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Developing the Estimator, Part 3

In the past two months we have talked about what the first-time estimator should have learned in the first year and a half on the job. This month we cover what the estimator should know by the time his third year comes around.

By the end of the second year, the estimator should be able to understand any labor contracts, i.e. union agreements, that the company is signatory to.

At this stage the estimator should be able to read and understand contract language and terms, and how to modify them in the best interest of the company.

Know your competition and your clients. The estimator should be made aware of each of the competitors, what their strengths and weaknesses are, what the history of the company is and who the key personnel are, and what their strengths and weaknesses are.

The estimator should know all of the potential clients, what any history is for each, specifically with their company, and also the client’s type and approach to business.

Post-job analysis. At this stage the estimator should be able to perform the post-job analysis, comparing the estimated production to the actual production, the estimated materials to the actual materials, etc. From this information, the estimator would compile historical data for use in future estimates.

By the end of the first six months of the third year, the estimator should be able to perform all of the above. The estimator also should be able to understand workflow and the importance of establishing a consistent workflow for the company. He should be able to also understand the costs associated with too much or too little work.

At this stage estimator should be able to handle negotiations for the project.

This three-year time frame marks the end of the estimator’s apprenticeship.

Now, after three years of training, your investment of time and money into an individual is about to start providing a return on that investment. I’m talking about a serious return on investment here. As a business owner, what you should expect, at a very minimum, is a return of at least 600 percent of the estimator’s annual compensation. A very solid estimator can generate a gross profit that is more than 10 times his annual compensation.

What can you do to make sure your estimator is on the right track?

First make sure you are investing your time and money into the right person. If the person you have chosen is not capable of reaching the incremental milestones that are outlined in these articles, you probably want to reconsider your selection.

Provide the environment and the tools that are necessary for the estimator to be productive:

• Supplement his education with estimating classes that are specific to your company’s construction trade(s).

• Furnish an office area that is well-lighted, roomy and quiet. An estimator needs enough room to spread out and not feel hindered by a cramped work environment. Concentration is of great importance, so place the estimator’s office in an area that is away from office chatter and distraction.

• Provide the estimator with the newest computer hardware, estimating software and the proper training that will enable him to become proficient with his operation.

• Allow the estimator to see the results of his completed projects. Feedback related to the job cost will facilitate his ability to fine-tune his estimating skills on future projects.

About the Author

Charles Mahaffey is president of Accuest, LLC, and The Academy of Construction Estimating in Atlanta.

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