8 Common Mistakes To Avoid While Making Construction Estimates

In a rush to impress the clients, small business owners often forget to rectify unintentional mistakes after generating estimates. And if they hand over the estimate without checking those errors, then it will look unprofessional. Consequently, they are more likely to lose their potential clients.

Estimating and invoicing process could be complicated, especially for young entrepreneurs who want to level up their construction business. Freelancers or those who are associated with small-scale construction businesses may have more difficulty sending the estimates to their new clients. 

But how can one avoid such estimating mistakes? One of the easiest ways is to start using the estimating software where one can get online assistance. Here, we will discuss more common mistakes occurring while creating estimates and their solutions. 

These 8 simple mistakes must be avoided when it comes to preparing estimates for clients.

1. No On-Field Visit

As a business owner, not visiting a job site means that the service provider will not have an idea about the possible damages. Also, there are chances that they may have a wrong calculation of cost and materials. 

Such an on-site meeting is necessary to judge the condition and to measure the working area. On the basis of the measurement, a contractor can then submit their bid via estimating actual cost.

If they refrain from visiting the site, unknown issues may come during the ongoing construction work. These issues need more time and cost which might not have been included in the estimate. Hence, it is suggested to visit the job site.

Solution:  Construction contraction must inspect the working area before beginning the work. If possible, contractors can also take sub-contractors for detailed analysis of the site and structure.

2. Simple Mathematical Errors

Minor errors or wrong calculations in estimates can often take place when contractors want to wrap up the task in hurry. These silly mistakes can have a negative impact on the construction business. And clients might refrain from recommending such services to their friends and family members. 

In terms of calculations, contractors usually make mathematical errors while adding line items, local taxes, and offering discounts. These calculation errors are human errors that are quite possible when contractors generate estimates manually.

Solution: Creating an error-free estimate could only be possible when it is not done by humans. The best remedy for such errors is to generate estimates by using online invoicing and estimate software.

3. Sending Incomplete Estimates

Those who are into the construction business will agree on how incomplete estimates can put a dent in their business reputation. The partial estimate sent to the client could be the result of not itemizing the products and services. Therefore, it is recommended to include every detail of the material cost, overhead expenses, and other necessary instructions.

By doing so, clients will have more clarity on the estimated cost for their construction work. 

Hence, the business owner can expect a quick approval. Whereas, incomplete one will make the customers choose other services.

Some contractors may only itemize the line items, which may not help the clients have a clear picture of service charges. So, before sending the estimates it is crucial to recheck the estimates whether it is completely filled or not.

 Solution: It is safe to use an online estimate generator so that it shows a preview of estimates before a contractor hits the send button.

4. Forgetting to Assess Risks

Little the construction contractors may know that if they don’t pay a visit to the client’s house, they are not aware of the risks. Since the construction work has the potential to damage valuable assets, contractors must complete the risk assessment before they start making estimates. 

It is the necessary step to ensure customers about the possible threats. However, if they skip assessing risk factors, then it will be difficult to manage in the later stages. And as a result, an estimate will have no important notes of possible risks.

Solution: Construction contractors should closely inspect the job site and inform the customers before creating estimates. If there are risks involved in the job, they should be mentioned in the estimate.

5. Making Random Guesses

Local contractors who are connected with the construction industry often prepare estimates by making random guesses. It won’t help them when it comes to clearing the payment. In this case, the asking price may vary at the time of the payment and this may lead to disagreement between the client and contractor. 

Professional contractors usually don’t make guesses when they are unsure about the actual price. Instead, they ask the experienced person to get the correct price. Thus, contractors should refrain from making the guesses, or else it would negatively influence the business profit.

Solution: Contractors should stay updated with the current prices in the construction industry. Before visiting the site, have a brief idea about the construction job and discuss it with the subcontractors too.

6. Insisting for Contract Agreement

Contractors might have no idea why they should not insist the client accept the contract agreement. Though it is not considered an error, contractors must take care while offering contracts to their clients. Some of the clients will not accept the annual contracts if asked frequently. And it would have adverse effects on their business. 

Therefore, contractors should discuss with the clients prior to the work. In case, if the client agrees to the contract, offer them an annual contract with discounted rates. In this process, they should be confident while analyzing the working areas. With the proper analysis and judgment, making an estimate would be easy and the client may accept contracts as well.

Solution: Let the client trust your services and thereafter advise them to choose the annual contract. 

7. Not Highlighting the Payment Terms

Many construction contractors often describe incomplete payment terms which might create differences with the clients. To avoid such last-moment issues, they should clarify the payment policy so that their client will not have any payment-related problems. 

Mainly, contractors should include the various payment modes, accepted currency, and refund process. When they forget to highlight the payment policy, new customers won’t be ready to trust their services. Thus, one must clearly mention the payment instructions and necessary guidelines in the estimates.

Solution: Contractors should make payment policies in one go so that they do not need to change frequently. Else, re-writing the policy every time means there would be errors.

8. Applying Hidden Charges

When the person is connected with professionalism like construction, there is no such place for undisclosed matters. Therefore, contractors should not surprise their clients by asking the prices which were not discussed previously.

If contractors want to add more charges for extra activities or material costs, they must inform their clients. Otherwise, slight hesitation to reach the customers will create communication gaps and customers would not be ready to pay the added costs.

Solution: Create an estimate that is easy to understand by the clients and refrain from applying any hidden costs. If there are extra charges that need to be added, then discuss additional costs with clients.

8 Common Mistakes To Avoid While Making Construction Estimates was last updated February 8th, 2022 by Mehedi Sazal