Cost estimating can be a daunting task for construction business owners. But as a vital factor for success in this competitive market, it needs to be done. And done correctly.
Incorrect estimates could make you lose a bid or minimize your profit. On the flip side, correct estimates are one of the best things to happen to your construction business.
Arron at Drexel estimating service in Nassau County, New York was quoted saying this about construction estimating services, “The biggest advantage our clients see is the amount of money a service ends up saving them”. https://www.drexelestimatingllc.com
Your construction estimates have to be thorough. It’s rare for the estimators’ first estimate to match the project’s ultimate price tag.
Comprehensive estimations, on the other hand, enable engineers to make critical decisions. Developers can use the estimate to determine the feasibility and profitability of a project. The report of the estimator will also play a role in obtaining finance.
Developers might make crucial decisions later in the project’s development about modifications in project design and/or materials that affect cost positively or negatively.
But Is Outsourcing Your Cost Estimating Actually a Good Idea?
Yes. It will interest you to know that hiring an estimating service is more cost-effective and efficient than having an in-house estimator.
Now let’s prove this: The average salary of an in-house estimator in New York is about $88, 216 a year. This translates to an average of $7, 351 per month and $1,837.8 per week. Although, this varies according to region.
A typical salary of an estimator in Manhattan is $74,178 per year. A commercial estimator in Brooklyn earns about $50,000, while a commercial estimator in Queens earns about $60,000 – $70,000 per year.
Now, let’s look at some stats.
Below is the category of how many projects subcontractors in the U.S. are bidding on per month on average:
Small-sized firm – 2 to 10 projects
Medium-sized firm – 10 to 30 projects
Large-sized firm – 60 projects
Extra-large-sized firms – more than 60 projects
For a medium-sized company that is bidding on 10 projects per month on average, paying an in-house estimator $7350 per month means you are paying $735 per project.
On the other hand, hiring an estimating service company that only charges per project means you don’t have to pay anything if you don’t have any project to estimate. This implies that the estimating professional charges you based on the scope and complexity of the job only.
So, instead of paying an in-house estimator regardless of how big or small a project is, hiring an estimation professional who will charge you relative to a particular project is better. Thereby justifying your money spent and giving you maximum value.
That’s why outsourcing your estimation task is a good idea.
Benefits of Hiring a Construction Estimating Professional
1. Increase the number of projects you secure
One of the main important benefits of outsourcing construction estimating is that you do not need to sit at your computer struggling over the estimating process. It leaves out the headache of scratching your head as you try not to overestimate or under-charge.
This saves you the time and energy to go after and win other bids as you leave it to the experienced ones to do the job.
2. Get rid of unnecessary overheads
For smaller construction companies in New York, you will need to stick to a tighter budget thereby making construction estimate service very cost-effective. Besides, having your own in-house estimating department may not even be an option.
This will also mean when jobs are not forthcoming, you’re not wasting money on a department that is idle and not productive. So ask yourself, do you want to have a department gulping money but not producing its equivalent value on your payroll?
3. Make a bigger profit
Using a construction estimate service not only allows you to cut unnecessary spending, but it also makes sure you can maximize profit by allowing seasoned professionals to give you a more accurate estimate of cost materials which reduces the risk of you running over budget and possibly costing your firm money.
4. More time for yourself and your business
By using a construction estimate service company, you do not have to worry about price fluctuations and material quality. These seasoned professionals will keep you updated on industry changes, thereby giving you time to focus your efforts on things like growing your business and putting a plan to drive the company forward.
Why Picking the Right Estimating Service Saves Money
You see, when you hire the services of an estimating professional, the risk of potential losses and excessive overhead cost is reduced to the barest minimum.
You don’t have to pay to stay on top of the cost of industry materials because that is what they do for you. Additionally, you save money by paying only for projects you’re working on. You don’t have to pay for someone’s taxes, benefits, and in some companies, 401k. You only pay when there is an actual job to do.
Also, when there’s an overflow of estimates to perform, you don’t have to pay a lot of overtime to an in-house estimator. You simply pay the estimating firm to continue handling your estimate or hire an extra one.
How Does Construction Estimating Increase My Profit?
Construction estimating services don’t just save you money by reducing overhead costs, they also save you money by delivering estimates that ensure projects are completed on or under budget. This way, you will increase your profit margins and this will enable you to invest in other parts of your business that are necessary for growth.
Best Questions to Ask a Construction Takeoff/ Estimating Company
How do you ensure project estimates are accurate?
This will give you a glimpse of how they intend to carry out your estimation project.
How would you ensure estimation reports are easily readable and understood clearly?
This will demonstrate the writing and communication skills of the firm’s team.
What would you do if I asked you for a complete analysis of all project costs?
This demonstrates how the firm deals with stressful situations and customer service quality.
Who was the most complex estimate you created for a client?
Reviews the firm’s previous work experience and portfolio.
When can I get the feedback?
Enables you to have an idea of when your report will be ready depending on your project scope and complexity.
