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Copy My 3-Tier Estimating System to Save Hours & Win Better Jobs · Contractor Business Builder Podcast

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  We've implemented this exact process with dozens of general
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  contractors. And the result?
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  Faster estimates, better clients, and actually more time
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  to help grow the business. I've been walking you through it
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  step by step. Great thing about this process
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  is it's it's very simple to conceptualize.
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  There is 3 different levels of estimating that you're gonna
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  provide to a client and each one helps bring the client to the
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  next stage or weeds out the clients that either budget is
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  out of whack or you don't want to be working with.
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  So first of all, bring me talking about is the ballpark
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  budget. This one is a quick budget
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  you're going to do typically at the clients house or you know,
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  insert inside the first sort of initial meeting and it's to take
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  maybe 5, 10 minutes. You're gonna use some sort of
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  spreadsheet or maybe like a quick go to template that you
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  have in your project management software.
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  And what you're doing here is just using a very broad brush as
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  far as figuring out, you know, how many square feet is this
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  home for a new home build. So you know, square foot times
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  price, this is going to cost you $600,000 or if it's a remodel,
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  you know, the size of kitchen, you're just very ballpark.
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  The idea is you're going to provide the client some sort of
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  a range of costing. So Mr. and Mrs. Smith, you know,
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  this new home build that you're talking about based off the
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  square footage. And then so your location where
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  you know, probably in the ballpark range of 600,000 to
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  $750,000 to, to build this home is that sort of in the, in the,
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  you know, budget that you envisioned, right.
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  So this is a real easy step to give them some sort of number
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  you're looking to be within maybe 15% or so of, of what you
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  know, the final cost could be for them.
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  And it really is quick. You give them a price that's
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  free and you can see if this is something that is worth pursuing
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  further or if you know, we need to go back to the drawing board
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  because they're expected budget is nowhere near the actual cost
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  that you know it's going to take to build their project.
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  Alright, so that's the first level of estimate.
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  The second level of estimate that you're going to provide to
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  a client is a rough budget. So this is going to be something
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  that's detailed. You're going to work from a
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  template you're using sort of base pricing.
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  The idea with this rough budget is let's say you go to an auto
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  dealer, you're going to buy a brand new car.
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  You know, you're excited, you saw the advertisement, MSRP
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  $30,000 for this new car. Of course, when you go to the
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  dealership to buy the car, you're going to want, you know,
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  the hill 17 inch rims where the sunroof for extended warranty
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  here, you know, there's all these kind of different things.
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  So they're gonna advertise the price 30,000.
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  But of course you know, you're more than likely going to want a
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  few upgrades or a few additional things that's going to bump up
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  the price to maybe 35 or 40,000, you know, depending on what you
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  know, extra stuff you get. So this is the idea of the rough
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  budget you're providing that kind of that baseline base
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  build, standard items, allowances, things like that.
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  The idea is you want kind of like the very sort of lowest
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  cost that you can provide this this budget or this project to
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  the client for because you don't want to scare them off, but you
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  do want to give them a lot of detail.
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  So that's why you're going to provide an actual, you know,
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  written estimate budget, all the different line items in there.
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  And the goal of this one is hopefully you're within
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  somewhere like 10%, you know, obviously the more close to the
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  better. But if you're within 10% of the
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  final budgeting, which I'm gonna get to step number 3IN in a
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  minute here, where you get more refined that you're in, you're
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  in a good place. And this gives the client enough
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  to see that you've put in the detail, you put in the work.
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  You know, you've done takeoffs. So you're using specific square
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  footages for all the different parts of the project, but you're
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  not going out and getting supplier clothes.
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  You're not doing going through selections of specific things
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  that that the client wants and the project.
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  I don't not doing bid requests for subcontractor pricing and
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  stuff like that. That's something that we're
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  going to get to in the next step.
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  And from here the goal is that you provide this to the client.
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  Typically you're going to do it for free.
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  It should take maybe one to two hours if you're really good and
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  got a template and it's like a standard project, maybe even do
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  it in less, but it's very it's fairly quick.
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  Typically this is free and the purpose is to move the client
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  then into pre construction service agreement.
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  And the PC USA is sort of that next step and ensures that
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  you're actually going to get paid for the drill down
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  budgeting, which is coming up to #3 here.
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  So the drill down budgeting and ideally if your process in
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  place, you've got a preconstruction agreement.
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  So you're getting paid for the time that you're putting in.
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  So you don't mind going into the level of detail and working
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  through the with the client or their designer or your designer
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  with the selections and different things.
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  And this is probably going to take anywhere from 5 to 10 plus
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  hours depending on the complexity of the project and
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  how much your communication you have back and forth with the
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  client and things like that. But you're gonna go through
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  selections, you're gonna tender our bids to your subcontractors,
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  get their pricing and supplier quotes for specific materials
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  that are going into the project. And you're helping sort of value
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  design. And if the scope changes, you
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  know the client. The good thing about this like 3
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  tiered level estimating is that the client is always going to
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  know sort of right away, you know, what the base price is and
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  then they can see how their selections or their input
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  affects the price. So you're not kind of getting
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  all the way to the end with this huge sticker shock.
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  There's been an iterative process.
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  The clients knows like first, you know, ballpark range.
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  Yeah, seems OK. You move on to the next step.
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  Rough budget. Yeah, that looks like feasible.
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  Good. And you move on to the next
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  thing to drill down. So by the time you get to the
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  construction contract that you've already worked with the
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  client for potentially months if you're going through the whole
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  construction process and it should be a very easy transition
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  then for them to sign for the construction contract.
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  So if you want more help with this and you want to learn how
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  to get a preconstruction process in place, go check out this next
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  video. We guide you through how to
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  build a pre construction service agreement and process to help
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  you know, give you a high converting process that you can
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  sell the client into the construction process plus get
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  paid for the estimating, the budgeting, the scheduling, all
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  that stuff for the preconstruction.
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  So go check out this next video. I'll see you there.