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5 Steps to Smart Estimating

Don't let "ballpark" estimates turn your jobs into profit-killers

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Key Points
  • Complete and thorough estimating will help you stay profitable.
  • Keep all your estimates as a record of what went right (or wrong) with each job.
  • Take the time to consider every aspect of the job.

At the end of the day, the success of a job is determined by two things: 1) how happy the client is with your work and, 2) how happy you are with the results in your pocket. Assuming your work is solid, every client you have will be a happy client. How happy you are ultimately depends on your ability to estimate well.

While it's true that ballparking numbers and using multipliers can land you a lot of business in short order, the truth is, those approaches also have potential to leave you short. Being thoughtful and complete in your estimates is the best way to keep nice jobs, both large and small, from becoming profit killers.

Estimates can be built using spreadsheets, software, and good, old-fashioned paper and pencil. No matter what form it takes, be sure to retain all estimates, as they serve as a great record of what went right (or wrong) when a job is done. In fact, they're one of the best learning tools and can be key in building stronger and more profitable estimates in the future.

Accounting for Everything

It's important to take every aspect of a job into consideration when estimating. One way to do that is to work from the macro to the micro. This approach requires you to drill down to the nitty-gritty surface level of the job and get a true handle on the work involved in starting and finishing it.

Start with Scope
This step involves taking in the full scale of the project and identifying all surfaces to be prepped, protected and painted. Measure each surface (don't guess) and keep careful inventory of doors, trim and window areas.

Go Beyond the Surface
Next, examine every surface you'll be working on. Note which surfaces are finished and those that need extra prep, repair or replacement. Look for rough textures that will require more material, and hard-to-reach areas that will require more effort and time to address.

Make a Master List
With the site assessed, now is the time to draw up a list of materials needed. Tarps, primer, spackle, stain, sandpaper, special equipment requirements such as lifts or platforms and, of course, paint and primer--note it all. Break out the different types of paint and primer needed, as the costs can vary dramatically. Be sure to note any supplier discounts you may receive. Depending upon the amount of product you're using, this break can be substantial and may just provide the edge you need to get the job.

Calculate Labor and Expenses
If your labor line is not the costliest line item in your estimate, you're probably missing something. In addition to basic man-hours, this figure should also include incidental costs such as insurance, benefits, workers' compensation, accounting fees and office supplies, as well as the cost of phones, vehicles and other expenses. And most important of all, don't forget to pay yourself. Your salary should be a non-negotiable line item in every estimate.

Add a Dose of Reality
This is where you should account for any special circumstances related to the job. For example, are there a lot of surfaces to be protected or painted around? Will the space be occupied or empty? Is the client demanding approval at every stage before you can move forward? All these things can eat into hours and productivity. If you shrug them off, you shrug off profit, too.

Do the Math
With the information gathered, you’'re now ready to build a realistic (and profitable) estimate. As a professional, you also have access to a number of online tools, including paint calculators and pricing templates. Use these to speed up the estimating process or provide a quick cross-check of your work. But no matter what tools you use to reach your final number, you need to feel confident that the number reflects the true scope of the project, maximizes your sweet spot (i.e., a deep discount on paint), and leaves you with a reasonable profit on a project you'll be proud to call your own.

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