Tag Archives: risk

Estimating Book Recommendations

I’m often asked for recommendations regarding books on estimating techniques, not the data mind you, but the techniques and methods of estimating.

Unfortunately there aren’t a whole lot of books out there to choose from but still there are some good ones that are well worth the time.

Defensive EstimatingOn the top of the list I like Defensive Estimating: Protecting Your Profits by William Asdal, CGR. It’s not about how to estimate a kitchen, a deck or some other project in the literal sense in terms of what items to include and look for but is instead a book about the “big picture” of estimating and is about approaching estimating with a particular type of viewpoint and that is one of “protecting your company’s profit” which is very different than an estimating mind set that many contractors dangerously adopt which is “estimating to get the job”.

The lesson of Chapter 2 Establish the Company Profit Number Based on Your Income Needs which again so many contractors fail to do is alone worth the price of the whole book.

Chapter 6 Using Retail Pricing at Every Line brings up a point I’ve often talked about when considering ‘risk’ in building and remodeling projects which is to ‘Put the Risk into the Line Item and Not the Bottom Line‘ , in other words ‘Nullify the Risk at First Entry‘ so that it can be specifically dealt with based on the risk of the task the line item describes.

And he concludes the book with chapters that give some great example of contract and specification language that can be used by builders and remodeler’s to defend their profits.

I highly recommend this book. I thought it was interesting though in reading the editors description of the book they say “Asdal takes the magic and science of estimating and turns it into an art.” whereas I would say “Asdal takes the mystic and mystery of estimating and turns it into practical science”. I think a problem many contractors have is they view estimating as some kind of mystical purely intuitive art and therefore never really develop the repeatable scientific methodologies (systems) for approaching it and it becomes a mess.

EstimatingBuildingCostsDelPicoAs for the nails, screws, nuts and bolts of producing an estimate and to what to actually look for in estimating particular projects and trades I think Estimating Building Costs by Wayne J. DelPico and Estimating for the General Contractor Estimating for ContractorsCookby Paul J. Cook are pretty good for that. You will get things from them such as how to calculate liner measure, are and volume
and then what to look for as you produce cost estimates in the individual trade areas.Where they are lacking is in connecting the COST of production to the PRICE you need to charge to run a business.

Estimating Building Costs Estimating for the General Contractor

Two other books I think that are very helpful and good resources to have in the ‘nuts and bolts of producing an estimate’ category come from R.S means and are entitled: Kitchen & Bath Project Costs: Planning & Estimating Successful Projects and Home Addition & Renovation Project Costs: Planning & Estimating Successful Projects . And like the two books I just mentioned these two book don’t do a good job of connecting the COST of production to the PRICE you need to charge for your services and are in fact terrible in that regard. Under no conditions should you use these books to actually price a project out. Instead use the line items lists and the project commentary on what to look for as basic templates of what you will need to estimate. Then substitute your own labor, material, and subcontracting costs and markup structure for what they give you.

Given this list people often ask ‘Well, what about Jay Christofferson’s Estimating With Microsoft Excel and while I have read it and keep a copy of it for reference it’s more about using Microsoft Excel to build a software tool than how to actually “estimate” anything so that’s why I don’t include it on this list of ‘Estimating Book Recommendations’.

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