Cost estimating is one of the most important aspects of running a plumbing business. Estimating the cost of a job accurately can mean the difference between making a profit and taking a loss. There are a number of different techniques that plumbers can use to estimate the cost of a job, and the best technique to use will depend on the specific job being estimated. Here are a few you could consider using on your next estimate.
1. The Bottom-Up Method
Also known as analytical estimating, the process involves breaking the job down into its component parts and estimating the cost of each individual component. This is a very accurate method of estimation and is often used for larger jobs where there is a lot of detail involved. It’s also a good choice if you have a lot of experience with the specific type of job you’re estimating.
2. The Parametric Method
The parametric method is similar to the bottom-up method in that it also involves breaking the job down into its component parts. However, rather than estimating the cost of each individual component, you estimate the cost based on a set of parameters. For example, you might estimate the cost of a plumbing job based on the number of fixtures being installed, the length of the run, or the type of materials being used. This method is less accurate than the bottom-up method, but it’s often faster and easier to do.
3. The Analogous Technique
The analogous technique is a good choice when you don’t have a lot of experience with the specific type of job you’re estimating. With this method, you find a similar job that you’ve completed in the past and use that job’s cost as a starting point for your estimate. You then adjust your estimate up or down based on the differences between the two jobs. For example, if the job you’re estimating is twice as big as the job you’re using as a starting point, you would adjust your estimate upward by 100%.
4. The Three-Point Estimation Technique
The three-point estimation technique is great when you need to come up with a quick estimate, and you’re not sure how accurate it needs to be. With this method, you come up with a best-case, worst-case, and most likely-case estimate. You then take the average of these three estimates to come up with your final estimate.
5. Empirical Costing
Empirical costing is a good choice when you have a lot of data about past jobs. With this method, you compile data about past jobs, such as the cost, time to complete, and materials used. You then use this data to come up with an estimate for the job you’re currently working on.
ePlumbing Estimators uses a variety of different techniques to come up with accurate estimates for plumbing jobs. Contact us today to learn more about our estimating services.