As the owner of a construction company: What’s your biggest concern?
Estimating Errors	Time to Bid
Printing Costs	Handling PDFs
Working Remotely	Managing Estimators

Now that as MacUsers we finally have Plan Take-off tool I’d be really interested in hearing what you all think.

Well now there’s QuickEye and while it does bring a rich set of take-off features to the Mac platform its’ also for Windows users too.

They say on thier website:

"With only one to three hours invested in learning and setup, you will gain one to two hours each day in productivity."

It took me a lot less than that. They have a regulary updated schedule of Go To Meeting based taining classes that you can just call them about and speak to one of the trainers .

If you’re ready to go and want to get started right away visit their Account Setup & Purchase License page to get yourself started.

On Using “Canned” Estimating Data

Case One:

In considering the cost of installing field tile I noticed that for installing the exact same size 4-1/4” x 4-1/4” field tile that two different books from two different publishers one had a Labor Hour figure for that same task that was 41% higher than the other.

So which one is right?

To tell you the truth,…they both are. It really all depends upon how the estimator interprets the data and which one most accurately depicts the way your company performs the task described.

As I written here before:

A contractor estimator needs to look at the “canned” book figures for labor hours as starting benchmarks, they are not absolutes. The labor hour units are standard as to “generally speaking” but individual as to interpretation. They are based on valid statistical samples that those publishers have researched but we don’t know the exact criteria they had in mind so they are subject to interpretation, in fact your interpretation. Use those data book labor figures with your own interpretation of their meaning. If it “sounds right” then go ahead and use it and monitor the results to see how accurate your judgment and interpretation actually turned out to be.

Also in talking with my client(s) about those figures for laying tile it was my considered opinion that laying tile that makes up an edge where you have to cut the tile is perhaps twice as labor intensive as the general field so to really develop a good pricing system for tiling you need a SF Labor Hour figure for the main body tile and a LF Labor Hour figure for the edges.

While I think any tile installer will tell you it is more expensive to lay tile on the diagonal than in a square grid pattern it is really only the perimeter edge work which is more labor intensive and therefore more expensive than the field where you are essentially laying full square tiles just like you do in a basic square grid installation.

I have yet to see a data book that mentions that or gives a special labor rate for that consideration.

What is essentially that same thinking then again also applies to other task such as installing trim for instance. If you strictly use a LF (Linear Foot) Labor Hour figure for installing trim when you get to that quirky 14′ x 16′ library that instead of just having 6 corners requiring miters or copes instead has 36 that price per LF wont work. You need to have a Labor Hour per joint figure for work that exceeds a typical amount of cuts in a space.

Case Two

Lets say that a hypothetical Kitchen and Bath Contractor is perfectly happy with one of those tile installation figures for the work his or her own employees do. The labor cost plus the material cost figure regardless of which markup method you use, Capacity Based or Volume Based, gets marked up to give you a price for that task.

The next thing the estimator does is look for the task of installing the sink, toilet and shower and again a markup is applied to that to give you a Price for that group of tasks.

The problem is that the "Price" that comes out of that book or software with the markup applied is really the "Price" a plumber should charge for that work. The "Price" the book is telling you to charge your customer is actually more realistically the "Price" you are going to pay your plumber for the work. That book "Price" is actually really your "Cost." If you use that figure to charge your client you wont make a dime on that subcontracted work even though you thought an appropriate markup was applied to it.

And Case Three

After correcting and adjusting some imported data for roofing for that subcontracted work markup problem I just mentioned I noticed that the base costs for some of the material budget costs seemed off to me.

Checking the figures that that particular book was giving I made some calls and compared them to some real material cost figures from actual real suppliers.

The cost they had designated in that particular book and data set I was working with for Laminated Lifetime Shingles was 211% higher that what the local cost actually is and the cost for the "economy" alternative 3-Tab 25 Year Shingles was 35% lower than what the local cost for those shingles are. You therefore might overprice yourself out of the better LifeTime shingle job or lose money providing the economy alternative if you trusted the book data.

Again I think this all goes back to what I said earlier.

…Use those data book labor figures with your own interpretation of their meaning. If it “sounds right” then go ahead and use it and monitor the results to see how accurate your judgment and interpretation actually turned out to be.

Actually come to think of it. I wouldn’t wait for the results to come in to see how accurate your judgment and interpretation is. I would check the figures before ever using them in an estimate.

As helpful as using that data can be to get yourself started there are some real intrinsic problems that come along with using that data as it comes right out of the can so to speak.

All the way back in 2001 in a discussion on the Uniformat & Masterformat classification systems in the JLC Online Forums years ago Jim Erwin the developer of the now defunct Synapse Software Buildworks once wrote regarding the use of “canned estimating data”:

Re: Uniformat & Masterformat systems IMHO, doing detailed item estimating for residential using national costbook prices is like using a community toothbrush. If someone is going to the time and effort of detailed item based estimating, they should only be doing it with their own regular items and the current prices that they pay. If they don’t want to make that effort, then they should be doing unit cost estimating with composite line items and historical data. Considering the narrow margins, high cost of delivering a finished product, and the risks of running a business, just “winging it” is a formula for disaster. Estimating is not a total solution. Defined work processes, effective controls, professional customer relations, and a method of measuring and comparing performance all have to be a part of a successful plan for profit.

And back in 2004 my friend Bob Kovacs in another JLC Online Forums discussion comparing two other estimating products Xactimate & HomeTech again got to the subject of using canned data.

RE: What are the Top Estimating Software Packages? …On top of Joe’s comments regarding output, I’d also be concerned with input. In other words, where is the data coming from that’s in the program? Most of the guys I know who use Xactimate and/or Hometech use the data that comes with the program, which scares the life out of me. They’re playing with the law of averages, hoping that their actual costs are lower than the programmed cost more often than they’re higher.

Given that, if you plan to insert your actual costs into the program, have you considered the time you’ll need to invest in setting all of that up and maintaining it? It’ll kinda negate the “advantage” of being able to download quarterly updates from Xactimate. Is the time needed to do that offset by the bells and whistles you see in using Xactimate over your current spreadsheet?

To which Joe Stoddard then also commented:

RE: What are the Top Estimating Software Packages? …I totally agree Bob – my belief is that everyone would be better helped if these packages shipped with a *blank* database, but that’s what sunk Quantum Leap. Everyone wants a magic button that gets them out of taking off a plan and calculating costs. One of my biggest challenges as a consultant is trying to get client expectations in order.

1) Just because there’s a cost next to an item, does not mean it’s YOUR cost – even if you subscribe to the “city update” or “local cost modification service” They’re a guess, not a fact.

2) Just because you can import a budget does NOT mean you don’t need to check it, add/subtract as necessary.

3) Just because there’s a suggested manhour count does not mean that’s your productivity, and it should not be the basis of your actual construction schedule. Xactimate does not have a separate “subcontractor” category (you simply set up items as lump sum, or hourly with no labor burden) – so therefore you have to assign/check durations when stuff imports over in to Project. I had a client who actually thought they could base their final construction schedule on the estimate without checking it or tweaking.

Worse, I actually had a client importing stock budgets from Xactimate into their accounting system, not checking them or tweaking, and then complaining bitterly about the estimating software because their job costing was all out of whack.

[...]

While I very much feel the same way as Jim Erwin, Bob, and Joe we do provide a starter set of data with our 360 Difference program that is based on all the data I have collected from various sources and modified over the years the keyword there being “MODIFIED.”

I think the data in the database books are a good place to start in that they provide both a framework to look at and organize your costs and they provide a starting point off of which you can begin to set up your own numbers. And by starting point let me further clarify that to say they should be used as a starting point for the labor hours assigned to a line item task. The actual cost for the labor and the cost for the materials really do have to be your very own numbers.

My own reasoning for that thinking is as follows. First of all if an estimate line item cost is based on three criteria; the labor hours the task takes times the labor cost plus the of materials by relying on your own numbers rather than the “canned” data for those costs you’ve just reduced your potential for error by 66% and your actual costs for labor and your costs for materials are relatively easy to pin down.

Labor cost can be pinned down and defined with tools like our own Capacity Based Markup Workbook or Diane Gilson’s Employee Cost & Pricing Analyzer™(eCPA) or just purchasing Ellen Rohr’s book How Much Should I Charge?: Pricing Basics for Making Money Doing What You Love and following the procedures in it with a pad, pencil and calculator.

As for material costs building a materials list of just what is needed is probably the very first thing we ever did the first time we ever did any project and while it is still possible to make errors it is a relatively simple objective task.

It’s estimating the labor hours that a task will take where the real difficulty of estimating comes into play because estimating that time contains so much subjective analysis and judgment.

A contractor estimator needs to look at the “canned” book figures for labor hours as starting benchmarks, they are not absolutes. The labor hour units are standard as to “generally speaking” but individual as to interpretation. They are based on valid statistical samples that those publishers have researched but we don’t know the exact criteria they had in mind so they are subject to interpretation, in fact your interpretation. Use those data book labor figures with your own interpretation of their meaning. If it “sounds right” then go ahead and use it an monitor the results to see how accurate your judgment and interpretation actually turned out to be.

One of the neat features I have programmed into the estimating module of our 360 Difference system is as you review and approve the starter database items or any “canned” database items in your unitcost costbook in the detail view for an individual line item you have a checkbox you can check off to indicate that the data components in that line item that you have “approved” and the software also gives you a visual cue or warning to let you know what data hasn’t yet been accepted and “approved” as your own company’s data.

Once you check off the Labor Materials External Sub Contractor or Equipment components as approved (You can lick on the thumbnail image on the left to see a screenshot of a line item detail and the thumbnail below to see a screenshot of the list of costbook items in that sub-category) the field containing the total for that particular component changes from pale orange to white and that pale orange flagging color is user modifiable too if you want to lets say change it to pale yellow or red.

The estimator can then quickly see if the data they are using in an estimate have been used before and has been modified or approved for their own company’s use and they can even review the date it was reviewed and approved too to make sure it is up to date and current.

I always cringe a little when we get a new user who has just bought my program that tells me they want to use it to produce and estimate they want to get out to a client next week! Geesh! That’s really not the right way to work with any new estimating program.

To really use any estimating program correctly and accurately you need to do your homework and spend some time setting it up correctly (and we’re very happy to work with and help our clients do just that from training then on how to do it themselves to working as their virtual assistants, like someone in their office, performing the set up process for them).

Our goal with 360 Difference Estimating is to give our users the tools , training and help our users need build a library of estimating data that is truly theirs.

While this may take some time and effort in the beginning it pays off in the long run due to both the accuracy of the costbook line items they’ve built and they no longer have to put their faith in money into purchasing cost books year to year with quarterly updates.

Click Here To Download a Demo of the 360 Difference Estimating 4

Other articles discussing the inherent problems in using “Canned” Estimating Data:

Journal of Light Construction February 2004
Business: Using Cost Books for Estimating
Using cost books for estimating

by Bob Kovacs

This is the public beta were releasing and we have a special offer to any new users who join us while were still in the beta test period this December. Purchase 360 Difference Estimating for the the discounted price of $265.00 ($100 off the regular price of $365) and we’ll give you the "Sales" interface module when it’s ready so you can estimate projects from your iPad* (*360 Difference requires FileMaker Go to run on a iPad) and the other 360 Difference 4.0 Modules too as they roll off the assembly line.

Click Here To Download a Demo of the 360 Difference Estimating 4.0 preview

For a limited time we’ll also enroll you in the beta test release programs for our other 360 Difference Modules that you see on our start-up screenshot below as we bring them up-to-date.

If you don’t already own a license of FileMaker Pro 11( you can try out a demo of FileMaker Pro 11 too by clicking here: FilemakerTrial.com) the Runtime versions of our programs have there own a built-in FileMaker engine and run with the only restriction being that the program wont produce PDF documents from within the application.

Any questions? Feel free to give me a call at 914-301-5838 and if your a Macintosh user using Tiger 10.5 or later I’ll be very happy to give you a live online demostration of the programs capabilites using the Share a-Screen capabilties in Apple iChatAV. Again, any questions about Share-a-Screen just call me and I’ll talk you through it too.

Unfortunately there aren’t a whole lot of books out there to choose from but still there are some good ones that are well worth the time.

On the top of the list I like Defensive Estimating: Protecting Your Profits by William Asdal, CGR. It’s not about how to estimate a kitchen, a deck or some other project in the literal sense in terms of what items to include and look for but is instead a book about the "big picture" of estimating and is about approaching estimating with a particular type of viewpoint and that is one of "protecting your company’s profit" which is very different than an estimating mind set that many contractors dangerously adopt which is "estimating to get the job".

The lesson of Chapter 2 Establish the Company Profit Number Based on Your Income Needs which again so many contractors fail to do is alone worth the price of the whole book.

Chapter 6 Using Retail Pricing at Every Line brings up a point I’ve often talked about when considering ‘risk’ in building and remodeling projects which is to ‘Put the Risk into the Line Item and Not the Bottom Line‘ , in other words ‘Nullify the Risk at First Entry‘ so that it can be specifically dealt with based on the risk of the task the line item describes.

And he concludes the book with chapters that give some great example of contract and specification language that can be used by builders and remodeler’s to defend their profits.

I highly recommend this book. I thought it was interesting though in reading the editors description of the book they say "Asdal takes the magic and science of estimating and turns it into an art." whereas I would say "Asdal takes the mystic and mystery of estimating and turns it into practical science". I think a problem many contractors have is they view estimating as some kind of mystical purely intuitive art and therefore never really develop the repeatable scientific methodologies (systems) for approaching it and it becomes a mess.

As for the nails, screws, nuts and bolts of producing an estimate and to what to actually look for in estimating particular projects and trades I think Estimating Building Costs by Wayne J. DelPico and Estimating for the General Contractor by Paul J. Cook are pretty good for that. You will get things from them such as how to calculate liner measure, are and volume and then what to look for as you produce cost estimates in the individual trade areas.

Where they are lacking is in connecting the COST of production to the PRICE you need to charge to run a business.

Two other books I think that are very helpful and good resources to have in the ‘nuts and bolts of producing an estimate’ category come from R.S means and are entitled: Kitchen & Bath Project Costs: Planning & Estimating Successful Projects and Home Addition & Renovation Project Costs: Planning & Estimating Successful Projects . And like the two books I just mentioned these two book don’t do a good job of connecting the COST of production to the PRICE you need to charge for your services and are in fact terrible in that regard. Under no conditions should you use these books to actually price a project out. Instead use the line items lists and the project commentary on what to look for as basic templates of what you will need to estimate. Then substitute your own labor, material, and subcontracting costs and markup structure for what they give you.

Given this list people often ask ‘Well, what about Jay Christofferson’s Estimating With Microsoft Excel and while I have read it and keep a copy of it for reference it’s more about using Microsoft Excel to build a software tool than how to actually "estimate" anything so that’s why I don’t include it on this list of ‘Estimating Book Recommendations’.

In the introduction to his book Leadership Is an Art, Max DePree says:

"In some sense, every reader "finishes" every book according to his or her experiences and needs and beliefs and potential. That is the way you can really own a book. Buying books is easy; owning them is not. There is space for you to finish and own this book. The ideas here have been in my mind for quite a few years, changing, growing, maturing. …As a child, I often watched adults study books and learned one of my first lessons about reading. They wrote in their books. Intent and involved readers often write in the margins and between lines…Good readers take possession of what they are learning by underlining and commenting and questioning. In this manner they "finish" what they read."

Well that’s me. My books are more often than not full of underlines, circled text, highlighting, and post-it notes. Their pages are sometimes wavy and wrinkled from being soaked from the sweat dripping off my brow on as I read them on a stair master or stationary bike.

Recently an online friend said to me he’d like to not just get a copy of Defensive Estimating: Protecting Your Profit
but that he like to get my personal notated copy of the book. I thought it was funny reading that in that he pretty much figured out on his own what I did to the books I read so I took a photo of it at the time to document it.

It turns out I’ve got whole bunch of books that look like that or even worse. Tom Peters’ Liberation Management: Necessary Disorganization for the Nanosecond Nineties which was perhaps one of the books that really inspired me to go on the business book reading binge that I’ve been on for over a decade now. It was in fact the book I was referring to above whose pages were all "wavy and wrinkled".

The finish contractor would either lose their shirt pretty quickly or the better and smarter GCs would recognize that you were out of your league and didn’t know what you doing.

And likewise if the GC is looking for a SF price either they either don’t know what they are doing or they are looking for a finish contractor they can take advantage of because there is absolutely no correlation between the SF footprint of a house and the cost of architectural woodwork installation. Most trim work (although not all of it) is based on linear footage (i.e. baseboard crown etc.) or by the piece, assembly, or unit (such as doors) and when a ‘square foot’ unit cost does come into play it has nothing to do with the square footage of the structure and instead relates to the square footage of the material being installed.

Okay those warning and admonitions aside the key to estimating trim is producing an accurate project takeoff. Think about what you need to include in your estimate. Did the GC give you a scope of work document to tell you just what he or she was looking for you to do? Finish carpentry includes such items as:

• doors and door frame
• finish hardware installation
• cabinets and shelving
• milled trim
• non-milled but exposed to view trim
• wall paneling
• stairs and stair railings

And you need to takeoff and plan for fasteners, biscuits, dowels, glues, putty, bondo etc. even if they aren’t included on the plans and specifications you are looking at.

You need to know if the GC is expecting you to supply all those materials, some of them, or none of them? If you are supplying the materials (maybe not the best idea if this is your first "real" trim project when you’re working for an experienced established GC) then you need to get prices for the items in your takeoff from the various suppliers. Be sure that the time it takes you to perform the take-off and the the time it takes you to shop your materials list is included in your bid in one way or another (otherwise you are giving away your time for free).

You also need to keep in mind what the probable state of completion (fabrication)of the items upon their arrival at the jobsite. In other words are the doors pre-hung or will you be assembling jambs and installing the door in place? Are the cabinets finished and ready to install or are they knock-downs that need assembly on site. Same thing regarding the stairs. Are they site built, a knock-down kit, or are they coming fully assembled and all you have to do is install them. And what about the railings? I think stairs are easy and it’s the railings that are really difficult. Some items such as closets and bookshelves may come in part or pieces all ready to be installed or you may have to cut and fabricate them from materials on site.

Having considered all the materials you now need to look at the labor involved. You need to both think of a labor cost related to each and every associated item on your takeoff and also:

• Unloading of materials from trucks, handling and temporary storage and protection
• Special tools equipment and scaffolding
• Handling and hoisting materials from storage to final position. (generally applies to stairs but can apply to other things too such as safes or large cabinets)
• Incidental associated items of work such as backing in partitions for the securing of cabinets and trim.
• Who is going to prime or seal the trim before installation?

Arguably another good idea, especially on the intricately detailed jobs is to take off the number of cuts your crews will need to make to install and fit the trim. While you still need the linear footage of the trim to calculate just how much trim your cost of labor is more realistically ties to the number and difficulty of the cuts your crew needs to make (see Cost Driver and Cost Estimating Relationship for the technical terminology describing those relationships). Typically we price trim installation by the linear foot and add a ‘per cut’ cost modifier only when the particular project or room exceeds what we feel is a ‘typical installation’.

In some of the discussions I’ve been involved with online with neophyte interior finish contractors I’ve recommended that they go out an purchase a Craftsman Books – National Renovation & Insurance Repair Estimator and use the Man-Hour labor estimates that are in there as they apply for the kinds of work you’ll be performing times your Loaded Hourly Billing Rate. I recommend the NR&IRE book as opposed to some of the other ones out there for finish work in that that book has the widest range of finish items that I have seen.

I say to use the Man-Hour calculations rather than the labor costs that they have computed out because your Hourly Rate is unique and I think most every ones Hourly Rate is. They may average around a certain number in a certain range for a certain kind of work but we all have different schedules of overhead calculations and there are regional differences too.

You also might want to check out Jim Tolpin’s Finish Carpenter’s Manual. One of the real good things about the book is at the end of each chapter he gives some of his own man-hour figures for the task he has just described and there a good foundation to start from in building your own. Also check out the new edition of Gary Katz’s Finish Carpentry: Efficient Techniques for Custom Interiors, No man-hour figures in it but it’s full of great technique ideas. I now use both those books as training manuals for new hires.

There are certainly more subtleties involved in producing and interior finish carpentry estimate but this presents a good foundation to build on.

“I live in houston and I am a trim carpenter. I do such a variety of things that I never have know the going price of some of the work that I do. I asked this same question here at FHB and i was told then that I shouldnt get involved in footage rates; that I should price by the job. I generally do that but I would still like to know the going rate on some things so I can stay semi-competitive. Example:

I have a woman who wants crown installed in all of her house. 40 feet of it is about 25 feet up in her entry way. She also wants it painted. She also lives 25 miles out in the boonies, ( no stores within 10 miles). I want the job but I am REALLY REALLY REALLY tired of bidding a job and realizing midway that I underbid ,….AGAIN!!! On the other hand I don’t want to miss out on the work. (plus, she is sorta cute, he he). I am not asking for a free bid I just wants some input on factors that would affect the price. Honestly!, I am tired of underbidding. I mean damn tired of it. I have jacked my prices up 2 times when I was busy and didnt mind if I got the job or not. Both those times I didnt get the job. 80% of my jobs I realize that I should have added a little more to the bid. I always write it off as inexperience or a learning experience. Other contractors I know say that I am too honest and thatI should remember that i have a family to feed. On the other hand my repeat clients say that they like me because I am hobnest and fair; which explains whyI have repeat clients. Any help would be appreciated thanks.”

I wrote in reponse:

Cutawooda- the best I could do is tell you what we would charge for your project and you might take it from there either rejecting or accepting our price and the mechanics of how I came up with it. However I will tell you right off the bat we do not sell our projects on the basis of staying competitive. You either want or need us to do the project or not.

1. I don’t care what everyone else charges.
2. I know what it takes for us to do the work
3. I know what it costs for the people I use.
4. I know what I want for a return on my investment in my company. (In other
   words I know what I want to make)

BUT having not seen the project I still need some more information.

1. How much total crown for the total project?
2. Are you supplying the crown?
3. What kind of crown? (hardwood, softwood, urethane, or plaster)
4. What size crown?
5. What kinds of joints? Miter, cope, scarfs?
6. Any tough joints or a a higher than average number of joints?
7. You mention 40 feet of it is about 25 feet up in her hallway can a scaffold
   be set up easily in that space without damaging the floor or walls?
8. What other temporary protection will need to be set up elsewhere?
9. What size crew do you plan to deploy or is this a one man job in your mind?
   ( You made no mention of your crew if you have one)
10. Painted how? Prime and two coats or what? We virtually always paint and
    then install all our millwork and then schedule a post installation touchup
    or final coat.

You shouldn’t get "hung up" on linear footage rates but you have to have an idea of a linear footage rate as a base price to which you can then modify specifically for a project given conditions. In other words if the typical crown molding price is $8.50 per foot for a normal room ( 8′ to 10′ ceiling) then that price needs to be modified for the difficulty or working up 25′ on a scaffold plus the cost of setting up and taking down the scaffold.

With regard to your statement:

“On the other hand my repeat clients say that they like me because I am honest and fair; which explains why I have repeat clients.”

Watch it! The real danger in that statement is you actually don’t know whether they like you because you are so "honest and fair" or because you are so frigging cheap. Your repeat clients are never going to tell you the truth about what they say about you behind your back. Translation: more often than not "Honest and Fair" is client speak for "frigging cheap".

He then replied back :

“Thanks for your response.

Actually, I am pretty good at trimming. I am a one man crew and got a good rep for doing quality work. The tall stuff I was going to get a helper and another 24 foot ladder. (ladders since there is a stairway obstructing). It is preprimed fj crown. 4 5/8

10 foot ceiling in the rest of the house. Front room she want a squares on the wall below her chair rail to immatate wainscotting. Probably around 12 of them.

I was going to prepaint everything as you do, install it, and then t-up.

total footage on the crown was around 200. 40 of it was 25feet up.

the wainscotting was going to take me around 2hours I figure. Layout about 30 minutes and 1.5 install.

Also, I need to invest in a larger chopsaw. My 10 inch doesnt cut 4 5/8. this is the third job I have recieved that wanted taller crown and its a pain in the *% without the right tools.

I figured the job at $1600.00 that is time and material. What do you think?

I am REALLY trying to be competitive. But I am really trying to “cross the line” and become a business man as well. And I am ready to cross over from “just making it “to assuming the a more responsible position and making some money. I have seen too many “hot shots” go out and experiment on a clients home only to fu.. it all up. I am so cautious about doing good work and casting a “Knowledgeable appearance” , that I found it easier to be a sub contractor and hide behind the skirt of the contrctor who hired me. And it is alot easier that way. Let them do the figuring. But I have seen others workmanship, and I have seen their bills to the clients, and I realize that I am doing better work and charging less money. I cant avoid the occasional handyman or hispanic that comes in and underbids me by 80% but I can learn from guys like you and avoid an empty bank account because I forgot to “pad ” for the days when its a rain out or when the phone just doesnt ring. (The latter just happened for 2 weeks).”

I then came back again with:

Okay Cutawooda, Nothing long with lengthy posts per se. Ya gotta say what ya gotta say to get your point across. I came up with a Price of $1740, wainscoting not included with my Costs coming in at $1130 (costs being Wages, Labor Burden & Materials). For this kind of small project we then markup materials 30% and markup the labor subtotal 65%. The wainscot thing was unclear to me so I ignored that in all my stuff. I’ll try and give you the break down of just how I came up with that price as soon as possible so you can pick it apart and modify it. Just as a point of reference there we two Labor Billing Rates I used in computing this project see the table below.

It going to take me a little while to write out and illustrate how I came up with my price in HTML but hey that’s a start.

And a day later to explain that estimate I wrote:

The Crown Installation Estimate

First of all I view one of the the jobs of the estimator as a little more than just entering numbers from an estimating book or database on to a spreadsheet and then totaling it all up. I think the estimator needs to design how the project is going to be handled. What’s going to get done, in what order, how, and by who. That’s all because if it’s not down the way he or she planned it then when it comes time to perform the forensic Job Costing on the project you’d be comparing apples to floppy disks. They’re not even remotely similar.

In the case of this Crown Installation Estimate I divided the job up into three hunks, chunks, quanta, phases or what ever you want to call then and estimated each discrete hunk separately. I actually call them "pocket" estimates to metaphorically imply that they are small easily handled hunks of information that you could keep in your pocket. I try to keep them as a discrete contiguous group of tasks that can be done as a whole. That helps later in both scheduling the work and defining payment schedule parameters. You could also think of these chunks as Work Orders. Essentially any client project estimate can be broken down into several individual work orders.

For the purpose of estimating I divided this project up in to three chunks.

1. Set-Up & Preparation
2. The Trim Installation
3. Painting (final touch-up) and Takedown/Close-out

1. Set-Up & Preparation
I figured to do this project I would plan to have one my carpenters go off to Home Depot to pick up some of their primed finger jointed trim. He would then return to the shop and -lay the stuff out > sand the primer > spray back and fronts with Benjamin Moore White Metal Wood Enamel. He’s then done for the day with that project and can move on to something else. Probably 4 hours of time but I estimated it at 5. The Hourly Billing Rate for that carpenter (what I call a Carpenter-B) is $56.80.

Just a quick note here, These figures are copied right from my estimating program and it automatically rounds of the Price line so 172+111.80=283.80 which is then rounded off to $280

2.The Trim Installation
For the next phase I selected a Unit Cost from our Internal Cost Database for the Trim Installation and entered it twice. For the first entry I filled out the Quantity as 200 for the total Linear Footage of the Project. For the second entry I entered 40 as the Quantity to account for the 40 feet of installation that had the increased level of difficulty because of the 25′ ceiling height and narrow confines. Since the material was already accounted for in the first line item I deleted the material cost from the second so it wouldn’t extend out in the calculations. Essentially I’ve charged twice as much for the labor on the high section of crown.

As an aside while doing this "chunk" of the estimate I knew that the material budget line cost for the crown in this case was different from what I was actually going to be getting. The $2.10 per foot was for a stock clear crown and I was getting some pre-primed finger-jointed pine from Home Depot for just $.89. For such a small project I didn’t bother with making the change in the price. I was installing a painted finished final product so since either material would meet the performance specification I let slide and decided the company would earn the excess on this project knowing full well that somewhere sometime in the future I will estimate short and that excess will help cover that in the future.

While there is 1% figured for Contingency in my company’s Overhead Markup I’m sort of padding that Contingency a little further with that $242 dollar difference knowing that the slightest little thing can turn such a small project like this into a money loser.

On a larger project I probably would have made an adjustment for the change in the materiel from the Cost Book Item to what I was actually using. Regardless of that I still however would have specified in my proposal that I was using FJ trim and not have represented it as clear pine.

The carpenter actually doing this installation in this particular case is not the same Carpenter-B @ $56.80 per hour that I used to set-up the job. I’d be sending a Carpenter-A @ $79.40. That’s because the total lineal footage of the project should be able to be done in 8.6 MHrs meaning it was a one day project for one guy. If it had been a sixteen hour project I might have sent two Carpenters either an A-B combination or a B-B group but I wasn’t going to do that for just an 8-1/2 hour project. The A-B or B-B group probably could have done it all in just 4+ hours but then they would have to travel to somewhere else for the rest of the day and that wouldn’t have been as efficient a use of their time.

I was doing the project in oil paint so I needed the overnight for any touch-ups to dry. As part of the "Work Orders for this "chunk" would have been instructions to fill nail holes and caulk as required so that on a final visit the whole thing can be Touched-Up or another coat of paint applied. In other word get as much done as possible so the remaining tasks to finish the project can be kept to just one trip.

3. Painting (final touch-up) and Takedown/Close-out
For the final coat and touch-up and clean-up I’ve got that same Carpenter-A @ $79.40 who did the installation going back there again to: apply a final coat > fix any problems > clean-up > present the bill and pick-up a check > then return clean brushes and put away any tools and equipment that he or she wouldn’t need for the next project. I budgeted that at five hours knowing that it would probably take three maybe four.

While that’s just the way that I would have done the estimate for this project I’m really entrusted in getting some feedback on the pros and cons of the technique and my thinking. While it took a couple of hours to write out this explanation of just how I did it it actually took just 15 minutes to do the actual estimate either entering or looking up all the data in my estimating system. The extimate numbers and client information are automatically entered in to a Contract form so the only thing I had still remaining to do was to tweak the payment schedule numbers however I wanted them to appear. Probably $600 with the $1140 balance due on completion.