As remodelers, our work is truly unique. Even though a lot of our projects might resemble other projects we have recently completed, no two projects are ever alike. Strong estimates reflect this thinking, and help differentiate your company from the competition. Here are five critical mistakes we’ve all made, and advice on how to avoid them.
1. Using Square Footage Costs
Square-footage pricing for most remodeling projects is difficult to quantify because you can’t allow for the variables that drive the costs of a remodeling project, such as existing conditions and logistical access. It is always best to build each job piece by piece-on-paper to arrive at a final cost. Otherwise, subtle differences in square footage measurements can produce big cost differences.
For example, a 100-square-foot bathroom renovation that costs $20,000 is $200/sf. If I use this factor for the next project measuring 90 square feet, do I really believe that my costs will decrease by 10%? I’ll still have to pay the plumber for a sink, toilet, and shower. The electrician will still install the same number of lights. Maybe the tile setter will have a few less tiles to install, but that’s about it. Am I willing to give up 10% of project cost because the space was just a little smaller?
2. Estimating for Subcontractors
We lose the interest and support of our subcontractors when we try to tell them how (or for how much) to do their job. There is no better way to assemble an effective team than to give them the space and the opportunity to inform costs. Taking the time to walk through the work with the subs allows them to provide a clear, written estimate that they will be willing to stand behind when you get under way. As a sales tool, subcontractor walk-throughs show the owner that you see their project as a unique undertaking, and are conscientious in your approach. Not to mention that it will produce a budget you can believe in!
3. Lack of Clarity in Scope
Owners look to us to be the expert on all things construction, and will not be inclined to take responsibility for any costs that they were not prepared for. Take the time to clearly write out everything you know, and don’t know, about the work you are proposing to perform. Simply referencing a plan set is not adequate. The description should include dimensions, specifications, allowances (including allowance amount), and exclusions. This document can be separate from the budget sheet, allowing you to easily circulate it among subcontractors and employees so they may all share a reference point. A clear scope document also provides for an easier conversation when change orders arise.
4. Uninformed Scheduling
Every day spent onsite after the planned completion date means lost money for the remodeler. A clear construction schedule includes two components: lead times and production.
Lead time items include any special order parts, but should also include permit review, selections deadlines, and related milestones. A start date named upon completion of these milestones helps avoid any lost time onsite due to ordering or approval delays.
The production schedule lays out the duration for the individual trades and their relationship to one another. This helps the remodeler project time required of a lead carpenter that might not be directly related to carpentry tasks, but still requires him to be onsite.
5. Fringe Expenses
Sometimes we become too focused on the task at hand to see what other work is required to complete a job. Take the time to step back and look at the big picture to identify what you can do to make completion of a simple task great. Oftentimes, this applies to materials and time for site protection and cleaning. Other specific examples include paint touchups after hardwood floor refinishing, or window washing after exterior paint work.