A hundred carpenters can each hang a door successfully. However, can each carpenter manage your money? Contracting today requires not only good craftsmanship skills but also excellent management.

Know Your Numbers

Estimating or Budgeting

There is a clear difference between estimating and budgeting. Estimating is reliant on the vision and experience of your contractor. Estimates often lack critical information such as a defined design plan with a scope of work and most scenarios have been answered.

• Estimating, your vision, their way. (60% Accuracy) (40% Contingency) (Change Orders)
  Estimating often relies on your contractor or someone else determining spatial layouts, designs, products, and final details that you may not like or want in the end. Without plans or defined scopes of work, you’re asking them to do a project based on their terms, their experiences, and their vision. This type of approach also leads to expensive or unforeseen change orders.

• Budgeting, your vision, collaboratively. (90% Accuracy) (10% Contingency)
  Budgeting allows you to work with your team toward common goals. Budgeting a remodel eliminates the frustrations often found in estimating or ballparking the true costs of a project. Budgeting via planning helps answer questions and allows for educated decisions and accuracy when forecasting costs. Budgeting typically requires a higher level of pre-construction planning, and the upfront time ensures the project runs smoother, as planned, and within budget.

We often receive inquiries about estimating projects based on a phone call or brief conversation to determine the feasibility of a potential build. Although this is standard practice within the industry is widely practiced, it’s not the best approach. The important thing to remember about estimating is typically while searching for pricing a client may have multiple conversations with various contractors. The contractor will then estimate the project based on the conversations and their experience. You as the consumer are reliant on the project being turned out with the contractor’s vision, process, and procedures that often are not what you envisioned for the project. You may also face discrepancies, communication issues, and disappointments.

Estimating vs. Budgeting, know the difference

Estimating involves a process of gathering information to determine the cost of a particular item or task based on a set of predetermined rules, scales, and parameters. It is often referred to as bidding. An estimate is an approximation of the total cost of a project which is based on the available information at a given time, while a bid is a formal offer that specifies the exact cost of performing the project. A bid usually contains a detailed breakdown of expenses, project terms, and conditions. However, an estimate is non-binding and only serves as an approximate cost calculation. A bid is much like a budget and both help to ensure that a project is completed within a specific cost range. Our company utilizes a budgeting system that is closely tied to a specific scope of work.