Volume 2: Everything you need to know to keep your construction business profitable, including estimating methods, controlling costs, concrete, masonry, rough carpentry, roof covering, insulation, doors and windows, exterior finishes, specialty finishes, scheduling, managing workers, marketing, spec building and land development.
Volume 2: Everything you need to know to keep your construction business profitable; different methods of estimating, keeping and controlling costs, estimating excavation, concrete, masonry, rough carpentry, roof covering, insulation, doors and windows, exterior finishes, specialty finishes, scheduling work flow, managing workers, advertising and sales, spec building and land development, and selecting the best legal structure for your business.
|Author||Jack P. Jones|
|Publisher||Craftsman Book Company|
|Dimensions||8-1/2 x 11|
Introduction to Estimating
The best builder in town won't make a dime if his estimates are bad. This chapter will suggest an estimating system that can help you compile estimates that are consistently reliable - and keep your business growing and profitable.
Your skill as an estimator is the key to business success. No construction company is better than its estimates. And in most small construction companies the owner is the chief estimator. No one else can be trusted to make important decisions about selling prices. That's why every successful builder needs good estimating skills: knowledge of construction, an organized approach to compiling costs, the care required to produce valid estimates, and an instinct for situations that can make a job more or less expensive than other similar jobs.
There are four ways to estimate any job:
The Guess Estimate, which is just that, a guess, based on rules of thumb and vague recollections of past experience. Bidding by "guesstimate" is a fine idea if you intend to get into some other line of work in couple of months.
The Area Estimate is based on a cost factor for area alone, applied to the proposed area without consideration for any variables. This method of estimating can provide you with some big surprises, including fabulous profits on some jobs and disastrous losses on others.
The Piece Estimate is by far the most accurate method of determining job cost. You list each and every piece of material as well as the labor necessary to do each step of the job. If you start out with proper plans and a detailed job survey, then take each step systematically and comprehensively, you're pretty certain to come out with an accurate estimate. You also have a material list to use in ordering and coordinating the required materials. This estimating system takes time and will be accurate if you remember to include every cost item in the job.
The Unit Cost Estimate combines the principles of the area estimate and the piece estimate. You use the unit cost for each material, installed, for a given area. If your unit costs are correct, you can prepare an estimate that’s nearly as accurate as the piece estimate, but in a lot less time. It’s absolutely essential, however, to keep up-to-date unit costs based on current material and labor costs.
If you don't have a unit cost guide based on your own records and experience, I recommend the National Construction Estimator and the Building Cost Manual, published by Craftsman Book Company. There's an order form at the back of this book. These books are revised every year and are, for the price, probably the best sources available on the subject.
|Labor Placing Concrete Block|
|Work Element||Unit||Man-Hours Per Unit|
|Concrete Block, lightweight|
|4" block||100 S.F.||10.50|
|6" block||100 S.F.||11.70|
|8" block||100 S.F.||12.80|
|10" block||100 S.F.||15.00|
|12" block||100 S.F.||17.90|
|Concrete Block, hollow, standard weight|
|4" block||100 S.F.||11.00|
|6" block||100 S.F.||12.00|
|8" block||100 S.F.||13.00|
|10" block||100 S.F.||15.00|
|12" block||100 S.F.||18.00|
includes set-up, clean-up, joint striking one side only, cutting,
pointing, steel alignment and grout.
Suggested Crew: Small jobs, 1 mason, 1 helper
Establish Your Own Construction Estimate File (CEF)
No matter which estimating method you use, there's no substitute for your own manhour and productivity figures based on your own crew and work methods. You can't have accurate estimates without accurate guidelines for labor. Throughout this volume you'll find examples of labor data and guidelines for filing in your Construction Estimate File. I call these CEF forms.
To make a basic CEF, you'll need good estimating references. One that I can recommend is Construction Estimating Reference Data published by Craftsman Book Company. The address is on the order form in the back of this book. Photocopy the charts that are pertinent to your work and tape them to standard 5" x 8" index cards. Set up a file box for the cards, and you've got a Construction Estimate File with labor guidelines at your fingertips.
Start with the information you'll find in this volume and in your other references, but don't stop there. Change the data if it's not accurate for your conditions. Add cards with information that reflects your experience. Continually update the cards to keep up with the changes in your operation. Your file has to change with the times, just like your business. Of course, it'll take time to keep the file accurate and up-to-date, but it will save you lots more time when you use it to compile fast, ac- curate estimates. And believe me, it'll save money, too.
Your CEF will not, except in a few instances, show price or cost. Material prices and labor pay rates are constantly changing and vary from location to location. You must use current local prices and pay rates or your estimate won't be valid. Since material prices change on a daily basis, my practice is to obtain current prices after completing the take-off. Pay rates for your tradesmen and laborers are easier to keep up with since they're not subject to daily change.
How many manhours will it take to lay the foundation block? Refer to your CEF for a quick answer. Figure 1-1 shows what your CEF may look like.
How many manhours will it take to frame the floor? Refer to your CEF. (Look at ours, Figure 1-How many bricks will you need to veneer this house? Your CEF will tell you. (See Figure 1-3.)
How many manhours will it take to lay the brick on this job? Go to your CEF. (See Figure 1-4.)
The CEF will help you lower future costs and make it easier to compare jobs being estimated. If your CEF, for example, shows that it takes 7.5 manhours to brush one coat of paint on 1,000 SF of exterior wood siding, and it actually took 10 hours, you can check on the conditions the workmen faced. You might also want to check on the workmen. Why did it take so long? You've learned something for future use.
In figuring unit costs, bear in mind the season of the year when the work is to be done. A carpenter, for instance, will be more productive on a warm, sunny day than when the cold is stiffening his hands and interfering with his movements. Keep a close record on the average output of tradesmen for all seasons of the year and include these results in preparing estimates. Record rainy seasons too.
Using the Manhour Guides
Experienced construction estimators recognize that no two jobs are exactly alike. Labor productivity varies widely from job to job, even if the crew re- mains the same. Job progress in hot summer months will be different from the progress made in cold winter months. Thus, judgment is an essential element in estimating any construction project. And judgment will be required when using the labor guidelines in this book.
The manhour guides in this volume are not based on "ideal" conditions. They assume the kind of conditions most contractors encounter on better planned and managed jobs. The labor productivity indicated in the guides will be accurate to the extent that these conditions apply to the job you're figuring.
The guidelines apply only to new construction. Repair, replacement and remodeling usually involve different problems, like difficult access, trying to match materials, working with nonstandard sizes, patching, and control of the construction environment. Your CEF will, however, be a useful guide for repair or remodeling work that's similar to new construction.
The guidelines and estimating data presented in this manual are the result of actual observations compiled, interpreted, and verified by professional estimators. But there's no guarantee that the figures used here will apply to the job you're estimating. As a rule, though, the manhour estimates presented in the CEF samples will be ac- curate within about 20% on most jobs where conditions are similar to the conditions outlined. On most of the remaining jobs the figures will be too high by 20% or more, resulting in more manhours than are actually required. This is intentional, as an estimate slightly too high is better than one too low.
Handbook of Construction Contracting
by Jack P. Jones
Estimating, Bidding, Scheduling
Guesstimates have ended the careers of many promising construction contractors. This manual will help you avoid the common estimating mistakes that have sunk so many construction companies.
There’s an art to making a profit while your competitors go broke. But many builders do it year after year, in any construction market and in spite of shortages, high interest rates and government controls. The key to defending yourself (and your pocketbook) is making consistently reliable estimates – based on valid unit costs – and then using and scheduling labor and material the way the job was estimated.
This book shows you how to wet up and use a Construction Estimate File that will become your most useful estimating reference for all types of jobs you handle. With the right information at your fingertips and following the steps the author outlines, you should have no trouble producing complete reliable estimates that include a decent profit.
This book shows how to compile accurate unit costs for all residential and light commercial construction:
You’ll also learn better ways to use labor and material resources so your company can grow and prosper:
There are two parts to every success story in the competitive building business: knowing how to bid it and knowing how to build it.
Volume 1 shows you how to build it. This manual, Volume 2, shows you how to bid it. Both manuals include step-by-step instructions, illustrations, charts, drawings, pictures and sample Construction Estimating File entries to guide you toward a profitable and promising future as a quality builder.
Jack P. Jones has 25 years’ experience in building and remodeling homes. He’s a skilled carpenter, mason, plumber and electrician. But he knows that none of these skills will keep you in business long if you can’t make accurate estimates and bids that guarantee a fair profit. In this volume, he provides you with the estimating know-how and bidding tips that brought him success. They can do the same for you.