Accurate estimates begin with building and remodeling experience, but there are steps remodelers can take during production to stay within the budget.
Christine Jurs of Advance Design Studio in Gilberts, Ill., says that her husband, Todd, applies his 20 years of experience to creating estimates. “This is an art — it is not always a science,” Christine says. However, to create more systematized estimating, the company recently invested in Master Builder software (www.sage masterbuilder.com/).
JoLynn Johnson of Crystal Kitchen Center, in Golden Valley, Minn., gathered data from subcontractors and researched past projects to create a spreadsheet on the price per square foot of different elements in kitchen and bath projects. She uses the spreadsheet to quickly create a ballpark estimate for customers; for simple jobs, she uses that estimate amount as the contract price. “If the project is more complex,” she says, “then we still need to get the subs out to bid the job.” Johnson periodically updates the spreadsheet with changes in material and labor costs.
She is also a stickler for correctly applying invoices to jobs, and making sure the invoices correspond to line items on the estimate. “People who do not job-cost shoot from the hip and don't realize — until it's too late — that they lost money,” she says.
The Jurs ask their field crews to accurately complete timecards to account for the hours they spend on each phase of each job. Remodeler Joe Gradison of Gradison Building, in Indianapolis, talks to his project managers several times during the week to make sure they are on target and to provide any help they might need. “If a project manager is reluctant to talk about money with the client, I will take care of that,” he says. Gradison also says it is prudent to include a line item for contingencies in estimates: “We inevitably use that line item to account for unknowns that come up after we start.”
KEEPING CLIENTS ON TRACK Expanded product selections and additional work orders can also extend the budget beyond the original estimate. “Our job is to direct clients toward products that fit their budget,” Christine Jurs says. The lead designer “helps choose everything except for fabric and furniture,” she adds.
Gradison has had an in-house interior designer for eight years. “We do use that as a sales tool,” he says, “but, in reality, it's a way for us to control the project and to price things with actual finishes instead of allowances. Clients are more likely to understand what is included in the price if they have already seen what, specifically, is going into the project. We do have some erosion with change orders, but the tighter the overall planning phase, the better it is for production time and customer relations.”
He says that advance planning with an interior designer also helps prevent push-back from clients who are faced with several change orders. “The client doesn't become fatigued and think they are being nickel-and-dimed,” Gradison says.
Johnson prefers to have clients make selections by the contract stage so she does not have to rely on allowances. “Jobs where we have too many allowances are nightmare jobs,” she says. “We cannot keep our timetable because some products have a long delivery time.”
KEEPING ON TOP OF COSTS Indianapolis remodeler Joe Gradison compares estimated to actual cost every two weeks. “We also do an informal postmortem at the end of the job,” he says. But he would also like to institute a formal cost-review process.
JoLynn Johnson of Crystal Kitchen Center, in Golden Valley, Minn., uses data from post-job analysis to adjust for future jobs. Information includes building in extra time for glass-tile installations versus ceramic tile and incorporating travel/ traffic time into jobs that are outside the company's usual radius.
“We're always updating. This is especially important since I recently hired a new project manager who is now doing estimating,” she says.