The Holidays Have Begun

I trust you have all had a wonderful Thanksgiving Day. We certainly have a lot to be thankful for. 

This week I’ll share with you one my micro-processes, the estimating process.


The design-build processWhy Have an Estimating Process?

We wrote this micro-process so that we could clarify our estimating guidelines and we could quickly bring a new estimator up to speed. Estimating is one of the most important parts of your business. If the estimate is wrong, you are going to suffer the consequences, and sometimes they can be quite severe. So it’s wise to have a set of rules to go by; rules that your partner or whoever reviews your bids, can hold you accountable to follow.


How a Guideline Works

The process is quite simple and logical, yet you’d be surprised how many times you’ll be tempted to stray from these guidelines. And almost 100% of the time, leaving the well worn path causes problems down the line. For instance, how many prospective clients have you had that try to negotiate a lower price? And if you look back on those that did, and that you gave in to, how did your margins look at the end of the project? I’ll venture to guess that that client was the very one that made sure you didn’t make much of a profit. It might have been better to let the project go, rather than acquiesce. 

Let’s look at an example of what an estimating process might look like.


The Estimating Process Example

The Estimating Process

Follow this procedure when you perform an estimate


1. Enter Client Information

a. Review all information that you or the salesperson gathered on the measurement visit to the client’s home as soon as possible after the appointment. If a Design Retainer has been signed, proceed with the design work.

i.  Expand and clarify notes with the salesperson as necessary, so that the information is not forgotten.

b. Use measurements, notes, sketches and photos to make drawings of job; include all pertinent details.

2. Create Project Specifications and Estimate

a. Use Form [#xyz] (if you use numbered forms or templates, specify which one to use)

b. Start estimate with the client’s name, date, address, etc., and fill the estimate form completely, starting with Item #1 through Item #25 [the amount of categories in your estimate depends on what estimating program you use, e.g., CSI uses 16 Divisions. Hometech is used in this example, and they use 25 categories, from Permits (#1) down to Clean-up (#25)].

i.  Double check to make sure you didn’t forget any item that needs to be in the estimate. Filling in each category, if it is relevant, will serve as an outline so that you won’t miss an item. If the category is not relevant, then insert “Not Applicable” on that line of the Proposal. It is important to include all categories in the estimate and the proposal, even if they aren’t relevant (N/A).

c. Figure the quantity, square feet, etc., of all Items #1 through #25.

i.  Double check that all numbers are correct. 

3. Obtain Quotes and Prices

a. Use the most current edition of “Hometech Remodeling and Renovation Cost Estimator”. [Whatever estimating program you use.] 

i.  Note the unit price of labor and material of each item.

b. Quotes by material suppliers

i.  Call or send a Request for Quote (RFQ) to suppliers to obtain a quote, size, model number, and delivery date if applicable.

ii. Enter the above information on the Purchase Order form, including to whom you spoke and date. 

c. Quotes by subcontractors

i.    Call or send a Request for Quote to all subcontractors that may be involved in the project.

ii.   Obtain written quotes from all subcontractors that you use in your bid. 

iii.  Enter the above information on the Work Order form, including to whom you spoke and date. 

d. Mark-up the estimate

i.  All bids to be marked-up in full by the mark-up multiplier specified by [Company name]. No exceptions!

ii.  All costs should include full mark-up, even Change Orders unless they are done on our specified cost-plus basis.


a. Jobs that are under-bid mean that [Company name] loses and so does the client.

i. Do Not Cheat the Client By Under-bidding. He or she deserves the highest quality and customer service that we can deliver.

4. Review the Estimate

a. Review your estimate and “massage” the numbers, i.e., adjust unit prices that you know, from previous job costing reports, need an adjustment.

b. Put your estimate aside for one day and then carefully review it the next day. 

c. Before the bid is presented to the client, you must have it reviewed by one of the office staff. [This could be your spouse, your supervisor, or trusted friend.] 

d. Write-up a Summary Quote or a Proposal for the completed estimate that has been reviewed and accepted by the office staff member.

5. Present the Estimate and Proposal

a. An appointment should have already been set up on the measurement visit, for the prospective client to come by the office for the presentation of the Summary Quote or the Proposal closing.

b. If an appointment cannot be held at the office, set the appointment to meet at the client’s home. 

c. Never present an estimate by phone.


Customize the Template

Do you already have an estimating procedure in place? How does yours differ from this process? Share your opinion by writing a comment below. 

The above process write-up is merely an example. You need to customize it to fit your particular way of estimating. Do this now. It won’t take an hour of your time to complete it, using the template supplied below. When it’s done and you have your own estimating micro-process, you will be in the top 5% of the remodelers who are serious about growing their business the right way. A huge percentage of businesses never write down any procedures, but those that do are the ones on the right track. They are the successful companies you read about that are prosperous and growing.


Download the Template

Click to download the process above in Word format (docx). Take a few minutes to modify it to fit your company’s way of doing business. Once it’s done, you can use it for years, over and over again. Revise it when it needs improvement. Remember, even if you are doing the estimates by yourself, this procedure will clarify the steps you should take with each estimate you make. Clarity creates successful companies.

Wishing you the best of fortune, Randall

Randall S Soules
Remodeling coach, adviser, and educator
My one-on-one coaching will take your remodeling business to new heights!

This article was written by Randall Soules, creator of the Scientific Remodeling System, showing you easier ways to advance your business, raise your profits, and improve your life, through the use of superior  remodeling processes. If you would like to learn more about this eCourse, click here.

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