leaders also helped me put the pieces together. A friend in Texas found his solution in a software suite. I tried it and hated it.

There is no one size fits all way to estimate. The important part is that estimating is done the same way every time and then taking the time to measure the results. Ione step further that is essential is compiling the results for further reflection. In my world, ease of operation, speed, and accuracy are what matter. This is one of the fantastical things about being a remodeling entrepreneur, I feel like I am also a pioneer. Understanding that as the company grew I could take off hats and estimating came right after accounting.

There Is No Better Feeling

Now that I have established confidence in my systems, I have the luxury to work on the business of selling and creating great remodeling projects at the right price. No two remodeling contractors do estimates the same way. Most contractors are constantly improving systems until they have one that works OK, FFN (Forever for Now). Then they go work on it again when it really gets out of wack. We use a trust but verify system because we are all human. Prior to presenting a price, we host a site visit for production and as an admin team, we huddle to make sure we have taken all things into account.

It’s A Number, I No Longer Take it Personally

I am able to be as emotional as a checker at a checkout stand at the supermarket when they tell you the price of the groceries you’ve selected.

Our Levco Estimating System

Ultimately after trying several people who did not work out, we hired a person with the talent, personality, and ability to estimate. He slid into his role with style and grace. He loves what he does and feels like he has everything he needs to be successful. The results are accurate and stunning. Our solution is to use several complementary programs with plans and specifications that are approved before we start the process.

1. A “Take-off program”
2. Mining the gold in our accounting software.
3. Walking the jog Getting hard bids from sub-trade partners who have the correct information to bid on our work.
4. Having decent plans and exacting specifications
5. A program that I created in Excel called our “Secret Sauce” to tie it all together

How Do I Know It’s Working?

Just checking the bank account, or looking at the financials monthly (Which I think most contractors are reticent to do) is not enough. To that end, we insist that our crews code the same as we estimate and do an estimate-to-actual job costing biweekly with payroll. We verify that our labor, materials, and subcontractors are coming on the budget or are within a tolerable 3% variance or we explore what is going on. I am a visual guy so seeing graphs make numbers more digestible to me so I created a graphing system to keep my finger on the pulse of estimating.

Gratitude is the sense I am feeling. To have grown to the point that we could afford an estimator, and then not being satisfied until we attracted a true estimator is for me a crowning achievement.

Your comments are welcome. To ask questions or get more information about remodeling, click here to email me directly, or call 208-947-7261

If you or someone you know is considering remodeling or just wants to speak to a trustworthy remodeling contractor, please contact me. You’ll be glad you did.

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