5 common estimating mistakes and how to avoid them
As a coatings manufacturer representative, I have always taken great pride in working with painting contractors in the effort of building their business, which subsequently contributed to their financial success.
When it comes to estimating, no one possesses the ability to look into the ‘crystal ball’ and foresee exactly what the future incurred costs to the contractor will be on any project. However, by being aware of and understanding some of the most common estimating mistakes, contractors can overcome these challenges to profitability.
Here are five mistakes that can stand in the way of better profits.
1) NOT BUDGETING FOR TRAVEL COSTS
A common estimating mistake frequently seen is not budgeting for travel costs such as gas, tolls and parking. Naturally, these costs amplify more for jobs in urban areas, so they should always be estimated for, as they can have a significant negative impact on the financial result of a project, especially a long-term one.
2) NOT BUDGETING FOR PRODUCT COVERAGE
Another common mistake is underestimating a product coverage rate with regards to square footage realized. Typically, this happens when the substrate is more porous than previously thought, resulting in lower square footage realized per gallon.
Generally, one gallon of product is recommended for every 400 square feet, but covering textured, rough or unprimed surfaces may require more coating material. Using a high-quality product that covers in one coat will actually save money in the end, especially when using darker colors.
3) NOT BUDGETING FOR A TESTING STAGE
Another occasion where estimating mistakes are commonly seen is when a contractor’s bid does not match the actual job requirements. In some cases, a contractor will bid a ‘spot’ prime, only to later realize that the substrate actually needs a full prime. Ideally, these challenges would be discovered and planned for during a testing/mock-up stage for the project. Adding this testing stage can ensure a better finished result and higher profit, but only if it is planned—and budgeted—for from the beginning.
4) NOT BUDGETING ADEQUATELY FOR LABOR
Properly and consistently estimating production rates of workers is an ongoing challenge. During strong economic times, when unemployment rates are very low, high turnover—along with lack of experienced trade personnel—can only exacerbate this dilemma. So it is best to estimate on the conservative side until a strong track record of data can be built up and utilized.
5) NOT BUDGETING FOR PREP WORK
Lastly, underestimating the amount of prep work that needs to go into a project is also very common. Whether it is a commercial project, which is ruled by a specification, or a residential repaint project, which tends to rely on meeting the expectations of your customer, the amount and type of preparation that needs to be done can still be the great unknown.
This is an area where there cannot be too much communication between you and your customer because, ultimately, they make the determination between a good-enough job and a great job. Focus not only on getting the job done right, but also making it a good experience for your customer by utilizing good communication and problem-solving tactics to complete a job that you will be proud of and they will enjoy for years to come.
While you may not have a crystal ball to see into the future, you can save yourself headaches and be more profitable with enhanced communication and attention to detail.
Mike Mundwiller is the field integration manager for Benjamin Moore, responsible for supporting associates on the Brand and Product Strategy team as it relates to field sales, and also acts as the main liaison between brand, field sales and the lab. He has been with the company for 30 years in many roles: sales, product development, technical support, customer care, dealer development.