Blueprint for Success: Chapter 3 Estimating Systems

When Jennifer Bates, production coordinator for Kleinco, Tulsa, Okla., receives the go-ahead from the companyÆs estimating department for a project, she can proceed with confidence. For almost half of its 40-year history, Kleinco has used an estimating system that covers just about every conceivable situation. As a result, Bates and KleincoÆs clients are assured that the estimate for the project will be very accurate - averaging within 1 percent of the actual final price.

Actually, the estimating process starts well before KleincoÆs estimators, Kenny Proctor and Robert Williams, receive the salespersonÆs notes. They receive a heads-up in advance, giving them the opportunity to plan for the detailed work, which in turn allows the sales rep to tighten his turnaround time with the client, Bates says.

"We have a schedule, so the salesman knows heÆll be able to set up an appointment to go over the estimate with the client on a certain date," she says. "ItÆs important to not let the client get too far away. WeÆve learned that the longer the time between the initial lead and signing the contract, the more likely we are to lose the client."

When the Kleinco salesman and estimator sit down together, they go through the entire scope of the project, combining any preliminary scope with the most recent version, as well as any available drawings. At this point, the proposed project is starting to take shape, and the estimator has enough information to take the next step.

In the details

However, the next step for the estimator is not sitting down to crunch numbers. Before that happens, he visits the job site with the salesperson to check for anything that might complicate the estimate. Then he sets up a meeting with the trade contractors and a project leader to make another trip to the site for the same reason.

"ItÆs hard for the subs to just look at the prints and know everything that may be going on," Proctor says. "They can do that with new construction, but not with a remodel. For example, a mason will have to match the brick; the electrician needs to know what may have to be relocated or upgraded. The more eyes you have looking at a job, the more likely you are to catch something in time to include it in the estimate."

Making so many visits to the site even before a quote is presented may seem unnecessary, and it certainly is unusual. However, Proctor and Bates believe that the time is well spent, given the potential on any given project for unexpected problems once work is underway.

"I think our customers appreciate our thoroughness," Bates says. "They know the quote is complete."

Crunching the numbers

Armed with detailed knowledge of the entire scope of the project, the estimator is ready to start entering numbers. Kleinco uses a customized Microsoft Excel spreadsheet (View the spreadsheet) for putting the estimates together. Bates and Proctor have looked at several estimating software packages over the years, but so far none has fulfilled all their requirements.

The spreadsheet includes detailed breakdowns for every aspect of the project, from materials to services such as trash-container rental. With all the numbers have been entered, itÆs easy to calculate the total price. Once thatÆs done, the entire scope of the project is in black and white. The newly created scope document is the basis for the rest of the project, even taking precedence over the drawing.

The importance of scope

"Using the scope document allows us to make changes more easily than if we had to go back to the drawing," Bates says. "Unlike a lot of remodeling companies, we work with the client on the budget. If we have to reduce the expense of the project, we work on the scope. For example, itÆs easy to change the number of can lights over a vanity from six to five. [Some] remodelers do things on a handshake, then charge extra for time and materials, or when they run out of money, they just leave. We have to save a lot of those projects."

Another advantage of using a complete written description of the project is the simplicity it offers for reviewing the estimate before the contract is signed. The typical client is more likely to be able to understand a written document than a drawing.

"The scope document also gives you someplace to stand with the client," Bates says. "If something is omitted, everyone, including the client, had an opportunity to catch it. By the time theyÆve signed the contract, they may have reviewed it five or six times. If the client mentioned something to the salesman but it never was written down, we can go to the write-up for clarity. WeÆve very seldom had trouble with clients who werenÆt willing to go along with that."

KleincoÆs team approach is another safeguard of accuracy. With the active participation of the architect and the client, the Kleinco team is able to keep close tabs on the entire project as it goes forward. Estimating relinquishes its role at a pre-construction meeting of the estimator, the project leader and project coordinator Bates. Once Bates and the project leader are familiar with the work to be done, they take over.

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Kleinco’s estimating process prevents unpleasant surprises for the remodeler and the client