With the Australian trades industry becoming increasingly competitive, tradies need to have a strategy in place for estimating and bidding for projects that would build client confidence and trust. To help you win more business, we’ve put together this comprehensive guide to project estimation and bidding. Our expert advice will give you an edge over your competitors and ensure that you come out on top every time.
Why are accurate project estimates important?
Accurate project estimates are essential for several reasons. Firstly, they provide a realistic assessment of the resources, time, and costs required to complete a project. This enables your tradies to plan and allocate resources efficiently, ensuring that the necessary materials, equipment, and labour are available when needed.
Providing accurate estimates also helps you manage client expectations effectively, reducing the chances of costly misunderstandings or disputes. Clients appreciate accurate estimates, as these allow them to make informed decisions about their projects, such as how to budget their expenses accordingly.
Lastly, accurate project estimates demonstrate professionalism, expertise, and reliability. They showcase your tradies’ commitment to delivering quality work on time and within budget. This gives clients confidence in your ability to meet their needs, making them more likely to hire your business over the competition. Having a reputation for providing accurate estimates can also lead to positive referrals and increased business opportunities.
Most common project estimation techniques
There are several techniques that your trades businesses can use to estimate projects accurately. Here are five of the most common ones.
Top-down
This technique relies on broad assumptions and general industry information to provide a quick estimate. This is useful when you need a ballpark figure quickly but don’t have the time or resources to provide a detailed estimate. Note, however, that top-down estimates can be prone to inaccuracy.
Bottom-up
In this approach, the project is broken down into smaller parts and the cost of each element is calculated separately. The bottom-up approach is a slower process than the top-down approach, but it provides more accurate estimates and allows for greater control over costs.
Three-point estimates
Also known as Program Evaluation Review Technique, or PERT, this method uses three different estimates — low, most likely, and high — to provide a picture of project resources and costs. These estimates are then averaged to give a more reliable final figure. This technique can be helpful when there are numerous unknown variables and different opinions on expected costs.
Comparative or analogous estimation
This approach uses past projects as a reference point to estimate the costs of the current project. The costs from similar projects are adjusted to account for any differences in scope, scale, or complexity. This can be an effective way to make predictions, but it may not account for any external factors, such as inflation or changes in the market, that could affect the project.
Expert judgement
This technique is based on the knowledge and experience of qualified tradies. It relies on their expertise to anticipate potential issues, identify possible risks, and make informed decisions about cost estimates. The expert judgement method is useful for complex projects that require a great deal of specialised knowledge.
Best practices for effective project estimation
Effective project estimation requires a combination of expertise, experience, and careful planning. Whatever project estimation technique you use, follow these best practices to ensure that you provide accurate estimates.
Know your team’s expertise and job responsibilities
Evaluate your tradies’ skills and experience to ensure that they are capable of handling the project’s requirements. Understanding their job scope and responsibilities can also help you determine the resources they need to complete the project successfully.
Study project estimation techniques and trends
Keeping track of project estimation techniques and industry trends can help you create more accurate estimates. Keeping an eye on the market need and demand for your services can also help you adjust your estimates appropriately.
Leverage past project data to enhance estimate accuracy
Utilising past project data can help you plan more effectively and anticipate any potential obstacles. Keep a record of your estimates and the actual costs of projects to help you adjust your approach over time.
Delve into the project details
Make sure that you have a clear understanding of your client’s project requirements. Ask for detailed information about the project’s scope, scale, complexity, resources, and timeline. Verify any assumptions made and check your estimates against any available data.
Use comprehensive job management software
Investing in a reliable job management software solution like WorkBuddy can help you create accurate estimates quickly and efficiently. You can use WorkBuddy to automatically generate price estimates and job quotes based on factors such as project scope and duration, material requirements, and labour costs. The software can also help you better understand job complexity, cost, and service markups by providing historical data on past projects and pre-established price books.
Ultimately, accurate project estimation and competitive bidding are essential if you want your tradies to succeed in the industry. Using the right techniques and best practices can help you stay one step ahead of your competitors and provide reliable estimates every time.
Investing in a comprehensive job management solution like WorkBuddy can also help you streamline your estimation process as well as other aspects of your trades business, allowing you to focus on delivering quality work and exceptional customer service.
Don’t wait to take your project estimation to the next level. With WorkBuddy, you can streamline your estimation process, generate accurate project quotes, and deliver quality service to your clients. Schedule a free personalised demo today and discover how WorkBuddy can revolutionize your trades business.
