How Does Writing an Estimate Work?

Timeline

Create a timeline that will show how long it will take you to complete the designated job. Use this timeline to organize all the steps needed to complete the job so you will be able to write out a detailed estimate. The timeline should include anyone you have to subcontract to get the job done. For example, if you are adding a bathroom on to a house you will need to subcontract a plumber. You will need to take into consideration how long it will take for the plumber to complete his part of the job. Figuring out how long a job will take is very important. If you have a crew, you are going to need to make enough money to pay them each week until the job is done. Making sure the timeline is as accurate as possible will help ensure you don't use any money out of your own pocket for their paychecks. Once you have your outline you can move on to the expenses.

Expenses

Calculate your expenses. Find out the cost of the materials needed to do the job. Add the cost of any dumpsters that might be needed. Add the expenses of the subcontractors. Using your timeline calculate how many hours you are going to need to pay your crew for and add in their paychecks. Add in the cost of any insurance that you must carry to work these jobs. Decide whether it is necessary to rent a port a potty and add that figure, if necessary, to your expenses list. The last expense you should add is how much profit you want to get for the job. In other words, make sure you provide for your salary when all is said and done and everyone else is paid off. Add up all of the items in your expenses list and you will get the figure for your total expenses.

Estimate Write up

Get out a company letter head and write up a detailed list of expenses on your computer. The list should have categories such as materials, subcontractors, rental equipment and labor. Your salary and your employees' salary go under the labor category. Rental equipment should include any dumpsters or port a potties. Materials should include everything down to each nut and bolt that you will need to complete the job. You can get these figures from your expenses list. The estimate just provides broad categories for the customer and not a detailed list like you created above. You will need to put the expenses on the estimate under the correct category. Print out two estimates. Give one estimate to the customer. The other one should go in your records. Finally, the estimate should state how much money is needed up front and how much money is required when the job is all finished. If the customer agrees with the estimate you can begin working.