Estimating, The Stumbling Block to Success!

Estimating is probably the most feared facet of the construction industry, none more so than for electrical contractors.  Despite all of the advances in technology in software for estimating and design, let’s face it, an estimate is still a guess.  What could be more challenging than trying to assimilate the material and labor costs for hundreds or even thousands of items, just for the honor of submitting a bid.  Forget all of the intangibles, such as the effect of weather, labor skills, and productivity, how about the risks each construction projects presents, let alone getting paid in a timely matter…

Furthermore, where do you even learn the basic skills of estimating, often referred to as “takeoff?”  Courses at trades schools and trade associations are relatively hard to find; most people pick up these skills on their own or from someone with experience who takes them by the hand through the process.  Many of the people who are looking for training in this area are people starting a new company or someone looking for advancement or a change in duties rather than working in the field with the tools.

In working with thousands of estimators over the last twenty-five plus years, from first-time beginners to well seasoned veterans, my work has mostly been in helping them to computerize this process.  I’ve trained people with almost no field experience and those who are expert mechanics with many years of field experience.  A common misconception is that an estimator must have field experience.  I don’t agree with this.  I do believe that an estimator must understand and be able to visualize the requirements of the job.  Possessing the skills to be able to actually use the tools to do the installation is not required.  Extensive field experience is not the most important criteria in becoming an estimator!

A noticeable trend in the construction industry is to hire estimators and project managers with little or no construction background.  This is more evident with General Contractors than Subcontractors, but as is often the case, the technical and field knowledge can be gained in a reasonable amount of time if the person has the appropriate mix and quality of skills.  For example, an excellent foreman or electrician may be a lousy estimator because they pay too much attention to detail or cannot think in terms of how long a task should take rather than how long it will take.  I’ve seen this trend to hire people with limited field experience with larger electrical contractors as well who hire people with excellent administrative, organization, and analytical skills as project managers and estimators rather than relying on their past performance in the field.

Another overlooked skill is the judgment to apply the proper amount of attention to detail.  Again, excellent field employees are often so detail oriented that they can’t be productive as estimators.  They tend to spend too much time trying to design the job in their head or obsessing about the best way to install something.  Conversely, missing an important detail or cost can ruin a bid.  A large error or missed item can win a bid which will never have a chance of making a profit; a large mistake which overprices the job, costs the company the opportunity to make a profit had they won the bid.  It’s not a no-win situation, but it is certainly a fine balancing act.

Computers have reduced the number and type of errors which are built in to this process.  But good judgment and business sense are still as important as ever.  Teaching the fundamentals of good estimating is enhanced with the use of software, but it still comes down to some basic concepts of understanding how to crunch the numbers, and more importantly, how to analyze and interpret the numbers.  As a teacher and trainer, I’m always trying to help people acquire the mechanical skills in estimating and running software, but I never overlook the subjective skills and abilities which are required to intelligently utilize the numbers.

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Brian Hoffelder is Vision InfoSoft’s professional software trainer. He is one of the founders of Vision InfoSoft, provider of estimating, billing and pricing software for electrical and plumbing contractors throughout the country.  Brian combines over two decades of experience in software development, software training and first and estimating to provide a real-world perspective on the most critical skills required for efficient and profitable bidding.

For more info on Brian, call 800-258-7752 x548
or email bhoffelder@visioninfosoft.com