Estimating combines science and art. The science part is
straightforward enough: The prints show the square footage or
linear footage for some item, so you do a takeoff and that's
how much you budget for.
The art involves looking at a set of prints and recognizing the
intangibles that aren't spelled out.
The Golden Rule
I have an old estimating manual that contains something called
the Golden Rule of Estimating, which says, "Consider not only
the cubic foot, cubic yard, linear foot, square foot, pound, or
ton, but all of the complicating conditions encountered in
putting the material in place."
Sure, the language sounds dated, but it's great advice, and the
principle holds true for any project ever estimated.
In this article I will look at some typical estimating pitfalls
that contractors are prone to. Most of the examples come from
remodeling projects, but the same issues apply to new
construction. The point is to get you thinking about how to
approach estimating so that errors don't happen. Deriving
quantities is easy; it's the thinking behind the pricing
process that can make or break your profits.
When looking at the plans for an addition, it's tempting to
take off the square footage of the new room, multiply by the
depth of the foundation, add for overcutting or sloping the
excavation, and then call it good. But if you did not consider
the configuration of the site, you missed something.
Site access. Can the excavator's equipment get into
the backyard without damaging the driveway, destroying trees,
or ripping down the electrical service? Is there room for the
machine to maneuver once it gets there? Can dump trucks be
backed into the yard without crushing the septic system or
getting so close to the foundation that they collapse the
basement wall? The site conditions may require you to use
smaller equipment, protect parts of the yard, or shuttle
excavated soil out to the street before loading it into
All of these possible complications point to additional
expenses that will be yours to bear if you don't account for
them in the original estimate. It's also important to qualify
your bid to exclude things you can't see or could not
reasonably be expected to anticipate. You may want to put
various qualifications in the contract, such as a requirement
providing for reasonable access to the site and a disclaimer of
liability for damage to tree-root systems, buried sprinkler
lines, and the like.
Storage space. Assuming you can
get the digging machine into the yard and the excess dirt out,
is there room to stockpile material for use as backfill when
the foundation is completed? If not, you'd better include money
for importing material, which at $10 to $15 per cubic yard can
quickly add up to several thousand dollars on a big addition.
Plus you've got to pay to haul off the material you originally
planned to use for backfill.
The access issues described above apply to concrete as well. If
you can't get the trucks into the backyard, have you accounted
for the man-hours required to wheelbarrow the mud from the
street? If there's a lot of concrete and the pour is far enough
from the street, you may want to rent a pump. In this area, a
concrete pump rents for $600 to $800 per day, but that's a
bargain compared with the labor cost of moving it by hand (not
to mention that the workers who haul it will be shot for the
rest of the day).
Wasted material. If you don't use a pump, be sure to
factor in additional concrete, because some of it is going to
get spilled on the way to the foundation or splattered down the
side of the trench when the wheelbarrows get dumped.
Once the concrete is placed, the truck driver will want to wash
out the chute. If the part of the yard near the street is
landscaped, you may be hard-pressed to provide a washout area.
It's illegal to wash this stuff down the storm drain, so you'll
need to come up with some other way to dispose of it. The same
goes for concrete pumps — there's often a fair amount of
material left in the hose.
Rounding quantities. When calculating concrete
quantities, keep your numbers in cubic footage, then round up
to the next highest cubic yard by phase. If you round each
individual section of footing to cubic yards, you may end up
buying more concrete than you need. Of course, that's better
than estimating low and having to pay a "short load" charge
when you come up half a yard short.
Tie-ins to Existing
Whether it's siding, roofing, or even hardwood floors,
quantifying just the "new" areas of material will leave you far
short in material and labor. Any of these materials will need
to be stripped back cleanly into the existing to ensure that
new and old match. The labor to remove clapboards or hardwood
flooring to tooth the new and old together, and then reassemble
it all so the transition isn't noticeable, can easily cost more
than the installation labor for the entire new area. With
flooring, you may have to sand and refinish half the hardwood
floors in the house to get to a clean breaking point.
Explaining a higher price. Since carrying this extra
work will bump up your bid, you need to tell the customer what
you are including and why: "Mr. and Mrs. Jones, the other
contractors you're talking to may plan to paint only the new
siding. My bid includes repainting the entire side of your
house, because otherwise the siding's not going to match. There
are some other items like this in my bid as well. So, if my
price is higher, it may be because I plan to do more than the
bare minimum in order to provide you with a proper job."
Breaking down the process. Tie-ins usually eat up time
and material. If you're opening up an existing structure,
you'll have to consider the need for shoring and temporary
walls. This may require painstakingly selective demo and a lot
of shimming to get everything to blend. To plan for this, break
the process down into individual steps, assigning labor and
materials to each, and then total the whole thing. The number
will probably seem high, but odds are you'll need every penny
Carpet and Tile
One issue regarding flooring has to do with what size pieces
the material comes in. If you need to carpet a
12-foot-by-12-foot room, you can price 16 square yards of
carpet and install a single 12-foot-by-12-foot piece. If,
however, the room measures 13 feet by 13 feet (mathematically
18.8 square yards), there will probably have to be a seam,
because most carpet comes in 12-foot widths.
Assuming you can turn the carpet 90 degrees for seaming, you
could buy a 15-foot length and use the offcuts to piece on an
extra foot of width. But since some carpet has a direction to
it, you might have to order a second 12-foot-by-13-foot piece
to get the missing 1-foot-by-13-foot strip. The total could be
as much as 35 square yards, which even at $20 per square yard
adds $340 to your material costs.
Of course, you can always buy 15-foot-wide carpet (available
only in certain lines, and at a higher cost), or hope that the
flooring installer will cut you a break and use the leftover
carpet for a remnant.
The same principle applies to tile flooring. If the room is 10
feet square and the tile is 12 inches square, you'd simply
order 100 square feet of tile, plus a few extra pieces in case
some break. If, however, the room is 10'-2" x 10'-2", you've
got to order a minimum of 10 square feet of additional tile
(assuming you can get two cuts from each tile). This is not a
big deal with $3-per-square-foot ceramic tile, but it is if you
are buying $22-per-square-foot travertine.
Protecting Existing Surfaces
One item I rarely see on contractors' estimates is a cost for
protecting existing surfaces. The added expense of covering
floors with Masonite and plastic sheeting may seem high —
but not if you compare it with the price of having to refinish
the hardwood. As many of you know, getting drywall dust out of
the cracks between hardwood floorboards isn't fun, and it's a
job that can easily be avoided.
I have a category in my estimates called General Requirements,
which covers such items as scaffolding, rental equipment, trash
cans, brooms, and all the other stuff every job seems to
require. There are a number of items in that section for
protection — plastic, Masonite, tarps, walk-off pads,
self-adhesive carpet protection, and so on. To compile the
estimate for these items, I plan access routes through the
house and across the site, and identify any items that require
special protection.Bob Kovacshas been managing and estimating
residential and commercial construction projects for 15 years.
He moderates the estimating forum at
If your business is like most construction and remodeling
companies, it started out small and is growing in response to
demand. The first place you will add employees is probably in
the field, since your field people actually make you money,
whereas office staff is all overhead. But at a certain point,
you will realize you need to consider adding office
In the meantime, you yourself most likely serve as office
manager, project manager, estimator, carpenter,
customer-service rep, bookkeeper, and salesman. As a business
grows, it retains those same tasks (though on a larger scale)
and adds new ones, such as overseeing a more complex benefits
program or launching a marketing effort.
Nobody can do all of this — but it takes some people
longer than others to recognize or admit that. You must decide
which functions you will continue to perform and which you will
delegate to a new hire.
I have observed that there's a strong tendency to believe that
the best hire you could make would be a clone of yourself.
After all, somebody possessing all your skills could pinch-hit
where necessary, would require little training, and would
double your own effectiveness. Right?
Your clone will possess all your strengths and all your
weaknesses. If you are great at sales but stink at paperwork,
why on earth would you hire somebody else who is great at sales
and stinks at paperwork? Salespeople (forgive the generality)
are usually outgoing, gregarious, creative, daring, and
assertive. Good bookkeepers, on the other hand, usually
You may find while interviewing that you are drawn to people
like yourself. This is natural. However, keep in mind that you
want to choose people who will be effective employees in the
role for which they were hired, not necessarily somebody you
want to kick back with on the weekend.
So think hard about what tasks your new hire will be asked to
perform, and take into account the applicants' personality
traits, stated task preferences, and demonstrated skills. Don't
assume that you have to hang on to running payroll because it's
so loathsome you couldn't possibly delegate it to anybody else.
Out there is somebody who would jump at the chance to do
payroll, or filing, or any of those other things you're not
suited for — or that you're overqualified for.
In short, it's a matter of focusing on the needs of the
business, and hiring somebody who will complement —
rather than duplicate — your own skills.
Document the Procedures
One word of warning: Before you assign to another person a task
you've been doing, you must go through the process of
identifying and then documenting what, exactly, it is that you
do. Otherwise, the recipient is doomed to disappoint you.
Documented procedures allow you to fast-track the training of a
new person and can become part of a comprehensive procedural
manual that covers all aspects of the company. This adds value
to your business, which will no longer be dependent on you for
things to happen.Melanie Hodgdonis a business systems consultant for
builders. She lives in Bristol, Maine.