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Article - August 2003
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How To Estimate Job Costs For Profit

 

Clifford McGarvey
BAS Estimator, Inc.

As a business person you too need to reduce your risk to an acceptable level, and to do that you too need to accurately estimate your job costs.


How many of your estimates consistently finish within the acceptable 2% to 5%, of estimate, range? The fact is, if you can't make accurate estimates you're wasting your time learning all of the other skills that are required to run a successful Building Automation Controls business.

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In the period of 1970 to 1980 the major control companies attempted to create a better system of estimating. A short time later they began to diversify into other businesses. I wondered if they finally saw the risks in the controls business, and when I asked one of the Vice Presidents "why the diversification?" he said profits were more predictable in a manufacturing plant. The bean counters (accountants) knew that every widget would create a predetermined profit, because they could accurately determine their manufacturing costs. As a business person you too need to reduce your risk to an acceptable level, and to do that you too need to accurately estimate your job costs.

Over the past 48 years I have worked for two major controls manufacturing companies. In each company it was part of my responsibility to help their Branch Offices or Affiliated Contractors to improve their profit. As I traveled to each office I observed a problem they all had, and that was the lack of an estimating procedure that was accurate, consistent and easy to use.

Often labor costs were moved from the unsuccessful jobs to the successful ones, so all jobs looked profitable; and when the averaged profit levels appeared consistent, it also appeared (to corporate headquarters) that we had "good estimators" with a good estimating technique.

The truth was "we were often using estimating that was based on Guess-timating". I have personally used several of the Guess-Estimating techniques shown below. Some of the methods I mention here are ridiculous, but they have been used. How many of these "estimating" methods have you used?

CatNet Systems When I opened my business I contacted the major companies who sell estimating software. I learned they do not sell estimating systems for Building Automation Systems. Their answer was "we allow you to customize our electrical estimating program to do that", apparently they did not have the answer to my needs. So how did I solve the problem - I didn't, at least not to my satisfaction. I continued to use one or more of the methods mentioned above; and I started writing my own program, by taking parts and pieces from my different experiences and gatherings of information. For six years I wrote my program, rewrote the program, altered it, added to it, massaged it, and I tested it. The experience and knowledge I had learned from my 48 years in the business finally came together into one nice neat package.

Well I've told you all of the bad and sometimes amusing things I know about estimating Building Automation Systems; now let me tell you where you might find an answer. After searching the Internet, I found there are only two companies, that I am aware of, that sell Building Automation Estimating software; one is the company called SOCC, in Canada; the other can be found at www.BASEstimator.com. Both of these companies offer "free trial programs", so you can try before you buy. 

If you would like to have a "free" trial copy of my program you can send me an E-Mail with your shipping address and phone number. E-mail your request to estimator@copperfast.com.


Cliff McGarvey

Worked 24 years for Johnson Controls Inc.; as an installer, field superintendent, service sales manager, national service manager. Started his own business in 1977, and his son continues the business today. Worked for Circon Systems, Inc. as a Regional Accounts Representative.


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